Donald Trump bows down in front of India's medicine, and takes this important decision

The US has exempted the Indian pharmaceutical industry from immediate tariff hikes, recognising the importance of generic drugs for affordable healthcare. Despite a 50 per cent tariff on other imports, experts say the US is heavily dependent on India for medicines, which could have a potential impact on healthcare costs.

The extra 25 percent tariff imposed by the US on India for buying Russian oil has been implemented. But on one front, Donald Trump has surrendered to India. He has not implemented this tariff on the import of medicines. There is a reason for this. Indian medicines are very helpful in providing cheap health services in America. Especially, the impact of India's generic medicines is very high in America. Due to which, it has been decided to keep pharma out of the tariff.

Sudarshan Jain, general secretary of the Indian Pharmaceutical Alliance, said in an ANI report that the Indian pharmaceutical industry has been "excluded" from the US' immediate tariff enforcement as generic drugs are "critical" to maintaining affordable healthcare in the US. The sector is currently under review under investigation under Section 232. Generic drugs are critical to affordable healthcare in the US and are generally available at very low profit 's share of drugs imported to the US is about 6 per cent. Due to which the US Medicare system has significant dependence on India. After the 50 per cent tariff was implemented on August 27, 2025, Indian drug exporters started transferring their shipments to Australia, which was expected to threaten the stability of the US Medicare system. Pandey said that this is the reason why US President Donald Trump kept Indian drugs out of the 50 per cent tariff, even though India exported about 40 per cent of its total drug exports in FY 2025.

From which countries does America import medicines

Country	Imports in 2021 ( in million dollars )	Imports in 2024 ( $ in million )	stake in 2021	stake in 2024	Growth
America	6472	9784	33.4 percent	39.8 percent	14.8 percent
Switzerland	21,066	18,858	14.2 percent	8.9 percent	-3.6 percent
Germany	22,021	17,164	14.8 percent	8.1 percent	-8 percent
Singapore	5,738	15,253	3.9 percent	7.2 percent	38.5 percent
India	8,908	12,471	6 percent	5.9 percent	11.9 percent
Belgium	7,208	12,298	4.8 percent	5.8 percent	19.5 percent
Italy	5,702	11,532	3.8 percent	5.4 percent	26.5 percent
China	3,344	7,825	2.2 percent	3.7 percent	32.8 percent
Japan	5,972	7,476	4 percent	3.5 percent	7.8 percent
UK	6,070	7,269	4.1 percent	3.4 percent	6.2 percent
US Total Pharma Imports	1,48,731	2,11,798	100 percent	100 percent	12.5 percent

Experts say the US is highly dependent on India for its drug supply, and about half of its generic medicines come from India. Given the important role of healthcare and the already high healthcare costs in the US, they estimate that any major duties on medicines are unlikely to be imposed immediately.

If the tariffs had not been withdrawn

According to Kotak Institutional Equities, if the situation comes to a point and drug duties are not rolled back, companies may have to significantly reduce their US portfolios (in some cases, exit completely) and consider other options such as passing on the increased cost to patients. Many molecules in the US generic portfolio of Indian companies are already offering very low ''>To which countries does India export the most pharma

Country	Exports in FY 2022( in million dollars )	Exports in FY 2025( in $ million )	Share in FY22	Share in FY 2025	Growth
America	6472	9784	33.4 percent	39.8 percent	14.8 percent
UK	615	781	3.2 percent	3.2 percent	8.3 percent
south africa	550	637	2.8 percent	2.6 percent	5 percent
France	413	586	2.1 percent	2.4 percent	12.3 percent
Canada	355	540	1.8 percent	2.2 percent	15 percent
Brazil	375	520	1.9 percent	2.1 percent	11.6 percent
Nigeria	509	468	2.6 percent	1.9 percent	-2.8 percent
Australia	358	433	1.8 percent	1.8 percent	6.6 percent
Netherlands	327	423	1.7 percent	1.7 percent	9 percent
Russia	480	421	2.5 percent	1.7 percent	-4.2 percent
India Total Pharma Exports	19,396	24,577	100 percent	100 percent	8.1 percent

Which companies will be affected?

According to Jefferies, generic drug makers and contract manufacturing organisations (CMOs) could face serious challenges from the new tariffs due to intense pricing competition and their high dependence on US sales.

Zydus Lifesciences is particularly vulnerable to the potential effects of tariffs as a large portion of its revenues come from oral solid dose (OSD) formulations in the US, where 45 per cent of the company's sales come from the US.

Dr Reddy's Laboratories derives more than 25 per cent of its revenue from injectable drugs in the US, which could be subject to pricing pressure. Its sales in the US account for about 43 per cent.

Gland Pharma's sales from the US are 54 per cent. As a CMO, a portion of Gland Pharma's revenue comes from manufacturing for US-based customers. The increase in tariffs could directly impact its commercial operations.

Biocon gets 50 per cent of its sales from the US. Although direct exports of generic drugs from India to the US are less than 30 per cent, any increase in cost could negatively impact its competitive stance.

PC:TV9Bharatvarsh