US pharma tariffs likely to have limited impact on Indian exports

India’s generic pharma industry, which accounts for the bulk of domestic pharma exports to the US, is expected to remain largely insulated from the fresh tariffs announced by US President Donald Trump.

A year after announcing the “Liberation Day” reciprocal tariffs that were later struck down by the US Supreme Court, President Trump on April 2 announced a levy of up to 100% tariffs on certain branded medicines and key pharmaceutical ingredients. Generic pharmaceuticals and their associated ingredients, including biosimilar products, have been excluded at this time from the tariffs.

The order following a Section 232 investigation by the US launched on May 1, 2025, is expected to be implemented over 120 days or from August and September this year.

“According to the Food and Drug Administration, as of 2025, approximately 53% of patented pharmaceutical products distributed domestically are produced outside the country.  The degree of import reliance is significant at the API level with only 15% of patented APIs by volume domestically produced for the United States market,” the order noted.  

However, India, for which the US is the top export market with pharma being among the largest exports, will not be severely impacted by the move for now. Experts point out that most of India’s pharma exports to the US are in the nature of generic drugs.

“Around 90% of India’s pharmaceutical exports to the US are generics, which remain exempt,” said Ajay Srivastava, founder, Global Trade Research Initiative. However, Indian firms producing branded or specialty drugs, or supplying inputs for patented medicines, could face tariff pressure, he cautioned, adding that the larger concern is future uncertainty if tariffs are extended to generics.

India’s pharma exports to the US have been growing steadily over the last few years—from $6.62 billion in 2021 to $8.87 billion in 2024. In 2025, it grew further and India exported $9.7 billion worth of pharmaceuticals to the US, accounting for 38% of its global pharma exports of $25.8 billion. In fact, pharma exports remained excluded from the reciprocal tariffs that were levied by the US last year.

However, the US has been far from satisfied with India’s trade policies on medical device and pharmaceutical price controls, which it also highlighted in its recent 2026 National Trade Estimate Report on foreign trade barriers.

It pointed out that US medical device and pharmaceutical companies continue to raise concerns that price controls by India have not been increased in line with inflation and do not differentiate on the basis of the cost of production or technological innovation, which dissuades U.S. companies from serving the market. “Additionally, US innovative pharmaceutical companies are largely unable to access the majority of India’s pharmaceutical market because the Indian Government’s largest public health program,” it said.