The US is introducing a new tariff plan on generic medicine imports, beginning with zero percent until August 2028, followed by a 100% tariff for a year, and ultimately reaching 200%. This move is expected to have implications for India, a significant exporter of generic drugs to the US, potentially leading to increased manufacturing investments or higher drug prices for consumers.

The US is introducing a new tariff plan on generic medicine imports, beginning with zero percent until August 2028, followed by a 100% tariff for a year, and ultimately reaching 200%. This move is expected to have implications for India, a significant exporter of generic drugs to the US, potentially leading to increased manufacturing investments or higher drug prices for consumers.

The US is introducing a new tariff plan on generic medicine imports, beginning with zero percent until August 2028, followed by a 100% tariff for a year, and ultimately reaching 200%. This move is expected to have implications for India, a significant exporter of generic drugs to the US, potentially leading to increased manufacturing investments or higher drug prices for consumers.

In a significant move on Wednesday, United States President Donald Trump announced a new tariff plan for generic medicine imports in the US. As the country is heavily dependent on imports in the sector, it aims to increase domestic production of generic pharmaceuticals.

The tariff plan is phased out in three parts. Till August 2028, there will be no tariffs on generic drugs. Following this, tariffs will increase to 100 per cent for another year, and then later double to 200 per cent. For context, at least 90 per cent of medicines sold in the US are generics.

Through a post on Truth Social, Trump said: “Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for two years, after which the TARIFF will be raised to 100 per cent for one year, and 200 per cent thereafter.”

Trump also mentioned that pharma companies will face a penalty if they do not build plants and equipment within the stated period. The 100 per cent tariff imposed on patented pharma remains unchanged. This tariff had specifically excluded generics and biosimilars.

This can cause a setback for the Indian pharmaceutical industry, as around 40 per cent of the generic drugs in the US market are imported directly from India.

In 2025, India exported $9.7 billion worth of pharmaceuticals to the US, which accounted for 38 per cent of its total global pharma exports of $25.8 billion. India is the largest generic supplier to the US, with the names like Sun, Dr Reddy’s, Cipla, Lupin, Aurobindo, and Zydus running the show.

However, the two-year grace period makes sure that there will be no sudden economic changes. The time is also granted because pharma companies in the US cannot simply replicate Food and Drug Administration (FDA)- approved dose manufacturing at Indian cost structures. US-made generics will be materially more expensive, even without tariffs.

If the tariffs are actually being fixed at the rates of 100-200 per cent, they’re not absorbable costs for the company as generic drugs run on low operating margins. This can either cause these companies to invest in manufacturing units in the US or increase retail pricing for the drugs.

The tariff risks increasing costs for essential drugs, for both imported and domestically manufactured generics.

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