Trump Tariff On India: Shocking 25% Hike Announced For August 2025

How far the Indian pharma Industry may be affected by 100 % TARIFF ON PHARMA PRODUCTS IN USA

Dated 27.09.2025 : The new 100% tariff announced by the U.S. government on pharmaceutical products is highly targeted, and its impact will primarily fall on a specific segment of the global pharma industry, with a potentially limited direct impact on the bulk of India’s exports for now.

1. The Directly Targeted: Branded and Patented Drug Manufacturers

The tariff explicitly targets “any branded or patented Pharmaceutical Product” unless the company is actively building a manufacturing plant in the U.S.

Global Innovator Companies: The primary entities affected are Multinational Pharma companies (mostly non-Indian, European, and American) who manufacture their branded, high-value, patented drugs outside the U.S. and import them. These are typically expensive, high-margin products.
Indian Companies with Branded/Specialty Portfolios: A few large Indian companies, such as Sun Pharmaceutical Industries and Dr. Reddy’s Laboratories, which have specialty/branded divisions that export patented or branded products, will face the tariff for those specific items unless they have U.S. manufacturing.
- Sun Pharma’s specialty brands, for example, are a significant portion of its U.S. revenue and are largely produced outside the U.S., making that part of its business highly vulnerable.
- Dr. Reddy’s also has a high overall exposure to the US market, and its non-US manufactured products are at risk.

2. The Largely Exempted (for now): India’s Generic Drug Industry

The vast majority of India’s pharmaceutical exports to the U.S. are generic drugs (off-patent, low-cost alternatives). Since the tariff specifically targets “branded or patented” products, the bulk of Indian exports are currently exempt.

Indian Generic Majors: Companies like Cipla, Lupin, Zydus Lifesciences, and Aurobindo Pharma rely heavily on generics, which remain safe from this specific 100% tariff.
The Exemption Clause: Crucially, many of the largest Indian companies (Dr. Reddy’s, Sun Pharma, Cipla, Lupin) already have manufacturing or packaging facilities in the U.S., which exempts their products made in those plants.

3. The Ultimate Impacted: The American Consumer and Healthcare System

In the long run, the tariff will have a significant effect on U.S. stakeholders:

U.S. Importers and Distributors: They will be responsible for paying the 100% tariff, which will essentially double the cost of the imported branded drugs.
U.S. Consumers and Patients: The higher costs will inevitably be passed on to patients, insurance companies, and government programs (Medicare/Medicaid), leading to higher healthcare costs for the U.S.
Wholesale Supply Chain Disruption: A major disruption in the supply of these patented drugs could lead to shortages in the U.S. market.

Potential Future Risks for India

While the immediate impact on India’s core generic business is limited, there are significant risks:

Complex Generics and Biosimilars: There is ambiguity over whether complex generics or biosimilars (areas where Indian firms are moving up the value chain) could be included in the tariff at a later date.

Future Tariff Expansion: President Trump has hinted at the possibility of future tariffs being hiked to 150% and even 250% over the next year or two, which could eventually include all generic drugs. This remains the biggest long-term threat to the Indian pharma sector.

TRUMP TARIFF IS STILL NOT A CLOSED CHAPTER

Dated 10.09.2025 : The 50 % tariff on India by U.S.A became operational on 27th , August 2025 and it appeared that the negotiations had reached a dead end .

But today both U S President Mr Donalad Trump and Indian Prime Minister Mr Narendra Modi have tweeted almost similar messages indicating that the negotiations are continuing between the two countries and they are hoping for a successful completion of talks.

Indian PM has tweeted “ India and the US are close friends and natural partners. I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership. Our teams are working to conclude these discussions at the earliest. I am also looking forward to speaking with President Trump. We will work together to secure a brighter, more prosperous future for both our people “

However, the current situation is:

