Key Points

That is because exports to the US -- accounting for 20 per cent of the Indian pharmaceuticals market -- primarily comprise generic, off-patent medicines which may not come in ambit of these tariffs

"The imposition of 100 per cent tariff by the US on imports of branded and patented pharmaceutical products starting October 1, 2025 may not significantly hurt Indian drug makers," said Anuj Sethi, Senior Director, Crisil Ratings.

To be sure, some domestic formulation makers have niche presence in the branded and patented drugs space, but the contribution of those drugs to their revenue is modest, he mentioned.

Moreover, given the largely non-discretionary nature of these products, majority of the tariff cost is likely to be passed through. Some of these domestic companies also have manufacturing facilities in the US, which would make them exempt from the new levies.

"Strong balance sheets further support the credit quality of these companies. That said any imposition of further tariffs, pending outcome of the ongoing US Section 232 investigation, remains monitorable," said Sethi.

The hike in US tariff mainly targets branded and patented drugs, exported by multinational pharma giants such as Pfizer and Novo Nordisk.

The increase in the import tariff comes in the backdrop of Trump's severe criticism of big pharma companies for the high prices they are charging in the US market.

Indian generic drugs, on the other hand, are cheaper substitutes for these branded drugs in treating diseases ranging from cancer to diabetes and help to keep the cost of medicines within the affordable range for US consumers. Around 40 per cent of the generic drugs sold in the US market are imported from India.

Indian companies ship about $20 billion worth of generic medicines to the US every year, with Sun Pharma, Dr Reddy's Laboratories, Cipla, Lupin, and Aurobindo Pharma among the major exporters.

The US market accounts for around a third of India's pharmaceutical exports.

- IANS