US Proposal to Impose Steep Tariffs on Generic Medicines Could Significantly Impact India: GTRI

The proposed steep tariffs announced by the US on generic medicines could significantly affect India's largest pharmaceutical export market, economic think tank GTRI said on Wednesday.

However, it said that the impact is unlikely to be uniform.

"Many Indian generic medicines sell for seven to ten times less than branded alternatives. Even after a 100% tariff, many products could remain cheaper than branded medicines, meaning much of the additional cost would likely be passed on to US healthcare providers, insurers and patients rather than immediately eliminating Indian exports," it said.

It added that the greatest pressure is expected to fall on higher-value generic formulations and branded generics, where manufacturing in the United States could become commercially viable.

"The proposed tariffs could significantly affect India's largest pharmaceutical export market," Global Trade Research Initiative (GTRI) founder Ajay Srivastava said, adding that India should also reduce its dependence on the US market by expanding exports to Europe, Latin America, Africa and Asia.

GENERIC MEDICINES: ------------------------ They are off-patent medicines that contain the same active ingredient, strength, dosage form, and therapeutic effect as the original branded medicine, but are sold under their generic name or another brand name, usually at a lower price.

TRUMP'S ANNOUNCEMENT: ---------------------------- In a post on Truth Social, US President Donald Trump said beginning August 1, America will continue to have a zero% tariff or import duty on all generic drugs brought into the country for two years, after which it will be raised to 100% for one year, and 200% thereafter.

"This is done to RESHORE Generic Pharmaceutical Production into America, with a penalty to those Companies that decide not to build Plant and Equipment within the stated period of time given to them," Trump said.

USA's PHARMA TARIFF STRATEGY: ------------------------------------- The latest announcement completes Trump's effort to cover almost every segment of pharmaceutical imports.

On Apr 2, 2026, the administration formally announced tariffs of up to 100% on specified branded medicines and key pharmaceutical ingredients under the Section 232 national security framework, while excluding generic medicines.

The July 21 announcement now brings generic drugs into the proposed tariff regime, leaving virtually no major pharmaceutical category outside Trump's reshoring strategy.

US GENERIC MARKET: ------------------------ The US imported $213 billion worth of pharma products in 2025, including $94.1 billion of finished medicines sold in retail packs, the category that includes generic medicines.

According to the GTRI, estimating the value of generic medicine imports is not straightforward because US customs data do not identify generics separately. Instead, they are classified under HS (Harmonised System) 3004, which also includes patented medicines, branded generics, and over-the-counter drugs.

As a result, estimates rely on industry data rather than customs statistics.

INDIA'S PHARMA EXPORTS: ------------------------------ India has the most at stake among generic drug exporters. It exported $25.8 billion in 2025, of which $9.7 billion, or 37.7%, went to the US, making America India's largest pharmaceutical export market.

Indian companies supply 47% of all generic prescriptions dispensed in the US, making India the country's largest source of affordable generic medicines. However, because generics are sold at low prices, India's share of the value of US generic imports is estimated at only 30%, well below its share of prescriptions, Srivastava said.

Several leading Indian drug makers already manufacture in the US. Sun Pharma, Zydus Lifesciences, Lupin, Aurobindo Pharma, Cipla and Dr Reddy's Laboratories operate FDA-approved manufacturing facilities there.

Indian generic medicines are widely prescribed for hypertension, diabetes, cancer, infectious diseases, and mental health.

OTHER MAJOR EXPORT MARKETS FOR INDIA: ------------------------------------------------- In 2025, India exports pharma worth $4.05 billion to the EU, $783.6 million to UK, $675.9 million to South Africa, $636.6 million to Nigeria, $596.7 million to Brazil, $544 million to Canada, $475.2 million to Australia, $467.3 million to Russia, $408.5 million to Philippines, and $405.2 million in Kenya.