The White House has decided not to impose tariffs on generic drug imports, providing relief to Indian pharmaceutical companies that supply nearly half of all generics in the US. The move also reassures millions of Americans who rely on affordable imported medicines for conditions like hypertension, depression, ulcers, and high cholesterol.
India: A Key Player in the US Pharma Market
India dominates the US generic drug market, supplying 47% of all prescriptions, compared to domestic producers’ 30% share, according to IQVIA. Indian companies like Cipla, Sun Pharma, Dr. Reddy’s, and Aurobindo Pharma continue to expand their footprint, with shares trading positively following the announcement.
Internal Debate Behind the Tariff Decision
Earlier plans to impose tariffs stemmed from a push by MAGA hardliners to bring pharmaceutical manufacturing back to the US, citing national security concerns. However, the Domestic Policy Council highlighted that tariffs on generics would raise costs and risk shortages, while low production costs in India made US manufacturing unprofitable even under high tariffs.
The Trump Tariff Announcement
On October 1, 2025, former President Trump announced 100% tariffs on patented drugs unless companies build manufacturing plants in the US. While the policy focused on branded and patented drugs, questions remain about its impact on Indian generics, active pharmaceutical ingredients (APIs), and branded generics, creating a cautious environment for exporters.
India’s Pharma Export Growth
Indian pharmaceutical exports have been rising steadily, reaching a record $30 billion in FY25. The US accounts for $8.7 billion (31%) of these exports. Indian firms lead in therapeutic areas like hypertension, mental health, lipid regulators, and anti-ulcerants, saving the US healthcare system an estimated $219 billion in 2022 alone.
Conclusion
The White House’s shelving of generic drug tariffs is a win for Indian pharma companies and US consumers alike. It underscores India’s critical role in global drug supply chains and highlights the continued importance of affordable generics in maintaining healthcare access and stability in the United States.
