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Biman Mukherji

A mood of uncertainty hangs over India’s pharmaceutical sector as US President Donald Trump’s latest tariff threats have unsettled investors and policymakers alike.
But behind closed doors, a tentative deal on digital trade and quiet backchannel negotiations are giving hope to markets and manufacturers in both of the world’s most populous democracies.
“There appears to be recognition that the US needs to lower the rhetoric,” said foreign policy analyst Vivek Mishra, deputy director of the Observer Research Foundation think tank’s strategic studies programme.
“With him, you never know because in one instance he may embrace you and on the other throw you away.”

Trump’s announcement late last month of a 100 per cent tariff on imported branded and patented pharmaceuticals rattled Indian markets, triggering a sharp decline in pharmaceutical stocks.
Though the lion’s share of Indian exports to the United States are generic medicines rather than originals, the ambiguity of the move left investors uneasy, unsure whether generics might soon be targeted as well.
“As an investor, I would be very cagey about it. It is certainly a pressure point that he may use against India,” Mishra said, reflecting the anxiety now felt in a sector that relies on the US for nearly 40 per cent of its outbound shipments.
Until recently, pharmaceuticals had been shielded from Trump’s decision in August to impose a sweeping 50 per cent tariff on Indian goods, ostensibly in retaliation for India’s own barriers to trade and purchases of Russian oil.

Damage limitation
Generic drugs account for around 90 per cent of US pharmaceutical consumption by volume, but capture only a 10th of the market’s value, according to UK-based financial forecaster Capital Economics.
The targeting of “branded or patented” products, as Trump specified, may not directly ensnare most Indian exports but the distinction is not always clear, according to Biswajit Dhar, a professor of economics and planning at New Delhi’s Council for Social Development.
Many Indian companies sell “branded generics”, he said, leaving them exposed to regulatory risk.
The new layer of tariffs “should not come as a surprise”, influential daily newspaper the Indian Express said in an editorial on Tuesday.

“Trump stays determined to bring manufacturing back to the US as well as to bridge the trade deficit with all countries,” it said, urging Indian policymakers to open up new markets, reform the country’s bureaucracy to make businesses more efficient and “conclude a trade deal as quickly as possible to limit the damage”.
Though Indian Commerce Minister Piyush Goyal’s recent talks in Washington with US Trade Representative Jamieson Greer failed to achieve a breakthrough on a pact, analysts point to incremental progress.
The two sides have reportedly agreed not to require disclosure of proprietary technology, such as source code, to facilitate digital trade, a long-standing demand of American telecoms and electronics giants.
“It is a positive sign that new areas are being discussed,” Mishra said. “India is trying to identify areas where it can take a hit and offer some concessions to the US.”
India is trying to identify areas where it can take a hit and offer some concessions to the US
Vivek Mishra, foreign policy analyst
The development could open doors for US tech firms such as Cisco, Ciena and HPE who have long bristled at India’s data localisation and certification requirements, viewed in Washington as non-tariff barriers.
The US is India’s largest trading partner, with bilateral trade on track to reach nearly US$132 billion this financial year – around 18 per cent of India’s total exports and 2.2 per cent of its gross domestic product. Pharmaceuticals, mobile phones, gems, jewellery and garments dominate India’s export basket.
“From India’s perspective, until recently the view has been that US demands are impossible,” Mishra said.
For example, he said the opening up of India’s agriculture sector to US imports was likely to remain off the table as this was a demand Delhi had long resisted, wary of a backlash from its millions of smallholder farmers.

Still, India and the US appear to be inching forward towards an agreement, one cautious step and concession at a time.
“Pharma and digital services are two knotty areas to sort out alongside farm imports or exports. Resolving these issues step by step allows both sides to approach an overall trade deal with more confidence,” said Uday Chandra, a political scientist at Georgetown University in Qatar.
“A trade deal may emerge by the end of the year, reducing anxiety in the market and enabling everyone to adapt gradually to new economic realities, including higher US prices. The ultimate losses will be borne by the US consumer, not Indian firms or consumers. Their interests and those of the US government may need reconciling.”


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Trump’s 100% tariff threat has India’s drug industry on edge

Generic medicines seen at a pharmacy in Kolkata. Photo: AFP

A man buys medicines from a pharmacy in Bengaluru, India, on September 22. Photo: AFP

Supporters of India’s main opposition party burn an effigy of US President Donald Trump and Indian Prime Minister Narendra Modi at a protest against tariffs in August. Photo: Zuma Press Wire/dpa

A pharmacist checks the weight of paracetamol tablets at a pharmaceutical company on the outskirts of Ahmedabad, India. Photo: Reuters

Farmers thresh harvested rice in a field on the outskirts of Srinagar, Indian controlled Kashmir, on September 28. Photo: AP

Trump’s 100% tariff threat alarms India’s film industry over diaspora market

Fans dance inside a cinema during the screening of Indian actor Rajinikanth’s new Tamil-language movie “Coolie” on the first day of its release in Mumbai on August 14. Photo: AFP

People wait in line to enter a cinema to watch the Bollywood movie “The Kashmir Files” in Mumbai in 2022. Photo: Reuters

A man plays the Oscar-winning song “Naatu Naatu” from the Indian movie “RRR” at a TV showroom in Chennai. Photo: AFP

Is India buckling under US pressure on Russian oil purchase?

Russian President Vladimir Putin hugs Indian Prime Minister Narendra Modi ahead of the Shanghai Cooperation Organization summit in Tianjin last month. Photo: AP

An oil terminal located about 110 km from St. Petersburg, Russia. India has been buying discounted Russian oil despite Washington’s embargo against Moscow. Photo: Reuters

US President Donald Trump meets with Indian Prime Minister Narendra Modi at the White House in Washington, in February. Photo: Reuters

Trump’s 50% tariff sows ‘total mistrust’ between US and India

Employees work at a buttermilk packaging plant in Gandhinagar, India, on August 7. US President Donald Trump has abruptly doubled tariffs on Indian goods. Photo: AP

US President Donald Trump and India’s Prime Minister Narendra Modi. India has vowed to take “appropriate steps to protect national interest” in response to Trump’s tariffs. Photo: AFP

Workers stitch dresses at a garment manufacturing unit in Noida on Thursday. India’s macroeconomic losses may be felt more keenly in politically sensitive, labour-intensive sectors such as jewellery and textiles, analysts say. Photo: Reuters

An oil tanker train passes near a refinery in Guwahati. Russian oil makes up about 35 per cent of India’s imports. Photo: AFP

A mobile crane carries a container at Deendayal Port in Kandla, in the western state of Gujarat in April. Bilateral trade between India and Russia reached a record US$68.7 billion in financial year 2024-25. Photo: Reuters

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While the tariff announcement on patented drugs sent Indian pharma stocks tumbling, a tentative digital trade deal could show a path forward


While the tariff announcement on patented drugs sent Indian pharma stocks tumbling, a tentative digital trade deal could show a path forward.


Trump’s 100% tariff threat has India’s drug industry on edge

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}While the tariff announcement on patented drugs sent Indian pharma stocks tumbling, a tentative digital trade deal could show a path forward

While the tariff announcement on patented drugs sent Indian pharma stocks tumbling, a tentative digital trade deal could show a path forward