India supplies nearly half of U.S. generic drug imports, making it the most exposed country to Trump's phased tariff plan that starts with zero duties and escalates to 200% by 2029.
President Donald Trump said generic drugs imported into the U.S. will face zero tariffs for two years starting August 1, before a 100% levy kicks in during August 2028 and rises to 200% a year later.
Trump described the schedule as a penalty for drugmakers that do not build plants inside the United States within the grace period. The phased escalation is meant to push generic production onshore.
Tariffs on patented and branded drugs stay unchanged at 100% under the Section 232 order from April 2. That order exempted generics, biosimilars and related ingredients. Larger drugmakers had 120 days before the 100% rate applies; smaller ones, which rely on contract manufacturers, had 180 days.
More than a dozen major drugmakers, including Eli Lilly and Pfizer, struck deals with Trump to lower prices under the "most favored nation" policy. Those agreements exempt the companies from tariffs for three years.
India is the biggest supplier of generic medicines to the U.S., accounting for nearly half of all consumption. The U.S. takes roughly a third of India's pharma exports by value. Chinese firms control the upstream supply of active pharmaceutical ingredients like amoxicillin and heparin.
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