“Because the 100% tariff is targeted at branded/patented drugs, most Indian generic exports would not be directly affected in the near term, though the threat will loom,” said Ajay Sahai, director general, Federation of Indian Export Organisations.
Trump, in a post on Truth Social, said starting October 1, the US will impose the tariff on “any branded or patented pharmaceutical product, unless a company is building their pharmaceutical manufacturing plant in America.” He clarified there will be no tariff if a company has started construction or broke ground for a plant.
ET BureauHe also announced a 50% tariff on kitchen cabinets and bathroom vanities, 30% on upholstered furniture, and 25% on heavy trucks starting October 1.
“We are looking at it,” a government official said on Trump’s fresh tariff on branded and patented pharma and other products.
Sudarshan Jain, secretary general at industry association Indian Pharmaceutical Alliance, said, “The social media post by POTUS refers to patented/branded products supplied to the US. It is not applicable to generic medicines.”
The announcement, however, hit pharma stocks. Stock prices of drug makers such as Sun Pharmaceuticals, Dr Reddy’s, Lupin, Cipla and Zydus Lifesciences tanked on the BSE.
ET BureauSuresh Subramanian, national life sciences leader at EY Parthenon, said the negative stock market reaction could be due to the sudden announcement.
Speculation Rife
Pharma was earlier excluded from the tariffs. Subramanian of EY Parthenon said all the information is based on Trump’s social media posts, which is leading to speculation.
Also, the scope of including complex generics to the levy category remains a risk. However, Subramanian noted, even if categories like complex generics or biosimilars are included in the future, companies like Sun Pharma, Piramal, Biocon and others have manufacturing facilities in the US and may be able to mitigate the impact.
The US is the top destination for Indian pharmaceuticals. India exported $9.8 billion worth of pharma products to the US out of a total $24.5 billion worldwide in FY25.
An industry expert said tariffs may be confined to expensive, patented drugs sold by multinational companies. Making investments in new facilities in the US may not be viable for generic drug makers, who operate “on wafer thin margins.”
Trump also announced tariffs on other products citing “flooding” from other markets. India exported $1.1 billion worth of furniture, $13.15 million motor vehicles for goods transport, and $4.83 million of wooden furniture used in the kitchen to the US in FY25.
Sahai of FIEO said, “On other goods, since they are not likely in exempt categories, the levy of duty may help India as we are at 50% while others were mostly below 20%.”
Trump’s announcement comes on the heels of commerce and industry minister Piyush Goyal’s visit to the US and the two sides negotiating a Bilateral Trade Agreement. The countries target to conclude the first tranche of the deal by this fall.
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