New Delhi–Proposed U.S. tariffs on imported generic drugs are likely to have only a limited impact on Indian pharmaceutical companies supplying medicines to the American market, according to analysts.
U.S. President Donald Trump has announced that imported generic medicines will remain exempt from tariffs for two years beginning Aug. 1, 2026, before facing duties of 100 percent and later 200 percent.
Analysts said several Indian pharmaceutical companies operate subsidiaries in the United States, and tariffs would likely be calculated using the price at which medicines enter the U.S. market rather than their final selling price.
The United States imports about 90 percent of its prescription generic medicines, meaning the proposed tariffs would affect suppliers from multiple countries rather than specifically targeting India, said Tushar Manudhane, Senior Vice President and Institutional Research Analyst for Healthcare at Motilal Oswal Financial Services Ltd.
“Also, the concept of outsourcing to countries like India is based on 40-60 per cent lower cost of manufacturing in India compared to that in US. Tariff implementation would still fall short and would not lower this advantage of low cost manufacturing from India,” Manudhane said.
Establishing a pharmaceutical manufacturing plant in the United States would take at least two years, he said. The facility would then need to undergo inspections and a product approval process lasting another 12 to 15 months before production could begin.
“Above factors questions the economic viability of setting up a manufacturing plant in US for generics. This effectively would mean minimal impact on the Indian pharma companies supplying medicines to US market,” Manudhane said.
India is frequently described as the “pharmacy of the world” because of its role in supplying affordable generic medicines internationally.
Indian-made generics account for nearly 40 percent of medicines sold by volume in the United States.
India exported $9.7 billion in pharmaceutical products to the United States during fiscal 2025, representing about 38 percent of its total global pharmaceutical exports of $25.8 billion, according to the Global Trade Research Initiative.
The two-year tariff exemption would give overseas generic drug manufacturers time to establish production facilities in the United States before the higher duties take effect.
Trump said the phased tariff plan is intended to encourage pharmaceutical companies to invest in U.S. manufacturing. (Source: IANS)
