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US President Donald Trump has announced a proposal to impose a phased tariff regime on imported generic medicines

ICICIdirect Research 22 Jul 2026 DISCLAIMER

News: According to media reports, US President Donald Trump has announced a proposal to impose a phased tariff regime on imported generic medicines aimed at encouraging pharmaceutical manufacturing within the United States. Under the proposal, generic drugs imported into the US would face a 0% tariff for two years starting August 1, 2026, after which tariffs would increase to 100% for one year and 200% thereafter for companies that do not establish manufacturing facilities in the US within the specified period. Trump said the policy is intended to reshore generic pharmaceutical production and strengthen domestic drug manufacturing, while clarifying that the existing policy for patented, branded and innovative medicines will remain unchanged. If implemented, the proposal could have significant implications for generic drug exporters, including Indian pharmaceutical companies with substantial exposure to the US market

View: Although this development is not available in fineprint, Indian Pharma exporters with major exposure to the US like Gland Pharma, Aurobindo Pharma, Granules, Dr. Reddys Laboratories, Zydus Lifesciences including others will have a sentimentally negative price reaction to this development. We will continue to monitor the situation and a keep a tab on the development.

Impact: Negative

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