Trump’s proposed generic drug tariffs trigger caution, industry sees limited near-term impact 

US President Donald Trump has proposed a phased tariff framework for imported generic pharmaceuticals, under which generic drugs would continue to enter the US duty-free until August 1, 2028, before attracting a proposed 100 per cent tariff from August 2028 and 200 per cent from August 2029. The proposal, aimed at encouraging pharmaceutical companies to establish manufacturing facilities in the US, has triggered mixed reactions across India’s pharmaceutical industry. While stakeholders believe the announcement is unlikely to have any immediate operational impact, many see it as a signal for the industry to accelerate market diversification, strengthen domestic capabilities, and closely watch the progress of India-US trade negotiations.

Namit Joshi, Chairman, Pharmexcil

“Today’s announcement provides welcome clarity and aligns well with the strategy we’ve already been pursuing. The zero-tariff window through 2028 gives the industry a meaningful runway, and we see this as time we can use productively — to keep strengthening our position across multiple markets rather than relying on any single one.

We’ve been diversifying for a while now — in the Apr–May FY27 period compared to Apr–May FY26, Europe is up 21%* and now accounts for over 20% of our total pharma exports, while Latin America (LAC) remains consistent, growing 23.96% over the same two-month period and now representing nearly 8% of our exports — and that strategy continues regardless of today’s news. Generics remain a segment where India brings deep expertise and scale, supplying a large share of the world’s affordable medicines, and we expect that strength to continue.*

On the India-US trade talks: we see today’s announcement as an opportunity to build even more clarity into the FTA conversations ahead. Pharma has always been an important chapter in those discussions, and a defined tariff timeline gives both sides a clear framework to work within as they shape a strong, durable agreement — including any specific provisions for generics.”

Nikkhil Masurkar, CEO, Entod Pharmaceuticals

“While the finer details of the proposed US tariff framework on generic drugs are still unclear, I think it sends a very important message to the Indian pharmaceutical industry. We have become too dependent on one market. The United States has been an outstanding partner for Indian pharma and will continue to be an important market for us, but recent geopolitical developments show that no market can ever be taken for granted.

This should be a wake-up call for the industry. We need to start thinking beyond the US and build a more balanced global strategy. In my view, Indian pharma has become a little too US-centric over the last two decades. It’s time for us to become more India-centric in the way we think about global growth.

The biggest opportunities over the next decade will not come only from the developed world. They will come from the Global South — Asia, Africa, Latin America and the Middle East, where billions of people still need access to high-quality, affordable healthcare. India is uniquely placed to lead these markets, not just because of our manufacturing capabilities, but because we understand the healthcare challenges of developing nations better than anyone else.

Instead of constantly reacting to policy changes in one country, we should be investing more aggressively in innovation, intellectual property, domestic manufacturing and stronger partnerships across emerging markets. Diversification is no longer just about reducing business risk; it is about building India’s long-term leadership in global healthcare.

The US will remain an important market, but it should no longer define the future of Indian pharma. Our ambition should be far greater, and that is to make India the healthcare leader of the Global South and the partner of choice for emerging economies. That is where the next chapter of Indian pharma will be written. If this geopolitical uncertainty encourages our industry to diversify faster, build deeper relationships across emerging markets and lead with innovation rather than dependence, it may ultimately prove to be a turning point for Indian pharma.”

Bharat Celly, Equity Research Analyst, Equirus Securities

“The proposed extension of US tariffs to generic pharmaceuticals represents a significant policy development. While imports remain duty-free for two years from 1 August 2026, tariffs are proposed to rise to 100% from August 2028 and 200% from August 2029, with the stated objective of encouraging companies to establish manufacturing facilities in the US.

However, relocating manufacturing is not a two-year exercise. Transferring an approved product to a US facility requires site transfer filings, process validation, stability data, and FDA approval for each ANDA. For Indian generic manufacturers with large approved portfolios, the cost and timeline of re-registering products significantly exceed the proposed transition period, while the economics of many products do not support such a move.

The proposal also runs counter to the intent of the Hatch-Waxman framework, which was designed to reduce drug prices through greater generic competition. Imposing 100–200% tariffs on imported generics could instead raise the cost of low-priced medicines and, in shortage-prone categories, increase the risk of supply disruptions rather than drive reshoring.

At this stage, we view the proposal primarily as a negotiating tool, given that implementation is deferred until August 2028, beyond the next US election cycle. Accordingly, we do not expect any near-term earnings impact, although the announcement could weigh on investor sentiment and valuation multiples.”

Param Desai, Research Analyst, PL Capital

“The announcement was largely unexpected, and there is still considerable ambiguity around how these tariffs will actually be implemented. Generic drugs entering the US will continue to attract a 0% tariff until August 1, 2028, after which tariffs are proposed to increase to 100% from August 2028 and 200% from August 2029.

Several generic pharma companies already have manufacturing facilities in the US, which could partially mitigate the impact. However, a two-year window appears too short to relocate the entire generic pharmaceutical value chain to the US.

Trump’s term ends in January 2029, while the major tariff impact begins from August 2028, so the eventual implementation remains uncertain if there is a change in administration. We could see a knee-jerk negative reaction in pharma stocks today, particularly among large-cap generic players, until there is greater clarity on the policy.”