 "Trump’s 200% pharma and 50% copper tariffs: How badly could they hit Indian exports?")
US President Donald Trump has announced a new wave of protectionist trade measures that could significantly affect Indian exports, particularly in pharmaceuticals and copper.
With a 50 per cent tariff on all copper imports and a 200 per cent duty on pharmaceutical products under consideration, Indian exporters are facing uncertainty over access to the United States — one of their most important markets.
These measures are part of Trump’s broader tariff expansion during his second term, with several already in place on goods like cars, steel and aluminium.
If the new tariffs take effect without exemptions or a new agreement in place, Indian industries could face disruptions across key sectors.
US slaps 50% copper import tariff: Why India may be partially insulated
Trump confirmed the imposition of a 50 per cent tariff on all copper imported into the United States, stating during a Tuesday Cabinet meeting, “Today we’re doing copper,” and added that he believed the rate would be set at 50 per cent.
The decision follows a Section 232 investigation initiated in February, under provisions allowing tariff imposition for national security reasons.
The US imported approximately $17 billion worth of copper in 2024, according to US Commerce Department data. Chile accounted for $6 billion of this, making it the largest source.
Copper is vital for several sectors, including construction, electrical equipment, machinery, renewable energy and the automotive industry. Tariffs on copper are expected to raise costs for US manufacturers and ripple through supply chains.
Copper futures on the New York market responded sharply, rising as much as 15 per cent to a record high of $5.68 per pound. The year-to-date price surge stands at 38 per cent, largely attributed to firms stockpiling inventories in anticipation of tariff-led cost hikes.
India, which exported $2 billion worth of copper and related products in FY 2024–25, sent about $360 million — or 17 per cent — of that to the US. The United States ranks as India’s third-largest market for copper, trailing only Saudi Arabia (26 per cent) and China (18 per cent).
Despite the immediate market reaction, Indian exporters may not face a substantial downturn from the copper levy.
Given the classification of copper as a “critical mineral” with broad domestic and international applications, Indian producers are expected to redirect output to other large markets or tap into rising internal demand from sectors such as power, EVs, and infrastructure.
A 200% blow? Indian pharma faces huge threat
Of much greater concern for India is the pharmaceutical tariff Trump has announced. Though a specific implementation date has not been given, the US president indicated that the 200 per cent duty on imported drugs could be introduced soon, albeit with a lead time to allow affected countries to prepare.
“If they have to bring the pharmaceuticals into the country… they’re going to be tariffed at a very, very high rate, like 200 per cent. We’ll give them a certain period of time to get their act together,” Trump warned, while also stating: “We’re going to be announcing pharmaceuticals, chips, and a couple of other things — you know, big ones.”
The implications for India’s pharmaceutical sector could be severe. The United States is India’s top export destination for pharmaceutical products, which reached $9.8 billion in FY25 — a 21 per cent jump from $8.1 billion in FY24. This accounts for approximately 40 per cent of India’s total drug exports.
India’s pharmaceutical exports are dominated by low-cost generic medicines, which play a vital role in the US healthcare system. Generics constitute more than 90 per cent of all prescriptions filled in the US, making Indian drugs essential for affordable care.
However, the pricing model in this segment leaves little room for absorbing additional costs. A steep tariff could render Indian generics unviable in the US market, forcing manufacturers to either raise prices or withdraw altogether.
The impact was already visible in stock market performance. Following Trump’s announcement, several major Indian pharmaceutical firms saw their share prices drop between 2 per cent and 4 per cent during intraday trading.
Smaller firms in particular, which make up a large part of India’s generic medicine export base, may lack the financial and regulatory capacity to adapt quickly.
Larger players might explore relocating some production to the United States, but this would involve significant capital investment and time-consuming FDA compliance processes.
A potential trade deal before August 1
The timing of these proposed tariffs comes as India and the United States are in the process of negotiating a mini trade agreement.
Sector-specific tariffs — including those on copper and pharmaceuticals — are expected to be part of this framework. If both sides finalise the deal before the August 1 deadline, Indian exporters may escape immediate fallout or see the tariffs implemented in a phased manner.
On Monday, Trump extended the pause on previously imposed “reciprocal” tariffs until August 1. Originally scheduled to resume earlier, these tariffs now await new negotiated rates with partner countries.
The Trump administration has been issuing formal letters to leaders around the world, laying out the potential new tariff rates they could face unless alternative arrangements are agreed upon.
Trump’s rationale behind these tariffs rests on bolstering domestic pharmaceutical manufacturing, a theme he has highlighted since his return to office in January.
Several US-based expansions by drugmakers have been announced since then, though some of these projects were already underway before his re-election.
How India may adapt to US protectionism
India is expected to continue engaging the US administration at the highest diplomatic levels to seek relief mechanisms such as delayed enforcement, staggered rollouts or exclusions for essential drugs.
Industry bodies are likely to press for sectoral exemptions or ask for a reassessment of critical dependencies in the global drug supply chain.
On a strategic level, India could accelerate its ongoing diversification of export destinations. Efforts to strengthen pharmaceutical and mineral exports to emerging markets in Latin America, Southeast Asia and Africa may gain momentum, serving as a buffer against future US protectionist shocks.
Domestically, the country’s rising consumption of copper — driven by industrial growth and renewable energy targets — offers copper exporters a fallback.
For pharmaceuticals, however, the challenges remain steeper due to high US dependency and regulatory complexity in alternative markets.
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