India Spared from US Tariffs on Patented Medications Amid Strong Generic Export Industry

US Tariffs on Patented Drugs to Have Limited Impact on India

India is unlikely to be significantly impacted by US President Donald Trump's announcement of 100 per cent tariffs on certain patented drugs, according to the Global Trade Research Initiative (GTRI). This is due to the country's dominance in low-cost generic drug exports to the US.

On April 2, 2026, Trump signed an executive order imposing a 100 per cent ad valorem duty rate on the import of certain patented pharmaceuticals and associated pharmaceutical ingredients. This order builds on a Section 232 investigation launched on May 1, 2025, which cited national security risks from dependence on foreign drug supplies.

The Global Trade Research Initiative stated that the move has left "India largely protected, given its dominance in low-cost generic drug exports to the US." Generic medicines make up over 90 per cent of US drug use and are exempt for now, likely for about a year, to avoid shortages and price increases.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

In 2025, India exported USD 9.7 billion worth of pharmaceuticals to the US, accounting for 38 per cent of its global pharma exports of USD 25.8 billion. However, Indian firms producing branded or speciality drugs, or supplying inputs for patented medicines, could face tariff pressure.

The order timing, issued on the first anniversary of the earlier "Liberation Day" tariff push, signals a continuation of Washington's aggressive trade strategy. The 100 per cent tariffs will mainly affect countries like Ireland, Germany, Switzerland, Belgium, Denmark, the United Kingdom, and Japan, which are major exporters of patented and high-value drugs, including biologics, to the US.

GTRI founder Ajay Srivastava noted that the order does not exempt countries with trade arrangements with the US, including the European Union and Japan. He also stated that with the US Supreme Court striking down reciprocal tariffs, Washington is likely to rely more heavily on tools such as Section 232 of the Trade Expansion Act of 1962 (national security) and Section 301 of the Trade Act of 1974 (foreign trade barriers) to justify tariffs on a wide range of products and countries.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Srivastava added that the court's decision has not changed the tariff strategy, it has only pushed the administration to shift the legal basis while keeping the pressure intact. This creates a deeper problem for trading partners, and even countries that sign trade deals with the US are not insulated from such actions, as these investigations can still be launched irrespective of existing agreements.