United States President Donald Trump on Thursday announced a 100% tariff on the import of branded or patented pharmaceutical products, unless the company was “building” a manufacturing facility in the country.

Building the manufacturing unit will be defined as “breaking ground” and/or the facility being “under construction”, Trump said on social media.

“There will, therefore, be no tariff on these pharmaceutical products if construction has started,” he added.

The levy will take effect on October 1.

India exported pharmaceuticals worth $8.7 billion to the US in 2024, according to Moneycontrol. This accounted for 31% of India’s pharmaceutical exports. However, these are mainly generic drugs – non-branded medicines with the same active ingredients as other drugs already authorised for sale.

India supplies nearly half of the generics sold in the US, according to the IQVIA Institute. This helps access to critical medicines at affordable prices.

Despite this, Indian pharmaceutical stocks fell 2.6% on Friday after the announcement, Reuters reported,

While tariff on pharmaceuticals is not country-specific, Trump has already imposed so-called reciprocal tariffs on Indian goods and punitive levies for purchasing Russian oil. He has repeatedly alleged that India’s imports were fuelling Russia’s war in Ukraine. The combined tariff rate for India is 50%.

At the time, New Delhi said that it was “extremely unfortunate” that the US had chosen to impose additional tariffs on India “for actions that several other countries are also taking in their own national interest”.

Negotiators from both countries had completed a fifth round of trade talks in Washington in July. The next round, scheduled for August 25, was abruptly cancelled and no fresh dates were announced.

However, Union Commerce Minister Piyush Goyal on Monday met US Trade Representative Jamieson Greer in New York to accelerate trade talks between the two countries, according to reports.

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