The Trump administration is set to impose a 100% import tariff on branded and patented drugs starting October 1, unless the company is building a manufacturing plant in the US. The move poses a fresh challenge for Indian drugmakers, for whom the US is the largest market. India exported $3.7 billion worth of pharma products to the US in the first half of 2025.

Announcing the decision on Truth Social, President Trump said: “Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America.” He clarified that “building” means construction has already begun, in which case the tariff won’t apply.

The tariffs primarily target multinational giants like Pfizer and Novo Nordisk, which dominate the branded drugs space. It is still unclear whether complex generics and speciality drugs from India will also come under scrutiny.

Impact on Indian companies

For Indian companies, the impact will vary. Biocon Ltd. is unlikely to be hit, as its US subsidiary recently commissioned a state-of-the-art facility in New Jersey with an annual production capacity of two billion tablets. Sun Pharma, however, may face pressure until it rolls out its US investment plans, with speciality drugs like ILUMYA, CEQUA, WINLEVI and ODOMZO forming 19% of its revenue.

Other major players, including Cipla, Dr Reddy’s and Lupin, already have US plants, shielding them from the immediate tariff risk. While the current order focuses only on branded and patented drugs, the move adds to the backdrop of US-India trade tensions, where pharmaceuticals, once largely spared, have repeatedly come under tariff discussions, with earlier proposals going as high as 250%.