In a move that could significantly disrupt global pharmaceutical trade, former US President Donald Trump has signalled the possibility of imposing up to a 250% tariff on drug imports, a decision that could directly impact India’s $50 billion pharma export engine.
In an interview with CNBC, Trump mentioned that he would begin with a “small tariff,” then gradually raise it to 150%, and eventually to 250% — all within a span of 12 to 18 months. While he had earlier proposed a 200% tariff in July, this new upper limit marks the most aggressive stance he has taken so far on pharmaceutical imports.
Section 232 Investigation Fuels the Push
Back in April, the Trump administration initiated a Section 232 investigation into pharmaceutical imports. This legal provision allows the US to assess whether certain imports threaten its national security. Trump appears to be leveraging this law to pressure global drug manufacturers into shifting more production to US soil.
“I want these companies to make our medicines here,” Trump emphasized, citing the declining trend in domestic drug manufacturing over the years.
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India’s Pharma Industry in the Crosshairs
India, which plays a critical role as a global pharmaceutical supplier — especially to the US — could face severe consequences if these steep tariffs come into effect. With Indian companies exporting a wide range of generic and specialty drugs to the American market, any increase in tariffs could hit profit margins, disrupt supply chains, and affect global drug pricing.
India’s pharma exports to the US alone form a large chunk of its global business. A tariff this high would not only hurt Indian pharmaceutical companies but also potentially increase drug prices for American consumers.
Global Pharma Firms React Swiftly
Major global pharmaceutical players like Eli Lilly and Johnson & Johnson have already announced new investments in their US manufacturing facilities, likely in anticipation of Trump’s policy shift. These moves signal a growing urgency among pharma giants to align with Trump’s “America First” agenda and avoid being penalized under future tariffs.
What Comes Next?
While this policy is still in its early discussion phase and would require formal approval, the mere announcement has created a wave of concern across international markets, especially in emerging economies like India that rely heavily on pharmaceutical exports.
For now, Indian policymakers and drug manufacturers will be closely monitoring developments in the US as Trump’s potential return to power in the upcoming elections could accelerate this aggressive trade stance.
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