COVER STORY
In late August, when U. S. President Donald Trump doubled tariffs on Indian imports to a punishing 50 %, the global trade community braced for impact. The move that doubled the already painful 25 % rate levied just weeks earlier, framed as a penalty for India’ s continued energy trade with Russia, sent shockwaves through apparel exporters in Tirupur, diamond polishers in Surat, and information technology service hubs in Bengaluru. But perhaps the most consequential, if less immediately visible, tremors were felt in India’ s biotech and healthcare ecosystem.
Even though pharmaceuticals were technically exempted in the immediate list, the language from the White House was unambiguous: medicines and biotech products could soon be next.“ We’ re not ruling anything out,” a U. S. trade official told reporters at the time. The uncertainty alone was enough to send stock indices tumbling and executives scrambling.
For decades, India has been described as“ the pharmacy of the world,” supplying nearly 40 % of generics consumed in the United States and exporting active pharmaceutical ingredients( APIs), vaccines, diagnostics, and contract research services across continents. A tariff shock aimed at this sector is not just a disruption in trade figures; it is a jolt to the veins of global healthcare. Even though pharmaceuticals were temporarily exempted from the first
round of Trump’ s tariff escalation, the president’ s repeated public threats to extend duties to generic drugs and APIs have already set off alarm bells in Hyderabad’ s R & D parks, Ahmedabad’ s manufacturing belts, and Wall Street’ s healthcare boardrooms.
A fast shock and a slow burn
The mechanics were dramatic and swift. After a July tariff of 25 % on many Indian goods, the White House followed with an additional 25 % specifically aimed at Indian imports— a punitive step tied to India’ s energy purchases from Russia— taking the headline rate to 50 %. For many Indian exporters, the immediate reaction was to“ front-load” shipments in August to beat the deadline; for others the calculus was more painful: either absorb the extra cost, attempt to renegotiate prices with alreadysqueezed buyers, or hunt for alternate markets in Europe, Africa and Asia.
Biotech and pharma, however, live in a different trade logic. The U. S. has— at least for now— kept pharmaceuticals off the immediate hit list. That temporary reprieve has given some breathing room, but it came with a menacing caveat: public statements by U. S. officials and the president about the possibility of imposing pharmaspecific tariffs later— even floated at punitive levels— have left drugmakers and hospitals uneasy.
Secretary General of Indian Pharmaceutical Alliance, Sudarshan
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BioVoiceNews | September 2025