Overview
- In late July 2026, President Trump unveiled a tariff timetable that keeps imports duty-free through 2028 before steep duties take effect to encourage onshoring of generics.
- The proposal calls for zero tariffs until August 1, 2028, then a 100% tariff for one year beginning August 1, 2028, and a 200% tariff from August 1, 2029.
- New Delhi and India’s pharma industry have raised the issue in bilateral trade talks and are seeking carve-outs or concessions to blunt an estimated $9.5–$10 billion exposure to U.S. exports.
- Drugmakers and analysts say rapid reshoring is commercially and structurally impractical because most U.S. API capacity is limited, so firms plan to diversify export markets, review portfolios, and expand U.S. capacity selectively rather than relocate en masse.
- If implemented, the tariffs could raise U.S. patient prices and risk supply disruptions, but outcomes remain uncertain pending detailed rules, possible exemptions, company responses, and legal or trade challenges.