High-level engagement: Both U.S. President Donald Trump and Indian Prime Minister Narendra Modi have publicly affirmed that talks are continuing. In recent social media posts, both leaders expressed optimism about a successful outcome and referred to each other as “very good friends.”
Conflicting messages: While the leaders are striking a conciliatory tone, some of their top officials, like U.S. Trade Adviser Peter Navarro, have continued to issue strong warnings to India regarding its trade with Russia and what he calls India’s “high tariffs.” This creates a sense of uncertainty about the true direction of the negotiations.
Goals of the talks: The core issues remain the same: the U.S. wants greater access to India’s markets, particularly for agricultural and dairy products, while India is seeking to protect its domestic industries and farmers. India has also made it clear that it will continue to purchase Russian oil based on its national energy security needs.
Potential for a new deal: The recent public exchanges and reports of ongoing talks suggest a potential thaw in the relationship. Some analysts believe that the tariffs may be a temporary measure to gain leverage and that they could be replaced by more targeted measures or even reduced if a deal is reached. An Indian trade delegation is reportedly scheduled to be in Washington soon for the next round of talks.

In short, while the relationship has been strained by the new tariffs, both sides appear to be keeping the lines of communication open and are working towards a resolution. However, the path forward is not entirely clear, and the outcome remains to be seen.

UPDATE ON TRUMP TARIFF ON INDIA dated 27.08.2025 :

As of today, August 27, 2025, an additional 25% tariff on many Indian goods has gone into effect, bringing the total tariff rate to 50% for most products. This new structure is a result of an executive order issued by the U.S. government, which cites India’s continued purchases of Russian oil as a key reason for the measure.

Tariff Rate: The total tariff on a wide range of Indian goods is now 50%. This is an increase from the previous 25% tariff that was already in place.

Affected Sectors: Labor-intensive sectors in India are expected to be the hardest hit, including textiles, seafood, gems, jewelry, and leather.

Exemptions: Some key Indian exports, such as pharmaceuticals, electronics, and petroleum products, are currently exempt from the new tariff.

Impact: Analysts and industry experts in India are concerned about the negative effects on exports, jobs, and overall economic growth. Indian authorities are reportedly working on strategies to mitigate the impact.

The new tariff structure, which has raised the total tariff rate on many Indian goods to 50%, is expected to have a significant impact on several key Indian export sectors. The extent of this impact varies, but the most affected industries are those that are labor-intensive and have a high reliance on the U.S. market

1. Textiles and Apparel: This sector is expected to be one of the hardest hit. The new tariffs could make Indian textiles and garments uncompetitive in the U.S. market, especially when compared to rivals like Bangladesh and Vietnam, which face much lower tariffs.The tariffs on some textile products are now as high as 60%. This has already led to reports of production halts in major textile hubs like Tirupur, Noida, and Surat. Exports from this sector could decline sharply, putting thousands of jobs at risk.

2. Gems and Jewelry: The gems and jewelry industry, particularly the diamond polishing sector, is highly dependent on the U.S. market. With tariffs rising to over 50%, exports are expected to see a significant decline.The U.S. accounts for about 40% of India’s gems and jewelry exports. Industry leaders have expressed fears of mass job losses, and some units have already begun to shed contract workers.

Seafood: The seafood industry, particularly shrimp exports, is facing a severe blow. The new tariffs could make Indian shrimp uncompetitive, especially against competitors like Ecuador. The U.S. is a major market for Indian shrimp, and the new duties, which can exceed 60%, are expected to lead to a significant drop in export volumes and prices. This is causing distress among farmers in key aquaculture regions.

Leather and Footwear: With the U.S. accounting for a substantial portion of India’s leather exports, the new tariffs will make Indian products much more expensive and less competitive.Exporters are concerned about a sharp drop in orders and are exploring workarounds, such as partial production in other countries, to circumvent the high tariffs.

Other Affected Sectors:

Carpets and Handicrafts: These sectors, which have a high reliance on the U.S. market, are also expected to see a sharp decline in exports.

Agricultural Products: Exports of items like Basmati rice, spices, and tea are also subject to the new tariffs, which could affect their competitiveness against products from other countries.

Automotive Components: While some auto parts are subject to the new 50% tariff, others remain at the previous 25% rate. The overall impact is expected to be negative, as U.S. buyers may shift to suppliers from Mexico, Europe, and other parts of Asia.

Organic Chemicals: This sector is also facing duties exceeding 50%, which will particularly impact small and medium-sized enterprises (MSMEs).

Extent of Overall Impact:

Export Value: Experts estimate that the new tariffs will affect approximately $60.2 billion worth of Indian exports.

