The announcement by Donald J Trump to impose a 100 Percent tariff on patented pharmaceuticals and their ingredients is expected to have a limited immediate impact on the Indian pharmaceutical industry, according to industry experts.

Currently, generic drugs, biosimilars, and related ingredients—constituting nearly 90 Percent of India’s pharmaceutical exports to the United States—remain exempt from these tariffs. However, the White House has indicated that this exemption will be reviewed after one year.

The tariff structure outlines that certain large companies will face implementation within 120 days, while smaller firms will have 180 days. Companies entering into Most Favoured Nation pricing agreements with the US Department of Health and Human Services, along with onshoring commitments to the Department of Commerce, will benefit from a 0 Percent tariff until January 20, 2029. Those opting only for onshoring agreements will face a 20 Percent tariff.

Additionally, pharmaceutical imports from regions such as the European Union, Japan, Korea, Switzerland, and Liechtenstein will attract a 15 Percent tariff. Products from the United Kingdom will face lower duties under a recently concluded bilateral agreement.

Certain categories, including orphan drugs, animal health medicines, and select specialty pharmaceuticals, will remain exempt if sourced from trade agreement countries or deemed critical for public health.

While the near-term impact on Indian companies is expected to be minimal, experts caution that long-term implications could emerge, particularly for raw material suppliers, contract manufacturers, and the broader global supply chain.

Some Indian firms with exposure to patented and specialty drug segments may see short-term effects. Sun Pharma, which derives a significant share of revenue from patented products, is among those potentially impacted. Following the announcement, its stock witnessed volatility, reflecting market concerns.

The tariff decision follows an investigation under Section 232 of the Trade Expansion Act of 1962, which concluded that imports of patented pharmaceuticals and related products could pose a risk to US national security.

According to the White House, the move has already triggered approximately USD 400 billion in new investment commitments from domestic and global pharmaceutical companies, aimed at strengthening manufacturing within the United States.