The new tariff agreements announced by US President Donald Trump have spread a wave of concern in the global pharma market. After Japan, Trump has also signed a trade agreement with the European Union (EU), under which a 15% fee will be levied on the EU -imported pharmaceutical products. According to a report by Moneycontrol, this tariff policy can also become a danger bell for Indian pharma companies, especially when America is the largest market for India’s medicines.
Heavy decline in public drug prices
India’s leading pharmaceutical companies Cipla and Dr. Reddy Laboratories (Dr. Reddys) have recorded sluggishness in the US sales in the June 2025 quarter. The major reason for this was the fall in the prices of a major anti -cancer revolution. Companies hope that this effect will be reduced to some extent due to the launch of new drugs and extending the existing products, but the risk of tariff is now getting bigger.
Tariff structure is more dangerous for India
European companies export expensive innovative medicines, so they may bear the weight of 15% tariff to some extent. But India’s companies make cheap public medicines, whose profits are already limited. If the tariff is also imposed on them, then the cost will increase and their competition in America will decrease. Right now America is the biggest importer of medicines from India. If tariffs are also implemented on India’s medicines, then the entire export model can stagger.
America has reached an agreement with many countries
After Japan and EU, the US has now also tied up with Britain, in which 10% tariff has been decided. Trump Administration is making this agreement in the name of reciprocal tariff, whose deadline has been fixed on 1 August. In such a situation, the coming weeks for the Pharma sector can prove to be very important. Although the date to implement these tariffs is still flexible and investigation on semiconductor and pharma imports is also going on, but duty on medicines from Europe is fixed. This indicates that India may also be included in this list soon.
Investors need to be vigilant
So far, Indian pharma companies, which have considered the American market the strongest and open, may get a big shock from Trump’s policies. If generations are charged, it will increase the cost of Indian companies, decrease profits and their performance in the stock market may be weak. The report of Financial Times states that the US tariffs on foreign goods during Trump’s tenure have reached the highest level after World War II. The pharma industry may lose billions of dollars due to tariffs on imported drugs in the US.