Archive · 25 Jul 2026
US Tariff on Indian Generic Drugs
The US has announced a new tariff plan on imported generic medicines, which will gradually increase over the next few years.
This plan is expected to have a limited impact on Indian pharmaceutical companies in the near term.
Indian companies supply a significant portion of generic drugs to the US and have been diversifying their markets to reduce dependence on the US.
The tariff plan aims to boost domestic production of generic drugs in the US, but Indian companies face challenges in adapting to the new tariffs, including supply chain complexities and regulatory approvals.
The US announced a phased tariff plan on imported generic medicines, with tariffs increasing from 0% to 200% by August 1, 2029.
Indian pharmaceutical companies supply nearly 47% of all generic prescriptions dispensed in the US.
The tariff plan is expected to have a limited impact on Indian companies' financial and credit profiles in the near term.
Indian companies have diversified their revenue base across various markets, reducing dependence on the US.
Companies with greater exposure to the US market, such as Sun Pharma and Dr Reddy's Laboratories, may face higher pressure due to the tariffs.
- Who
- Indian pharmaceutical companies and the US administration
- What
- Implementation of a phased tariff plan on imported generic medicines
- When
- Tariff increases scheduled from August 1, 2028
- Where
- United States
- Why
- To encourage domestic production of generic drugs in the US
Indian Pharmaceutical Companies
US Administration
Impact on Business
Indian Pharmaceutical Companies
Indian companies may face challenges in adapting to the new tariff structure, including supply chain complexities and regulatory approvals.
US Administration
The US aims to boost domestic production of generic drugs, potentially reducing dependence on imports.
Market Diversification
Indian Pharmaceutical Companies
Indian companies have diversified their revenue base across various markets, reducing dependence on the US.
US Administration
The US seeks to protect its domestic market and encourage local manufacturing.
- US Pharma Imports from India
- $9.47 billion in FY26
- Percentage of India's Pharma Exports to US
- 30%
- Generic Prescriptions in US
- 47% supplied by Indian companies
- EBITDA Margins of Indian Pharma Companies
- 26.1% in FY26
- Revenue Growth
- 11% in FY26
- US Business Share for Leading Indian Companies
- 33.4% in FY26
- Tariff Schedule
- 0% until July 31, 2028; 100% from August 1, 2028; 200% from August 1, 2029