There would be little effect on Indian pharmaceutical firms that export drugs to the US market, since US President Donald Trump has revealed intentions to levy tariffs on generic drugs starting in 2028.

Many Indian businesses have US subsidiaries, and there is a significant disparity in the prices at which goods are transferred to and sold in the US market. It is likely that the tariff is priced to allow entry into the US market.

Tushar Manudhane, SVP, Institutional Research Analyst–Healthcare, Motilal Oswal Financial Services Ltd. , stated that 90% of generic prescription drugs are imported by the US, which raises the tariff for all vendors to the US market (whenever it occurs) and is not unique to India.

Manudhane said, “Also, the idea of outsourcing to nations like India is based on the 40–60 percent reduced cost of manufacturing in India compared to that in the US. Tariff enforcement would still be insufficient and would not reduce India’s advantage in cheap manufacturing. ”

Even if the production facility is built (which takes at least two years on its own), it would still need a product approval cycle and plant inspection that would last at least 12–15 months, further delaying any competition from entering the market.

The analyst pointed out that “the aforementioned factors raise questions about the financial viability of establishing a production facility in the US for generics. As a result, Indian pharmaceutical companies that provide drugs to the US market would have little to no influence. ”

India is referred to as the globe’s pharmacy because it provides generic medications to countries all around the world.

Almost 40% of the volume of Indian generic drugs sold in the US.

According to data from the Global Trade Research Initiative, India shipped pharmaceuticals valued at $9. 7 billion to the US in financial year 2024–2025, or 38% of its total global pharma exports of $25. 8 billion.

As part of his drive to relocate pharmaceutical manufacturing to the United States, Trump has declared that imported generic medications will be exempt from duties for two years starting on August 1, 2026, after which they will be subject to duties of 100 percent and subsequently 200 percent.

The statement gives foreign generic medication makers two years to build manufacturing facilities in the United States or face hefty levies on drugs sent to the American market.

The gradual tariff system, according to Trump, was designed to entice pharmaceutical producers to spend money on American manufacturing plants.