President Donald Trump on Wednesday announced a phased tariff plan for imported generic medicines, saying they would continue to enter US duty-free for the next two years before attracting tariffs of up to 200%.In a post on Truth Social, Trump said generic medicines imported into the US would continue to attract zero tariffs from August 1, 2026, for two years, after which the duty would rise to 100% for one year and 200% thereafter.“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 said.“This is done in order to RESHORE Generic Pharmaceutical Production into America, with a penalty to those Companies that decide not to build Plant and Equipment within the stated period of time given to them,” he added.Trump said the policy was designed to strengthen domestic manufacturing and protect American consumers. “The Policy on Patented, Branded, or Innovative Drugs, which has been so successful, will remain as is,” he noted.The US Food and Drug Administration (FDA) estimates that generic medicines account for more than 90% of all prescriptions dispensed in the country, according to PTI.
What it means for India
The announcement is significant for India, often referred to as the “pharmacy of the world” because of its large-scale production of affordable generic medicines.According to a Global Trade Research Initiative (GTRI) report, India exported $9.7 billion worth of pharmaceuticals to the US in 2025, accounting for 38% of its total pharmaceutical exports of $25.8 billion.Indian generic medicines are widely prescribed in the US to treat conditions such as diabetes, hypertension, high cholesterol, cancer, infectious diseases and mental health disorders.According to healthcare analytics firm IQVIA, Indian pharmaceutical companies supply 47% of all generic prescriptions filled at US pharmacies. Their role extends beyond volume, Indian-made generics are estimated to have saved the US healthcare system $219 billion in 2022 alone and $1.3 trillion over the past decade.Indian drugmakers, including Cipla, Sun Pharmaceutical Industries and Dr Reddy’s Laboratories, have become major suppliers in the US market. In 2022, they accounted for more than half of the prescriptions by volume in five of the top 10 therapeutic categories, including medicines for high cholesterol, hypertension, depression, ulcers and nervous system disorders, according to an earlier TOI report.Some of the most commonly prescribed Indian-made generic medicines in the US include Metformin for diabetes, Atorvastatin for high cholesterol, Losartan for high blood pressure, and antibiotics such as Amoxicillin and Ciprofloxacin.The proposed tariff regime is part of Trump’s broader strategy to bring pharmaceutical manufacturing back to the United States and reduce reliance on imported medicines. It follows earlier measures that encouraged branded drugmakers to manufacture in the US or lower prices in exchange for tariff exemptions.The move also comes as the Trump administration prepares another round of tariffs targeting dozens of countries, including India, with the temporary 10% blanket tariff on imports due to expire later this week.According to the Financial Times, Washington is considering fresh tariffs of 10% to 12.5% on imports from around 60 countries, citing concerns over alleged forced labour practices and unfair trade policies.US Trade Representative Jamieson Greer on Tuesday said additional tariff measures could be announced soon. “The US has laws to prohibit trading goods with forced labour. Other countries, most don’t have a law; those that do don’t really enforce it,” Greer told CNBC.“We expect to see some action soon,” he added.The latest announcement comes even as Washington and New Delhi have repeatedly said they are close to finalising a bilateral trade agreement, adding fresh uncertainty to trade relations between the two countries.
