US Imposes 100% Tariff on Imported Patented Drugs; Indian Pharma Spared for Now

US President Donald Trump has imposed a 100% tariff on imported patented drugs and their active pharmaceutical ingredients (APIs), citing national security concerns under Section 232. The move aims to reduce America’s dependence on foreign manufacturing, especially as over 53% of patented drugs and only 15% of APIs used in the US are produced domestically. However, generic drugs and their ingredients are exempt, shielding India — which supplies 90% of its $9.7 billion pharma exports to the US as generics — from immediate impact. Key players like Dr Reddy’s, Sun Pharma, Cipla, and Zydus Lifesciences, with around 30 manufacturing units in the US, stand protected for now. The tariffs target high-value drug exporters like Ireland, Germany, Switzerland, and Japan. A limited relief allows a reduced 20% duty for companies with approved plans to shift production to the US. While Indian pharma remains largely insulated, trade experts warn of future policy shifts. In response, many Indian firms are accelerating onshore US investments to hedge against long-term regulatory and trade risks.