Donald Trump to slap 100% tariff on foreign pharma unless plants are built in US by Oct 1
A 100% import tax would make Indian drugs substantially less competitive, potentially leading to lost market share, falling sales, and shrinking margins. Previous tariff-related announcements earlier in 2025 triggered single-day stock declines of up to 6% for major Indian pharma firms.
- Sep 26, 2025,
- Updated Sep 26, 2025 6:20 AM IST
Donald Trump announced Tuesday that the U.S. will impose a 100% tariff on all branded or patented pharmaceutical imports starting October 1, 2025 — unless the exporting company is actively building a manufacturing plant in the U.S.
The announcement, made on Truth Social, specifies that “actively building” means a plant must have broken ground or be under construction. The measure is intended to push pharmaceutical manufacturers to localize production and reduce reliance on foreign drug imports.
Generic drugs were not explicitly mentioned, but complex generics and specialty medicines could still be affected, depending on how the rule is applied.
The policy poses a significant threat to Indian pharmaceutical firms, which rely heavily on the U.S. market. About 31% of India’s pharmaceutical exports go to the U.S., and leading companies like Sun Pharma, Dr. Reddy’s, Cipla, Lupin, and Aurobindo derive a large share of their revenues from branded or patented drugs sold there.
A 100% import tax would make Indian drugs substantially less competitive, potentially leading to lost market share, falling sales, and shrinking margins. Previous tariff-related announcements earlier in 2025 triggered single-day stock declines of up to 6% for major Indian pharma firms.
While companies focused on generics may see less immediate impact, investor sentiment has been broadly negative. Analysts note that the risk of eventual inclusion and the potential for regulatory spillover could keep the pressure on across the sector.
Firms that already have—or begin—U.S. construction may be able to sidestep the tariffs, but the high capital investment and long project timelines are major hurdles, especially for mid-sized Indian companies. This may accelerate efforts by Indian pharma to diversify away from the U.S. market and target regions with more stable trade policies.
Following earlier tariff threats, the Nifty Pharma Index and shares of companies like Sun Pharma, Dr. Reddy’s, Cipla, and Aurobindo reacted negatively. The trend could continue as the October deadline approaches and uncertainty mounts.
Donald Trump announced Tuesday that the U.S. will impose a 100% tariff on all branded or patented pharmaceutical imports starting October 1, 2025 — unless the exporting company is actively building a manufacturing plant in the U.S.
The announcement, made on Truth Social, specifies that “actively building” means a plant must have broken ground or be under construction. The measure is intended to push pharmaceutical manufacturers to localize production and reduce reliance on foreign drug imports.
Generic drugs were not explicitly mentioned, but complex generics and specialty medicines could still be affected, depending on how the rule is applied.
The policy poses a significant threat to Indian pharmaceutical firms, which rely heavily on the U.S. market. About 31% of India’s pharmaceutical exports go to the U.S., and leading companies like Sun Pharma, Dr. Reddy’s, Cipla, Lupin, and Aurobindo derive a large share of their revenues from branded or patented drugs sold there.
A 100% import tax would make Indian drugs substantially less competitive, potentially leading to lost market share, falling sales, and shrinking margins. Previous tariff-related announcements earlier in 2025 triggered single-day stock declines of up to 6% for major Indian pharma firms.
While companies focused on generics may see less immediate impact, investor sentiment has been broadly negative. Analysts note that the risk of eventual inclusion and the potential for regulatory spillover could keep the pressure on across the sector.
Firms that already have—or begin—U.S. construction may be able to sidestep the tariffs, but the high capital investment and long project timelines are major hurdles, especially for mid-sized Indian companies. This may accelerate efforts by Indian pharma to diversify away from the U.S. market and target regions with more stable trade policies.
Following earlier tariff threats, the Nifty Pharma Index and shares of companies like Sun Pharma, Dr. Reddy’s, Cipla, and Aurobindo reacted negatively. The trend could continue as the October deadline approaches and uncertainty mounts.