US President Donald Trump has outlined a phased tariff regime on imported generic drugs that will escalate from zero percent to 200 percent by 2028.
The policy, designed to compel pharmaceutical manufacturers to shift production to the United States, represents a severe long-term headwind for India's export-oriented pharma sector, which supplies a significant share of the US generic market.
Indian pharmaceutical equities faced sharp selling pressure on Wednesday following the announcement.
The Nifty Pharma index dropped nearly 2 percent as investors priced in the potential margin compression and supply chain disruption.
The market reaction underscores the vulnerability of Indian drugmakers to US trade policy, with smaller generic specialists likely facing the steepest challenges in absorbing the cost increases.
The tariff structure begins at zero percent, providing a transition period before the rates climb to 100 percent and eventually 200 percent.