Generics dominance shields India from US drug tariff blow: GTRI

PTI

New Delhi

India is expected to remain largely insulated from the impact of the US decision to impose 100% tariffs on certain patented drugs, owing to its strong dominance in low-cost generic medicine exports, think tank GTRI said on Friday.

 US President Donald Trump signed an executive order on April 2 imposing steep tariffs on select patented pharmaceuticals and related inputs, citing national security concerns linked to foreign drug dependence. 

  The move follows a Section 232 investigation initiated in May 2025. However, GTRI noted that India’s export profile provides significant protection. Generic medicines, which account for over 90% of US drug consumption, remain exempt for now, likely for about a year to avoid shortages and price spikes.India exported pharmaceutical goods worth $9.7 billion to the US in 2025, representing 38% of its global pharma exports of $25.8 billion. This heavy reliance on generics shields the country from immediate disruption.

 Nonetheless, risks remain for Indian firms involved in branded or speciality drugs, as well as those supplying inputs for patented medicines, which could face tariff pressures. Experts also flagged uncertainty if the tariff scope expands to include generics in the future.

 The tariffs are expected to impact countries such as Ireland, Germany, Switzerland and Japan more significantly, as they dominate high-value patented drug exports to the US. Experts added that the evolving US trade stance signals a broader shift towards protectionism in critical sectors such as pharmaceuticals. This could increase compliance costs and regulatory scrutiny for exporters globally. For India, maintaining its competitive edge in generics, while gradually moving up the value chain into complex formulations and speciality drugs, will be key to sustaining long-term export growth.