US President Donald Trump has announced a phased tariff policy on imported generic medicines, proposing duties of up to 200% in an effort to encourage pharmaceutical manufacturing within the United States. The policy, set to begin on August 1, 2026, will allow a two-year tariff-free period before significantly increasing import duties.
Under the plan, imported generic medicines will continue to attract zero tariffs until July 2028. From the third year, imports will face a 100% tariff, which will increase to 200% thereafter. Trump said the measure is designed to incentivise pharmaceutical companies to establish manufacturing facilities in the US rather than relying on overseas production.
Announcing the policy on his Truth Social platform, Trump stated that companies choosing not to shift manufacturing to the US within the transition period would face higher import costs. He added that the existing policy for patented, branded, and innovative medicines would remain unchanged.
The announcement has drawn attention in India, which is one of the largest suppliers of generic medicines to the US market. According to industry estimates, Indian pharmaceutical exports to the US reached USD 9.7 billion in FY 2024-25, representing nearly 38% of India’s total pharmaceutical exports. Indian manufacturers also account for a substantial share of generic prescriptions dispensed in the United States.
While the long implementation timeline provides companies with several years to prepare, the proposal has created uncertainty for exporters that rely heavily on the US market. Industry observers believe the impact will depend on the final structure of the policy, possible exemptions, and whether companies expand manufacturing operations within the United States.
The announcement also comes despite earlier trade discussions between India and the US that included provisions for negotiated outcomes on generic pharmaceuticals and pharmaceutical ingredients, leaving questions about how the proposed tariff framework will align with those commitments.
