New Delhi: In a move that could reshape the global pharmaceutical supply chain, US President Donald Trump has announced a phased tariff regime on imported generic medicines, a decision that could significantly affect India's multi-billion-dollar pharmaceutical exports to the United States.

Announcing the policy on his Truth Social platform on Wednesday, Trump said imported generic drugs will continue to attract zero tariffs from August 1, 2026, until August 2028. 

Thereafter, the tariff will rise to 100% for one year before increasing to 200%, one of the steepest duties proposed on pharmaceutical imports.

Trump said the objective behind the move is to encourage pharmaceutical companies to manufacture generic medicines within the United States instead of relying on overseas production.

‘This is in order to RESHORE Generic Pharmaceutical Production into America,’ he said, adding that companies choosing not to establish manufacturing plants and equipment in the US during the transition period would face heavy penalties through the tariff regime.

According to Trump, the policy is intended to strengthen domestic manufacturing and safeguard the country's healthcare supply chain.

He also said the policy on patented, branded and innovative medicines, introduced earlier this year, would remain unchanged.

The latest announcement comes after Trump signed an executive order on April 2 imposing a 100% tariff on imported branded pharmaceutical products unless manufacturers either shift production to the US or agree to government-backed pricing arrangements.

The development is particularly significant for India, often referred to as the 'pharmacy of the world.' India is the largest supplier of generic medicines to the US and plays a critical role in meeting American healthcare demand.

According to the Global Trade Research Initiative, India exported $9.7 billion worth of pharmaceuticals to the US in 2025, accounting for 38% of its global pharmaceutical exports worth $25.8 billion.

Indian-made generic medicines are widely prescribed across the US for treating hypertension, diabetes, cancer, infectious diseases and mental health disorders, making India an indispensable supplier in the American healthcare system.

The announcement also comes at a time when India and the US are yet to conclude an interim trade agreement.

Reports suggest New Delhi has refused to rush a limited trade deal after recent negotiations failed to bridge key differences, maintaining that any agreement must protect India's long-term economic interests.

Industry experts are now closely watching how Indian pharmaceutical companies respond during the two-year transition period and whether manufacturers accelerate investments in US-based production to avoid the steep tariffs.