TOI correspondent from Washington: High on tariff revenue he claims will make America rich again, MAGA supremo Donald Trump threw the kitchen sink at the global pharma industry on Thursday, imposing a 100 per cent tax on branded or patented drugs unless foreign companies commit to making them in the US. The move is not expected to affect India substantially since nearly half of its pharma exports are off-patent generic drugs, which Trump has spared, and the few Indian companies that export branded or patented products have plants in the US as required by the US President.
In a series of tariff-related posts in which he spoke of the need to protect and ramp up domestic production and invoked national security, Trump also announced a 25 percent tax on big heavy trucks, a 50 percent tariff on all kitchen cabinets, bathroom vanities, and associated products, and a 30 percent tariff on upholstered furniture, all of which affect India to only a small degree because the volume of exports in these sectors is relatively modest.
Indian auto companies like Tata Motors and Ashok Leyland exported only about $35M worth of heavy trucks to the US in 2024, and exports of kitchen and bathroom accessories from companies such as Cera Sanitaryware, Greenply Industry, and Century Plyboards are similarly modest. European Union, China, Vietnam and South East Asian countries appear to stand to lose most from the new targeted tariffs.
India’s $ 66 billion pharmaceutical industry , with $12 billion annual exports to the U.S last year., is however keeping a sharp eye on the latest Trump edict considering America accounts for more than a third of India’s pharma export revenue of around $ 30 billion. The MAGA boss has also hinted at future pharma-wide measures, potentially up to 250% over 18 months, which could include generics, to drum up local production.
That said, Trump’s post on the subject on Thursday provided some direct and implicit breathing space, stating, “starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America.” He clarified that “IS BUILDING” will be defined as, “breaking ground” and/or “under construction,” adding, “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”
Sun Pharma, Dr Reddy’s, Glenmark, Cipla, and Lupin, among the few companies that supply branded or patented products to the US besides generics, have plants on the eastern seaboard from Massachusetts to NewYork New Jersey to North Carolina. Generic drugs from India, including antibiotics, statins, and gliptins, meet almost 40 percent of US needs.
The US President has made tariffs (taxes) on imports an article of faith, claiming Washington will make trillions in revenue, even though current numbers are only around $ 30billion per month. Most experts have said the higher import costs are largely borne by the American importer who will eventually pass it on to the consumer. On Thursday, the US President spoke of passing on some of the tariff revenue to American farmers, who are sitting on soy beans and corn worth billions after China stopped imports because of the US tariff on its exports. Some economists say this effectively means American consumers are subsidizing American farmers in a 21st century version of catch-22.
In a series of tariff-related posts in which he spoke of the need to protect and ramp up domestic production and invoked national security, Trump also announced a 25 percent tax on big heavy trucks, a 50 percent tariff on all kitchen cabinets, bathroom vanities, and associated products, and a 30 percent tariff on upholstered furniture, all of which affect India to only a small degree because the volume of exports in these sectors is relatively modest.
Indian auto companies like Tata Motors and Ashok Leyland exported only about $35M worth of heavy trucks to the US in 2024, and exports of kitchen and bathroom accessories from companies such as Cera Sanitaryware, Greenply Industry, and Century Plyboards are similarly modest. European Union, China, Vietnam and South East Asian countries appear to stand to lose most from the new targeted tariffs.
India’s $ 66 billion pharmaceutical industry , with $12 billion annual exports to the U.S last year., is however keeping a sharp eye on the latest Trump edict considering America accounts for more than a third of India’s pharma export revenue of around $ 30 billion. The MAGA boss has also hinted at future pharma-wide measures, potentially up to 250% over 18 months, which could include generics, to drum up local production.
That said, Trump’s post on the subject on Thursday provided some direct and implicit breathing space, stating, “starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America.” He clarified that “IS BUILDING” will be defined as, “breaking ground” and/or “under construction,” adding, “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”
Sun Pharma, Dr Reddy’s, Glenmark, Cipla, and Lupin, among the few companies that supply branded or patented products to the US besides generics, have plants on the eastern seaboard from Massachusetts to NewYork New Jersey to North Carolina. Generic drugs from India, including antibiotics, statins, and gliptins, meet almost 40 percent of US needs.
The US President has made tariffs (taxes) on imports an article of faith, claiming Washington will make trillions in revenue, even though current numbers are only around $ 30billion per month. Most experts have said the higher import costs are largely borne by the American importer who will eventually pass it on to the consumer. On Thursday, the US President spoke of passing on some of the tariff revenue to American farmers, who are sitting on soy beans and corn worth billions after China stopped imports because of the US tariff on its exports. Some economists say this effectively means American consumers are subsidizing American farmers in a 21st century version of catch-22.
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