Trump’s 100% Tariff on Pharma Imports: What's Ahead for India’s Pharmaceutical Startups

On October 1, 2025, a tectonic shift is set to hit the global pharmaceutical trade—and India, the so-called “pharmacy of the world,” may find itself right at the epicenter. The announcement by US President Donald Trump to slap a 100% tariff on branded and patented pharmaceutical imports has stirred deep concern across India’s pharmaceutical industry and its fast-growing health-tech and biotech startup ecosystem.

Behind Trump’s decision lies a simple but controversial goal: bring manufacturing home. In a fiery post on Truth Social, he declared that “any branded or patented pharmaceutical product” entering the US will face the tariff unless its manufacturer is building—or has already begun construction of—a plant within America. It’s a push to protect American jobs and strengthen domestic production, but the ripple effects are global, and India, with its outsized role in supplying affordable medicines to the world, stands to feel the tremors most intensely.

India’s Big Pharma on the Line

For decades, India has worn the crown of being the world’s pharmacy, supplying low-cost, high-quality medicines to developed and developing nations alike. The US alone imports nearly $8 billion worth of Indian pharmaceuticals every year, spanning branded generics, formulations, and active pharmaceutical ingredients (APIs).

But a 100% tariff changes the equation overnight. Indian drugs could suddenly become twice as expensive in the US, eroding the cost advantage that Indian companies have painstakingly built over the years.

Analysts say this could force big players like Sun Pharma, Dr. Reddy’s, Cipla, Lupin, and others to rethink their global strategies. For companies with a heavy reliance on US exports, the tariff could mean shrinking margins, stalled growth, and the difficult choice of either absorbing massive losses or passing higher costs onto patients.

“The US market has long been the backbone of revenue for Indian pharma. A 100% tariff essentially cripples competitiveness. Companies will be compelled to consider joint ventures, acquisitions, or even building manufacturing capacity in the US,” said a senior industry expert.

Startups: Collateral Damage in the Crossfire

While India’s pharma giants might still have the muscle to adapt, the country’s health-tech and biotech startups are staring at a much steeper climb. These young ventures often depend on niche patented products, R&D collaborations, and licensing deals with American partners. For them, Trump’s tariff order is not just a setback—it’s a potential blockade.

“Startups don’t have the capital reserves of large pharma companies to simply set up shop in the US,” explained an incubator official. “This move creates a formidable entry barrier, leaving Indian biotech entrepreneurs at risk of being locked out of one of the most lucrative markets.”

The fear is that this could stifle the very innovation that India’s startup ecosystem has been celebrated for in recent years. From next-gen drug discovery to cutting-edge biotech research, many of these innovations are designed with global markets, particularly the US, in mind. Now, their path forward looks uncertain.

A Bigger Trade Puzzle

This latest blow doesn’t exist in isolation. Trump’s tariff move is part of a broader protectionist push, one that stretches beyond pharmaceuticals. The new trade regime also targets sectors like furniture and heavy trucks, while Indian goods in general are now staring at a 50% tariff wall. Add to that additional penalties on trade with Russia, and the road ahead for exporters looks increasingly bumpy.

Trade watchers warn of a potential flashpoint between India and the US. With pharmaceuticals being one of India’s strategic strongholds in trade, this policy could quickly snowball into a larger confrontation between the two economies.

What’s Next for India?

In the immediate term, all eyes are on policymakers in New Delhi. Industry leaders are calling for urgent diplomatic engagement with Washington to carve out exemptions or soften the blow for Indian pharma exports.

At the same time, many believe this could accelerate long-term shifts in strategy. India may push harder to diversify its export markets, strengthen domestic biotech infrastructure, and even encourage Indian pharma majors to make bold acquisitions overseas to safeguard access to the US market.

Yet the road ahead is fraught with uncertainty. If the tariffs go into effect as planned, the impact could be transformative—reshaping not just India’s pharmaceutical exports, but the very contours of the global pharmaceutical supply chain.

For now, India’s pharma giants and startups alike stand at a crossroads: either adapt to this new world order or risk losing their hard-earned place on the global stage.