Trump announces 0-200 % tariff plan on import of generic medicine; how it will impact Indias pharma sector

PTC News Desk: US President Donald Trump has announced that imported generic medicines will not face any tariffs for the next two years. However, he warned that after this period, they could be taxed up to 100% initially and later up to 200% if pharmaceutical companies continue making medicines outside the US instead of shifting production to America.

The move is part of Trump's plan to boost manufacturing in the US and reduce the country's dependence on imported medicines. India could be one of the most affected countries because it is among the world's largest producers of generic medicines, and the US is its biggest export market for pharmaceutical products.

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Trump said the two-year tariff-free period is meant to give drug companies enough time to move their manufacturing to the US. After that, imported generic medicines could face heavy tariffs. However, the proposal has not yet become official policy and still needs to go through the government's approval process.

Why is India most affected?

India is known as the "pharmacy of the world" because it produces large quantities of affordable generic medicines. It supplies a major share of generic drugs used in the US, including medicines for diabetes, cancer, infections and other diseases. Many Indian pharmaceutical companies depend heavily on exports to the US.

If high tariffs are introduced, Indian medicines could become more expensive in the US, making them less competitive.

Why the two-year exemption?

The temporary exemption gives pharmaceutical companies time to shift manufacturing to the US. It is also intended to prevent shortages of essential medicines while the US expands its own production.

Experts say moving pharmaceutical manufacturing is much more difficult than shifting factories in industries like electronics because it requires regulatory approvals, inspections and the creation of new supply chains.

Will medicines become more expensive in the US?

It is possible. Generic medicines make up most prescriptions in the US because they are much cheaper than branded drugs. If tariffs increase import costs, drug companies may pass those costs on to distributors and healthcare providers. This could eventually lead to higher medicine prices for patients.