Winning Bizness Desk
Mumbai.US President Donald Trump has announced a 100 percent tariff on branded or patented medicines starting October 1, 2025. The decision will apply to all companies that export branded drugs to the United States, except those setting up or already constructing manufacturing plants within the country. According to Trump, the move is aimed at encouraging domestic drug production under his ‘America First’ and ‘Make in America’ policies.
Previous tariffs on Indian exports
India has already been hit by a 50 percent tariff, enforced from August 27, on products like textiles, gems and jewellery, furniture, and seafood. Branded drugs, however, were initially kept outside this tax. With the latest decision, medicines will also come under higher import duties, which could affect Indian pharmaceutical exports.
Possible ban on generics
Market experts caution that Trump may also target generic medicines in the future. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the immediate impact on India will be limited since the country primarily exports generic drugs. However, any potential restrictions on generics could disrupt the industry significantly, given India’s dominant role in the global generic market.
India’s role in generic drug supply
India is the largest exporter of generic medicines to the United States. In 2024, India shipped around 8.73 billion dollars worth of medicines to the US, accounting for about 31 percent of its total pharmaceutical exports. Nearly four out of ten prescription medicines written by doctors in the US come from Indian companies. Reports also show that the US healthcare system saved 219 billion dollars in 2022 because of generics, with total savings between 2013 and 2022 reaching 1.3 trillion dollars.
Branded versus generic medicines
Branded or patented medicines are original drugs developed through years of research and heavy investment. They come with patent rights, usually for 20 years, preventing other firms from using the formula. This makes them very expensive, as companies recover their research and development costs. On the other hand, generic drugs are produced once patents expire. They are chemically identical to branded medicines but cheaper by 80 to 90 percent since manufacturers do not bear the cost of research.
Why branded drugs face tariffs
Trump’s decision is rooted in concerns over national security and supply chain resilience. He argued that relying on other countries for essential medicines could put Americans at risk, particularly in times of crisis like the pandemic. By imposing tariffs, the administration wants to push pharmaceutical companies to manufacture within the US and secure the entire drug supply chain.
Other tariffs announced
Trump also announced tariffs on a range of other imported goods. Kitchen cabinets, bathroom vanities, and related items will face a 50 percent duty from October 1, 2025. Upholstered furniture will attract a 30 percent tariff, while heavy trucks made outside the US will be subject to 25 percent. Trump said these steps are meant to protect domestic industries from unfair foreign competition and strengthen America’s manufacturing base.
Summary pointers:
1. Trump announced a 100 percent tariff on branded and patented drugs from October 1, 2025.
2. Companies setting up plants in the US will be exempt from the tariff.
3. India already faces 50 percent tariff on textiles, jewellery, furniture, and seafood.
4. Experts warn Trump may target generic drugs in future, raising concerns for India.
5. India supplies 31 percent of its total drug exports to the US, mostly generics.
6. Branded drugs are costly due to patents, while generics are up to 90 percent cheaper.
7. Trump also imposed tariffs on furniture, cabinets, and heavy trucks to protect US industry.
