50% on copper, 200% on pharmaceuticals: How Trump’s tariffs may hit India where it hurts | Explained

Prime Minister Narendra Modi and US President Donald Trump - File Photo

In a move that could upend global supply chains and rattle key export-driven economies like India, US President Donald Trump on Tuesday announced a steep 50 per cent tariff on copper imports and warned of a massive 200 per cent tariff on pharmaceutical products, to be enforced after a one-year grace period. The announcement marks a sharp escalation in Trump’s protectionist trade agenda, which has increasingly targeted specific sectors with little warning.

For India – the world’s largest supplier of generic medicines to the United States and an emerging player in copper-based manufacturing – the implications are significant. While copper tariffs could disrupt industrial supply chains, the looming pharma duties strike at the heart of a sector that generates billions in US revenue for Indian drugmakers. With little time to adapt and rising uncertainty about the future of India-US trade ties, Indian exporters now face a difficult recalibration.

What’s the announcement

Trump declared a 50 per cent tariff on copper imports, while warning of a steep 200 per cent tariff on pharmaceutical products, with implementation deferred by at least a year. This is part of his administration’s aggressive sector-by-sector trade agenda that has already targeted steel, aluminium, autos, and more recently, copper and pharma.

“We’re going to give people about a year, a year and a half to come in, and after that, they’re going to be tariffed,” Trump said.

“They’re going to be tariffed at a very, very high rate, like 200 percent,” he added.

This move follows an expanding probe into multiple sectors, including lumber, semiconductors, and critical minerals.

Why India should pay attention

India, a key global player in both copper and pharmaceutical exports, faces serious implications on both fronts. These tariffs could deal a blow to Indian firms targeting the US market and expose deeper vulnerabilities in bilateral trade dynamics.

Pharmaceuticals: India’s golden goose under threat

India, often dubbed the “pharmacy of the world,” counts the United States as its biggest market for pharmaceutical exports. In FY 2023-24 alone, India shipped over $8 billion worth of pharma products to the US. In FY25, US again emerged as India’s largest pharmaceutical export destination, accounting for $9.8 billion in exports. However, this vital trade link is now at serious risk. If Trump moves ahead with his plan to impose 200 per cent tariffs on imported drugs, after a one-year grace period, India’s generics industry could suffer a major blow.

These tariffs would drastically undermine the price advantage Indian drug makers currently enjoy in the US, especially in cost-sensitive markets like federal health schemes and among low-income patients. As a result, Indian firms may lose key contracts and tenders, while American pharma companies gain market share shielded by protectionist walls.

Several major Indian companies, which depend heavily on the US market, are particularly exposed. While many have set up or plan to expand manufacturing in the US, Trump’s proposed relocation window of “a year, maybe a year and a half” may not be long enough to adjust.

After Trump’s statement, Indian pharmaceutical stocks slipped, with shares of several leading companies falling between 2 per cent and 4 per cent during intraday trade.

Copper: India’s supply chain and investments in jeopardy

In FY 2024-25, India exported around $2 billion worth of copper and copper products worldwide, with the United States accounting for $360 million – roughly 17% of the total. The US ranks as India’s third-largest copper export market, after Saudi Arabia and China. Many Indian industries, like electrical equipment, transformers, wiring, and EV components, depend on copper and supply products to US-based companies. If American buyers start sourcing domestically to avoid tariffs, Indian firms could lose orders.

Copper is also crucial for sectors like renewable energy, EVs, and telecom – areas where Indian companies are actively expanding in the US. A global shake-up in copper supply chains could drive up prices, raising manufacturing costs in India. If the US starts stockpiling copper or boosting its own mining, that could squeeze global availability and hurt Indian industry even further.