Export Volumes: A significant plunge in export volumes, potentially as high as 70% in the most affected sectors, is feared.

Job Losses: The tariffs are expected to put hundreds of thousands of jobs at risk, particularly in the labor-intensive sectors.

GDP Growth: While India’s economy is largely driven by domestic consumption, some analysts predict that the tariffs could shave off a portion of the country’s GDP growth in the coming fiscal year.

Exempted Sectors:

It’s important to note that certain sectors have been exempted from the new tariffs, at least for now. These include Pharmaceuticals ,

Electronics (including smartphones) , Petroleum products .

Some metals like steel and aluminum, which remain at the existing 25% tariff.

Trump Tariff on India is once again dominating global headlines. On July 30, 2025, President Donald Trump unveiled a sweeping 25% tariff targeting Indian exports…

ADDITIONAL TARIFF ON INDIA ANNOUNCED

Update of 06.08.2025 : In a significant escalation of trade tensions, President Trump has signed an executive order imposing an additional 25% tariff on India, bringing the total tariff rate to 50%.

Here are the key details of this new announcement:

Total Tariff Rate: The new tariff is an additional 25% on top of the 25% tariff that went into effect on August 1st. This brings the total tariff on a wide range of Indian goods to 50%.
Reason for Increase: This additional tariff is specifically a “penalty” for India’s continued purchases of Russian oil. The executive order states that the measure is necessary to address the “national emergency” of Russia’s actions in Ukraine, and that India’s oil purchases are seen as funding Russia’s war machine.
Effective Date: This new 25% tariff will be effective in 21 days, on August 27, 2025.
Previous Warnings: This latest move follows a series of public warnings from President Trump over the past few days, where he had stated that he would “substantially” raise tariffs on India if it continued its energy trade with Russia.

This new development marks a serious escalation and has significantly intensified the trade dynamic between the two nations, putting further strain on a relationship that was already tense. India’s government has previously called the US’s targeting of India “unjustified and unreasonable,” and it remains to be seen how they will respond to this latest increase.

Dated 31.07.2025 : U.S President Donald Trump announced yesterday his plans to impose fresh tariffs on india effective from August 1 , 2025 . Yesterday, he announced significant tariff changes impacting India, primarily driven by President Donald Trump’s “Liberation Day” trade strategy. Here’s a summary of the proposed changes:

1. 25% Tariff on Indian Goods:

President Trump announced a 25% tariff on a wide range of goods imported from India, effective August 1, 2025.
This tariff is a response to what the US perceives as India’s “far too high” tariffs and “strenuous and obnoxious non-monetary trade barriers.”
Sectors expected to be significantly affected include:
- Apparel and textiles
- Gems and jewelry
- Petrochemical products
- Automobiles and auto components
- Smartphones and solar modules
- Marine products
- Select processed food and agricultural items
Exclusions: Pharmaceuticals, semiconductors, and critical minerals have reportedly been excluded from this tariff hike.

2. Additional Penalty for Russian Ties:

In addition to the 25% tariff, President Trump announced an unspecified “penalty” on India for its continued purchases of military equipment and energy from Russia.
This is linked to the ongoing conflict in Ukraine, with the US aiming to discourage countries from economic engagement that could be seen as undermining international sanctions against Russia.

Context and India’s Reaction:

These announcements come despite ongoing negotiations between India and the US for a bilateral trade agreement. A US trade delegation is expected to visit India in late August for further talks.
The Indian Ministry of Commerce and Industry has stated that it has “taken note” of the US President’s statement and is “studying its implications.” India has also reiterated its commitment to protecting its national interests, farmers, entrepreneurs, and MSMEs.
Many Indian industry bodies and economists have expressed concern about the potential negative impact on India’s exports and GDP growth, though some hope these tariffs will be temporary and a comprehensive trade deal will be finalized soon.
The US currently has a significant trade deficit with India, which is a key factor in the US’s push for these tariff changes

As of July 30, 2025, India has not officially announced any reciprocal tariffs in direct retaliation to the USA’s proposed 25% tariff.

