Persevering with his coverage of imposing tariffs on imports, US President Donald Trump on Thursday introduced 100% duties on branded medicine from 1 October. The transfer is unlikely to influence India, because the nation is a significant participant in generic medicines and vaccines. However, the choice has brought about jitters.
In accordance with a report by Brickwork Analysis, innovator or branded medicine make up solely about 3-4% of India’s formulation market. It’s the branded generic merchandise that take the lion’s share. This development has been constant over time.
“Given the duties introduced are on branded/patented medicine, there can be no influence on the generics exports accomplished by Indian pharma firms,” stated Tushar Manudhane, senior vice chairman and institutional analysis analyst (healthcare) at Motilal Oswal Monetary Companies.
Innovator medicine, or branded medicine, are developed by way of in depth analysis and are protected by patents. Branded generics confer with drugs that include the identical lively components as innovator medicine however are marketed underneath a distinct model title with out patent safety.
Whereas Trump’s latest decision doesn’t influence India a lot, the fast-changing tariff insurance policies of the US are sufficient to induce uncertainty and nervousness within the Indian sectors which have excessive publicity to the world’s largest economic system on the earth.
“Whereas the tariff primarily targets branded medicine, there’s ambiguity over whether or not advanced generics and speciality medicines may additionally be affected, which might pose challenges for firms counting on US exports,” stated Alternative Institutional Equities in a be aware.
The US’s share of India’s exports of medication, prescription drugs, and high-quality chemical substances has greater than doubled previously twenty years. At the moment, the US accounts for a 3rd of complete such exports, making India susceptible to modifications in insurance policies.
Shares drag
Whilst India has largely dodged tariffs, shares of key pharmaceutical firms have reacted negatively to the information, with costs declining as much as 4.3% right this moment. Firms like Aurobindo Pharma, Dr Reddy’s Laboratories, Zydus Lifesciences, Lupin, Sun Pharmaceutical Industries, and Cipla, amongst others, get 10-47% of their income from the US market.
Trump had exempted pharmaceutical merchandise from the Liberation Day tariffs on 2 April. Nonetheless, regardless of the exemption, Nifty Pharma has underperformed in comparison with the benchmark Nifty 50 since 2 April 2025, signalling the troubles over tariff-related uncertainty and India’s excessive publicity to the US market.
“Whereas the announcement stirred sharp falls in pharma shares, the precise influence for now’s targeted on branded, patent-protected medicines—most Indian exports are generics, which stay exempt,” stated Ajit Mishra, senior vice chairman, Analysis, Religare Broking.
“Nonetheless, the uncertainty round future coverage shifts retains nerves on edge. For India’s pharma giants, it is a wake-up name to strengthen provide chains and discover US-based manufacturing, even because the sector’s core power in inexpensive generics continues to help international healthcare,” he added.
In a report final month, India Rankings and Analysis had famous the dangers related to the fast-changing tariff insurance policies of the US, but in addition stated India’s significance within the US drug market might also defend it from the tariffs. The worth hole between generic and patented merchandise within the US is usually about 95%, making India’s generic merchandise cost-effective.
“The US closely depends on Indian generics because of their low-cost, high-volume nature, making it difficult to interchange them with higher-cost native manufacturing,” the report famous.
