US President Donald Trump has affected the economies of many countries through the tariff bomb. Its effect has been seen in India also. However, at the moment there is a relief news that the Trump administration has postponed the plan to impose tariffs on generic medicines. This decision has brought great relief to the Indian pharmaceutical industry, because most of the cheap medicines used in America are exported from India. If tariffs were imposed, Indian medicines would become expensive in the American market and their demand could decrease.

According to the report of medical data analytics company IQVIA, about 47% of generic medicines used in America come from India. India’s share is so large that it is often called the Pharmacy of the World. Indian medicines have an important contribution in the health sector of America. Life-saving medicines like diabetes, blood pressure, cholesterol and antibiotics are imported in large quantities from Indian companies. The price of these medicines is much lower than local production in America, which provides relief to the citizens there.

Why was this U-turn taken?

According to The Wall Street Journal report, the Trump administration had started an investigation into imposing tariffs on generic drugs. In this investigation, not only the finished medicines but also the raw materials (API) used in their manufacturing were included. However, after investigation, the Commerce Department recommended limiting this scope, because many experts believed that imposing tariffs on generic drugs would increase drug prices in the US and could also lead to market shortages. One group wanted to bring production back to America by imposing high tariffs on drugs from foreign countries, while the other group believed that such a step would be harmful to the American people.

Tariff war and global impact

Donald Trump’s tariff policy has made headlines globally in the last few months. First they imposed import duties on China, in response to which China stopped purchasing American agricultural products. This caused a big blow to American farmers and created a crisis situation in the agricultural market there. Similarly, if drug tariffs were imposed on India, it would have an impact on the American health system as well. Without India’s affordable and reliable medicines, the same treatment would have cost much more to American patients.

Role of Indian Pharma Industry

India’s pharmaceutical industry is the leader in the field of generic medicines worldwide. Indian companies send cheap and high quality medicines not only to America but also to countries in Europe, Africa and Asia. The US market is the largest export destination for India, where billions of dollars worth of medicines are sent every year, so postponing the Trump administration’s decision is a relief news for Indian companies.

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India has reacted to this after the US has announced a tariff of up to 100% on branded and patented medicines from October 1. Foreign Ministry spokesman Randhir Jaiswal said that it has been closely monitored. Jaiswal told in the press briefing that India is constantly monitoring the matter.

Jaiswal said that after receiving notices related to the new tariff on social media, India has seen reports on pharma and other related products. He informed that the concerned ministries and departments are closely monitoring the matter and are studying its possible impact.

India gives most generic medicines to America
India is the world’s largest supplier of generic drugs and exports more than one-third of drugs consumed in the US. These drugs are not under patent and are cheaper than branded editions. Trump’s 100% tariff focuses on branded drugs, but industry experts say that the absence of generic drugs in Trump’s order does not eliminate the risk for India.

Trump announced on social media
The US President wrote on social media platform Truth Social, ‘From 1 October 2025 we will impose 100 percent tariffs on any branded or patent pharmaceutical products, until the company is building its pharmaceutical manufacturing plant in the US.’

Trump put new tariffs on separate imports
In his recent tariff decision, Trump has imposed 50% tariffs on kitchen cabinet and bathroom vanities, 30% on chairs and couchs and 25% on heavy trucks. Although Trump did not give any legal reason for these tariffs, he said that these taxes are necessary for “national security and other reasons”, which challenged the limits of role as his commander-in-chief.