Here’s what India’s stance and actions are:

“Studying Implications”: The Indian Ministry of Commerce and Industry has stated that it has “taken note” of President Trump’s announcement and is “studying its implications.” This indicates a cautious and measured approach rather than immediate retaliatory action.
Commitment to National Interest: India has reiterated its commitment to protecting its national interests, including those of its farmers, entrepreneurs, and MSMEs (Micro, Small, and Medium Enterprises). This suggests that any future response will be guided by these principles.
Ongoing Negotiations: India and the US have been engaged in negotiations for a bilateral trade agreement for several months, with a US trade delegation expected to visit India in late August for further talks. India continues to express its commitment to concluding a “fair, balanced and mutually beneficial” trade agreement.
WTO Rights: While not a direct announcement of tariffs, India has reserved its right under WTO (World Trade Organization) norms to impose retaliatory duties. This keeps open the option for reciprocal action if negotiations do not yield a favorable outcome.
Focus on a Deal: Many Indian industry bodies and officials are expressing hope that these tariffs will be temporary and that a comprehensive trade deal will be finalized soon, which would likely supersede the current tariff situation.

In essence, India’s immediate response has been to assess the situation and emphasize its commitment to ongoing trade talks, while keeping open the possibility of future reciprocal measures if needed.

Trump Tariff on India and other counties:

India is certainly not the only country facing new tariffs from the US under President Trump’s “Liberation Day” trade strategy. This policy, initiated on April 2, 2025, imposed a broad package of import duties affecting a wide range of countries.

Here’s a summary of other countries and regions that have been impacted:

China: The US-China trade war has continued and even escalated. Initially, 10% tariffs were imposed on all imports from China starting February 4, 2025, which were then increased by another 10% on March 4. At one point, baseline US tariffs on Chinese goods peaked at 145%, with China retaliating with tariffs on US goods reaching 125%. However, a 90-day truce was agreed upon on May 12, reducing US tariffs to 30% and Chinese tariffs to 10%.
Canada and Mexico: On February 1, 2025, President Trump invoked the International Emergency Economic Powers Act (IEEPA) to impose 25% tariffs on most goods from Mexico and Canada, citing concerns related to fentanyl trafficking and illegal immigration. These tariffs initially went into effect on February 4, though there were temporary pauses and exemptions for goods covered by the USMCA trade deal.
European Union (EU): The US has reached a trade framework with the EU that imposes 15% tariffs on most European goods, including autos and auto parts, pharmaceuticals, and semiconductors. This was a result of negotiations to ward off an earlier threatened rate of 30% if no deal was reached by August 1.
Japan: A trade framework was announced on July 22, imposing 15% tariffs on Japanese imports, a reduction from a previously threatened 25%. This also includes Japanese cars.
Brazil: On July 30, 2025, President Trump signed an executive order to impose 50% tariffs on Brazil, citing Brazil’s policies and the criminal prosecution of former President Jair Bolsonaro as an “economic emergency.”
Vietnam: A trade deal announced on July 2 would impose a 20% levy on Vietnamese exports to the US, while US goods would enter Vietnam duty-free.
Indonesia: On July 15, planned tariffs on Indonesian goods were lowered to 19% (from a previously threatened 32%), with “over 99% of US products” exported to Indonesia set to be duty-free.
Philippines: Upcoming tariffs on imports from the Philippines were lowered to 19% (from a previous threat of 20%) after a meeting on July 22.
United Kingdom (UK): The UK secured a deal on May 8 to cut tariffs on British autos, steel, and aluminum, among other trade pledges, in exchange for UK reductions on US products.
Steel and Aluminum: Beyond country-specific tariffs, the Trump administration has broadly raised steel and aluminum tariffs to a flat 25% (and even 50% in some cases) without exceptions or exemptions, impacting numerous countries globally.
Automobiles and Auto Parts: A 25% tariff on imported cars and auto parts was scheduled to take effect, impacting many countries.
“Reciprocal Tariffs” on Nearly All Countries: The initial “Liberation Day” executive order imposed a 10% baseline tariff on imports from nearly all countries starting April 5, with higher “reciprocal rates” for 57 countries scheduled to begin on April 9. While many of these higher rates were postponed, the overarching intention of applying tariffs to countries with trade deficits with the US remains.
“Secondary Tariffs” related to Russia/Venezuela: The US has also threatened or imposed “secondary tariffs” on products from any country that purchases Russian-origin goods (including energy) or Venezuelan oil, adding another layer of trade pressure beyond India.