Indian drug makers heavily reliant on the US branded medicines market —such as Dr. Reddy’s Laboratories and Sun Pharma—are expected to be among the hardest hit following US President Donald Trump’s decision to impose tariffs of up to 100 per cent on branded and patented pharmaceutical imports, effective 1 October 2025.

 “Starting October 1st, 2025, we will be imposing a 100 percent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America,” Trump said on Truth Social.

“’IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction.’ There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started,” he added.

Manoj Mishra, Partner and Tax Controversy Management Leader at Grant Thornton Bharat, described the decision as a “significant shift in trade policy,” noting that pharmaceuticals were previously exempt from reciprocal tariffs and Section 232 duties.

“For Indian pharma, which supplies nearly USD 20 billion of generics to the US—about 40 percent of its consumption—the impact is twofold. Companies manufacturing branded products abroad for the US may face headwinds, while domestic generic producers could see near-term gains as higher prices for branded drugs push demand toward cost-effective alternatives,” Mishra explained.

Jeevan Kasara, Director and CEO of Steris Healthcare, said the proposed tariff will particularly affect companies dealing in branded drugs within the US market.

He emphasised, “Among the branded drug dealers in the US market, Dr. Reddy’s might be the most impacted since it holds a good amount of the specialty and branded revenue reliant on the US. Sun Pharma should also be taken into consideration - if the tariff line advances beyond the usual patented drugs, it would be affected due to its shifting branded/specialty pipeline and offshore production. With a heavily US generic market and local manufacturing, Cipla should be able to adjust the most.”

“The expectations across the market would be impacted with heavy investments in complex generics and biologics. It would be in the best interest of all three companies to start locally manufacturing complex biologics and reassess their US line to adjust local investment to prevent further escalations of uncertainty. The next few weeks would be pivotal to restoring investor confidence,” he added.

Parag Bhatia, Director, Laborate Pharmaceuticals, cautioned that higher tariffs on branded and patented drugs could deepen inequities in global healthcare.

“Essential medicines should not become collateral in trade disputes. At Laborate, we believe this is the moment for Indian pharma to demonstrate leadership not just in supplying alternatives, but in advocating for a global framework where affordability and patient access remain non-negotiable, irrespective of politics or tariffs,” he stated.

Hari Kiran Chereddi, MD & CEO, HRV Pharma & NHG Pharma, pointed out that while the 100 percent tariff may not directly affect India’s generic exports, it sends a clear signal that the US is keen to bring pharmaceutical manufacturing closer to home.

“For Indian pharma players venturing into complex generics, biosimilars, and patented products, this is a serious threat of margin compression as well as market access barriers. It emphasises the need to diversify markets, create resilience in supply chains, and also to adopt active diplomacy to secure India's pharma leadership,” he added.

Arushi Jain, Director of Akums Drugs and Pharmaceuticals, highlighted that the proposed tariffs mainly target branded and patented drugs, whereas India’s exports to the US are dominated by generics.  “India supplies over 45 percent of the generics used in the USA and 15 percent of the biosimilars used. Data shows that India exported USD 8.7 billion (INR 77,231 crore) worth of pharmaceutical products to the US in 2024. Moreover, in the first half of this year, India has already exported USD 3.7 billion (INR 32,505 crore) to the US. While there is uncertainty on future tariff plans w.r.t complex generics, currently they are not under the purview of the tariffs to be imposed as the bulk of them are generics.”

According to Dr. Sujit Paul, Group CEO Zota Healthcare Ltd., described the tariffs as presenting a “nuanced scenario” for the Indian pharmaceutical industry.

“Davaindia, being a retail-focused company specialising in affordable generics, could accelerate market access by enabling cost-effective alternatives for US pharmacies and distributors. At Davaindia, we are focused on leveraging our operational capabilities, supporting retail channels to deliver reliable, affordable, and safe healthcare solutions to consumers worldwide,” Dr. Paul said.

He added that India’s strength in large-scale, compliant manufacturing, coupled with a robust supply chain, ensures the consistent availability of high-quality medicines.

“While tariffs may disrupt global trade dynamics, they also highlight the growing importance of sustainable, scalable solutions,” Dr. Paul noted.

For Davaindia and other generic-focused companies, the announcement underscores the strategic role of generics in filling global healthcare gaps.

Dr. Paul said, “India has been called the 'pharmacy of the world' for years, mainly because of its robust generic drug industry. India's pharma exports to the US reached USD 10.5 billion in FY25, which is approximately 34–35 percent of its pharma exports. Since the suggested tariffs apply only to branded and patented medicines, most of India's generic export business remains unaffected. For DavaIndia, which has constructed its business on affordability and generics, the announcement underlines the strategic value of generics in filling healthcare gaps. While seemingly protectionist, the tariffs might also indirectly legitimise generics as sustainable options within global healthcare models.”

However, he noted that the long-term consequences would depend on how the US reconciles patient affordability with industry competitiveness.”

“India, as a credible partner for affordable health care, might become even more prominent in the global arena,” Dr. Paul added.

Bhavin Mehta, Whole-time Director, Kilitch Drugs and Vice Chairman, Pharmexcil, also said that the proposed tariffs are unlikely to have any immediate impact on India’s generic exports, which continue to play a vital role in making medicines affordable globally.

"While it signals a push towards strengthening US domestic manufacturing, Indian pharma remains well-positioned with its strong track record in generics, compliance, and quality. For India, this development underlines the importance of diversifying markets, investing in innovation, and building resilience in supply chains to continue supporting global healthcare needs," he added.