India's pharma takes 'wait-and-watch' approach to tackle Trump's 200% tariff plan | What next?

Published 22 July 2026 · us

Donald Trump on Wednesday announced a new plan to bring drug manufacturing back to the United States. Under the plan, imported generic medicines will face

Donald Trump on Wednesday announced a new plan to bring drug manufacturing back to the United States. Under the plan, imported generic medicines will face no tariffs for the next two years. But after that, tariffs will rise to 100% in August 2028 and 200% later. The move could have major implications for India, which accounts for the largest share of generic drug exports to the US. In a post on Truth Social, Trump said beginning August 1, the US will continue to have a zero per cent tariff on all generic drugs brought into the country for two years, after which it will be raised to 100 per cent for one year, and 200 per cent thereafter. Quick answers to key questions • 5 QUESTIONS 1 What is the timeline for Trump's proposed tariff increase on generic drugs? ⌵ Trump's tariff plan includes maintaining a 0% tariff on generic drugs entering the US until August 1, 2026, after which the tariff will increase to 100% for one year, and finally to 200% from August 2028. 2 Why is Trump implementing tariffs on generic drugs imported from India? ⌵ The tariffs aim to encourage generic pharmaceutical manufacturing to be reshore in the US, imposing penalties on companies that do not establish production facilities within the specified time frame.

3 How might Indian drugmakers respond to the new tariff policy? ⌵ Indian drugmakers may explore options such as shifting some high-margin production to the US, expanding into other international markets, or waiting for more details before making significant decisions. 4 What impact could the 200% tariff have on the cost of generic drugs in the US? ⌵ Experts warn that imposing tariffs on imported generics could raise costs and potentially lead to shortages of essential medications, as many Americans rely on these affordable drugs. 5 Should Indian pharmaceutical companies establish manufacturing in the US to avoid tariffs? ⌵ While establishing manufacturing in the US might mitigate tariff impacts, it's uncertain if it's financially viable due to high costs and time needed for setup, making many companies hesitant to relocate production. "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 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," Trump said.