US-India relations have entered yet another twist under President Donald Trump, a leader who proudly calls himself a dealmaker. This time, however, he seems to have played the biggest “no-deal” card with India. Earlier, Trump had issued an ultimatum to New Delhi: stop buying oil from Russia by August 8, or face heavy tariffs. The deadline passed, India continued its Russian oil imports, and Trump responded by announcing that no further trade negotiations with India would take place.
The real shock, however, came from Trump’s next statement — a consideration to impose a staggering 250% tariff on medicines imported from India. Such a move would represent the largest single-sector tariff in US history. This is no small matter for India, as the US is its biggest pharmaceutical market. In FY2024, India exported $8.7 billion worth of medicines to the US, roughly ₹76,130 crore, which accounted for more than 31% of India’s total pharmaceutical exports. Nearly half of all generic drugs used in the US originate from India.
If the US were to actually impose a 250% tariff, two direct consequences would follow. First, medicines in the US would become significantly more expensive. Second, several drugs could disappear from shelves altogether. To put this into perspective, if a generic drug from India currently costs $10 in the US and is hit with a 25% duty, the price could rise above $35. At a 250% tariff, prices would skyrocket severalfold, impacting America’s healthcare budget.
The American healthcare sector has already warned that such a measure would hurt US citizens the most. Higher tariffs could send Medicare costs, insurance premiums, and hospital bills soaring — at a time when the US is already burdened with $37 trillion in debt.
Meanwhile, the situation took an unexpected geopolitical turn with China’s entry. In a rare move, the Chinese ambassador to India openly criticized the US and expressed support for New Delhi. Calling America a “bully,” the ambassador said, “If you give a bully one inch, it will take a mile.” Experts believe this is part of China’s strategic game to project itself as a leader of the Global South. Regardless of China’s true intentions, the message was clear — India was not standing alone.
This raises the question: Would stopping medicine exports to the US really hurt India? The answer, many analysts say, is not significantly. The reason lies in India’s growing pharmaceutical partnership with Russia. Last year, Russian media outlet Sputnik reported that India was becoming Russia’s largest pharma supplier. Russia’s pharmaceutical market is valued at $45 billion, and if India secures a large share, it could be a multi-billion-dollar opportunity.
Russia already sees India as a reliable drug supplier. While India initially faced challenges in entering the Russian market, conditions have now shifted. According to the Indian Pharma Outlook, India could find new export opportunities in Russia’s Pienza region. In fact, India has already begun tapping into the $41 billion Russian pharma market, with several Indian companies shifting manufacturing operations to Russia. This means that if the US market closes, Indian production and sales are unlikely to stop — instead, they would pivot to Eastern markets where both prices and demand favor India.
Then came yet another twist. After floating the idea of a 250% tariff, Trump reversed course, temporarily excluding the pharma sector from the immediate tariff plan. This is seen as a clear acknowledgment from Washington that American dependence on Indian medicines is too high to ignore — and that such a move could end up hurting the US more than India.
The strategic reality is becoming clear: if America blocks Indian medicines, India could strengthen its foothold in Russia’s $45 billion pharma market, potentially even routing some drugs back to the US through other channels. The stakes are high, and the outcome could reshape global pharma trade routes.
The question now is simple: can the Indian pharmaceutical industry find a full-proof alternative to the US market? Many in India believe the answer is yes — and they are watching closely to see if Trump’s threats turn into action or fade into yet another geopolitical bluff.
Disclaimer:
This article is based on publicly available reports, expert opinions, and geopolitical developments. It is intended for informational purposes only and does not constitute financial, investment, or medical advice. Readers are advised to verify information independently before making any decisions.
