Earlier this month, President Donald Trump announced plans to raise tariffs on Indian imports to 50 per cent, doubling the already controversial 25 per cent levy imposed just days prior. The move—triggered by India’s continued purchase of Russian oil and its resale on global markets—comes amid rising geopolitical friction and a breakdown in trade negotiations.
At first glance, these may seem like geopolitical tit-for-tats. But in reality, they risk upending a critical supply chain corridor between two of the world’s largest democracies—particularly in pharmaceuticals. This escalation, while framed as a geopolitical response, threatens to create serious downstream consequences for millions of American consumers, especially those who rely on affordable, high-quality medicines manufactured in India. For an administration that claims to prioritise domestic health and economic resilience, this tariff push is dangerously shortsighted.
Textiles, electronics, and auto parts will also see massive impact. The ripple effect will be felt not in war rooms, but in the manufacturing floors and boardrooms of small- and mid-sized American businesses that rely on Indian partners to stay competitive.
As someone who works directly with Indian suppliers and U.S. operators, I’ve seen how vital this bilateral trade channel has become. Tariffs may be intended to punish India, but the damage will boomerang directly back to American industry—and patients.
The American drug cabinet depends on India
India is often called the “pharmacy of the world,” and for good reason. It supplies nearly 40 per cent (1) of all generic drugs used in the United States. These include widely prescribed medications for hypertension, diabetes, cancer, infectious diseases, and mental health. The subcontinent is a key hub for producing active pharmaceutical ingredients (APIs) and intermediates that power both over-the-counter and life-saving drugs.
Many of these medications cannot be produced domestically at scale, either due to cost, infrastructure gaps, or regulatory timelines. Tariff increases on Indian pharmaceutical exports will lead to increased costs for U.S. patients, supply chain delays for generics, and margin pressure on healthcare providers and distributors.
The economic model that makes generics work—cost-efficient, large-scale production combined with stringent regulatory compliance—is precisely what Indian pharma has mastered. A sudden imposition of tariffs on these exports fundamentally upends that model.
The result? Patients pay more at the pharmacy counter, and public health programs—especially Medicaid and Medicare—face ballooning costs. In a country already struggling with healthcare affordability, this policy direction could worsen medication non-adherence, delay treatment for chronic illnesses, and widen health disparities.
This isn’t an abstract threat. It’s a prescription bottleneck in the making—affecting cancer care, antibiotics, and chronic disease management. In short: this policy could hit the American healthcare system where it hurts most.
Why tariffs won’t create a domestic pharma renaissance
Proponents of tariffs often argue that this will encourage more drug manufacturing within the U.S. But that’s not how pharmaceutical supply chains work.
Domestic production of generics and APIs has been offshored for decades due to high operating costs, regulatory complexity, and infrastructure limitations. Building out that capacity would require years of investment, not to mention government incentives, workforce development, and regulatory streamlining. In the meantime, patients can’t afford to wait.
Moreover, tariffs don’t encourage repatriation; they encourage price increases. American companies importing from India will simply pass the added cost downstream. The belief that tariffs will trigger onshore pharmaceutical manufacturing is not supported by the industry’s economic or operational realities.
India has consistently demonstrated its reliability as a pharmaceutical partner—working with the U.S. FDA, maintaining WHO Good Manufacturing Practice (GMP) standards, and scaling vaccine production during the COVID-19 pandemic. Targeting its pharmaceutical exports with punitive tariffs sends the wrong signal.
This isn’t just a commercial risk—it’s a strategic one. As the U.S. looks to reduce dependency on China for critical medical goods, it should be strengthening ties with Indian pharma, not weakening them. India remains one of the few large-scale, quality-assured ecosystems outside of China capable of filling this role.
What this means for U.S. healthcare and business
The unintended consequence of this tariff policy is that it punishes the very people it claims to protect. U.S. patients will face higher drug prices. U.S. businesses will face higher input costs. And strategic allies like India will be pushed to seek more reliable, cooperative trading partners elsewhere.
At Enventure, we work closely with family-owned and mid-sized businesses in both the U.S. and India. We see daily how these partnerships are built on decades of trust, operational excellence, and mutual growth. Disrupting that ecosystem with blunt-force tariffs will not create new capacity or restore domestic dominance. It will simply introduce chaos into one of the world’s most dependable trade corridors.
If the goal is to strengthen U.S. supply chains, then the solution must be grounded in collaboration, not confrontation. Instead of escalating trade penalties, the U.S. should focus on incentivising diversified sourcing, investing in domestic infrastructure, and forging long-term trade frameworks with partners like India.
The U.S.-India pharma relationship is not a geopolitical bargaining chip. It is a public health lifeline. And if these tariffs move forward, the cost will not be counted in spreadsheets—but in lives.
References:
- https://ashpublications.org/ashclinicalnews/news/4499/Quality-of-Generic-Drugs-Manufactured-Overseas