India: The World’s Pharmacy:-
India is called the pharmacy of the world because we actually make pharmaceuticals for most of the world. Our main market is the US. And this morning, Donald Trump decided to bring in a 100% tariff on any pharmaceutical that is imported into the US.About why ndia is going to get hit hard by this one.
What Are Generic Drugs and Why They Matter:-
At India’s pharma power and the size of our market. India supplies 20% of the world’s generic medicines to the whole world. , a quick side step on what a generic medicine is and this will be important through the course of this conversation. So, you have patented medication where a particular brand of pharmaceutical actually does the research. They come up with a patent which is very important in the in the west and they are the only ones able to make a certain drug. But after some lapse of time the patent expires and then it becomes open. Once it’s no longer patented anybody can make that drug and that is called a generic drug. It becomes sharply cheaper after the patent has expired. Now ndia makes 20% of the world’s generic medicines.
Trump’s Tariff Shock: What Happened:-
We make 60% of global vaccines and we host the highest number of US FDA approved pharmaceutical plants outside of America are in ndia and formulations and biologics which are basically finished drugs of very complex medication make up nearly 80% of ndia’s total pharmaceutical exports. So in the last financial year which ended in April 2025, ndia exported 1.8 8 lakh cr rupees worth of pharmaceutical products and the US is our single biggest market but this is not a one-way street which means that it’s not just something that benefits us we make ndia makes pharmaceuticals affordable for the American population now ndian medicines have saved the US health care system $219 billion in 2022 alone an astonishing $1.3 trillion between 2013 13 and 2022. So yes, a lot of US pharmaceuticals are made in India, but that means that it’s available to their population a lot cheaper than if it were made in the US.
Immediate Market Reaction:-
Something that Trump has just upended and turned on its head. What has he ? He that on his social media account, he , “Starting October 1st, we will impose a 100% tariff on any branded patented pharmaceutical product unless the company is building a plant in America.” Which means that if you if you’re a pharmaceutical company, you’re manufacturing in ndia or anywhere else in the world outside of the US and you start to build a manufacturing plant in the US, you already have a manufacturing plant in the US, then you will not have to pay this double tax which will effectively double the cost of the product ruining the entire business proposition that we can manufacture in India and ship to the US and it’ll still be cheaper. What is the immediate impact? take a look at the ndian stocks that fell. The obviously the stocks were hit across the board across the world from South Korea, Samsung Biologics fell and in ndia the Sensex was down about 733 points. It’s not a lot because must point out that think the ndian stock market is sort of used to it by now. We’re a little insulated from these regular announcements that are coming in from the US specific pharma stocks. Sunfarmmer Dr. went down 5% today and that was expected and not just ndia, Australia exports apparently $1.3 billion worth of farmer products to the US. They have criticized the move also. let’s take a look actually at this generic versus non-generic and who gets hit or not.
Which Indian Pharma Companies Are Most Affected?:-
Like you a generic pharmaceutical will have the same ingredients. So the same chemicals, same dosage, same strength, same quality effectiveness. The research will apply to it as well. it will just be sharply cheaper because there is no patent on it anymore. And these generic drugs which are often called the backbone of healthcare are mostly manufactured in India for the world. Now in that fine print let’s take a look at big ndian companies and which of them will be hit and which will be not. Bioon Kiran Majun Dashar Shaw is safe because they already have a plant in New Jersey. Sunfarmmer is likely to be hit a lot. 19% of his revenue comes specifically from US specialtity drugs that are made outside of America. Specifically what Donald Trump is ing about Dr. Reddis, Lupin, Sipla, Orurabindo all have mixed exposure. Some have US plants and some don’t. Investor confidence has taken a knockout. Now um a lot of people are saying okay fine. So the tariff is mainly about branded drugs. It’s not about generics, but that’s for now.
Generics Are Safe—For Now:-
And given the way things are going, we don’t really have the ability to predict what Donald Trump is going to do next if he’s wanting if he wants to make a point. So the whole of the ndian farmer you know sector is holding its breath. Now remember when the 50% tariff was announced on ndian exports, pharmaceuticals was actually exempt by the US. And why was it exempt by the US? because they did not want to make pharmaceuticals expensive for their own citizens overnight. Now, this is obviously something he’s changed his mind on.
Why This Hurts the U.S. Too:-
Now, apparently, this is part of Trump’s broader America First Trade Agenda, where he’s using a legal tool called section 232, which is the trade expansion act, which allows tariffs to be brought in if something threatens your national security. Now he will have to justify within his own country to his own congress and you know and his own structure and the courts whether or not this qualifies for that um you know for for a national security threat to bring in tariffs but this is what he’s done. His argument is that America relies too heavily on foreignade medicines and drug companies must bring production back home.
Legal Basis: Section 232 of U.S. Trade Law:-
But like we’ve pointed out in the past, what this will effectively mean will be a a rough period in the middle where the citizens of the US are going to have to suffer from the fact that the number of pharmaceuticals available on the shelf will come down drastically and the cost will go through the roof. America imported $233 billion worth of medication in 2024 alone it is a country that relies very heavily on prescription medication. It medicates a lot. Now, if the prices suddenly double, so if you pay the tariff, the price will just go up 100%. So it will double this, which means hey patients will be hit directly. t will raise their Medicare and their Medicaid costs. So, their insurance policies would be hit. t will turn healthcare into a political flash point ahead of their 2026 midterms that are coming up. So, this is an interesting statistic that found that apparently four out of every 10 prescriptions that’s written out in America is filled in from with a drug that is made by an Indian company. So India has a very important role here to play in keeping US healthcare affordable for its larger population and that is what is come under right now a cloud.
India Needs a Diversified Strategy:-
For now ndia’s generics seem safe. Experts warn that you know it’s branded drugs today it could be generics tomorrow. So really nothing is safe in the long term. The move is a signal that ndia needs to push a trade deal and diversify markets and strengthen their domestic production of high value medication and for the US tariffs it might bring some factories back but it could raise drug prices for ordinary Americans. also want to point out at the same time Donald Trump invited the heads of state um your Pakistani prime minister and you know their field marshall to the white house yesterday and they ed about their trade deal where they have kept tariffs at 19% for Pakistan have also agreed to develop oil production together. So Donald Trump really sort of squeezing ndia on on all sides, sending out not friendly messages at all to India in the sense of proving that he is friendlier with Pakistan. constantly putting us under the pump with these announcements surprising obviously our setup with these announcements as well and we understand that our commerce minister Mr. Pushkuel was on his way to the US to negotiate even further but we don’t know what is the status of those negotiations. In the meantime it is a couple of things are obviously clear.
Final Thoughts: India Must Stay Alert:-
India needs to reduce its dependency on the US because it is simply an unpredictable partner in trade um in in in any way and we understand also in Andhra Pradesh the the shrimp farming industry in Andhra Pradesh which brings in a lot of money to the state and to the country is in deep trouble because of the 50% tariff and now the pharmaceutical industry at 100% tariff but allowing for too many open spots for Donald Trump to wake up in the morning and hit us with. So it does seem of course that this is not towards ndia in any way. This is a developing story and we’re going to continue to track it because here’s the thing about Donald Trump that we have learned for sure that his announcements more than announcements are actually negotiations that are active where he’s announcing to push his negotiations. So we have to keep tracking everything he does say and that seems to be the real challenge.