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On July 8, US President Donald Trump announced a 50 per cent tariff on copper imports and said that tariffs on pharmaceutical imports could reach as high as 200 per cent within a year. These new measures come as part of a broader tariff push targeting strategic sectors including semiconductors, critical minerals, and medicines. The announcement includes a fixed implementation deadline of August 1, 2025, after which no further extensions will be given.
For India, the new tariffs are significant due to its strong export presence in both copper and pharmaceuticals.
During a Cabinet meeting at the White House, the US President confirmed a new 50 per cent tariff on copper imports. He also stated that his administration would impose high tariffs on imported pharmaceuticals after allowing a grace period of approximately one to one-and-a-half years.
“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. They’re going to be tariffed at a very, very high rate—like 200 per cent," Trump said.
The US has already imposed tariffs on other materials such as steel and aluminium. The copper tariff is part of a broader set of targeted import levies. Trump also reiterated that the August 1 deadline for these tariffs will not be extended, placing pressure on affected trading partners to make adjustments or secure exemptions beforehand.
India exported approximately $2 billion worth of copper and copper products globally in FY 2024-25. Of this, $360 million, around 17 per cent, went to the United States. The US is India’s third-largest export destination for copper, following Saudi Arabia and China.
While the tariff could reduce Indian copper exports to the US, the overall impact is expected to be moderate due to diversified demand. Copper is classified as a critical mineral and is used widely in sectors such as construction, renewable energy, electric vehicles, and electronics. Domestic consumption in India is also expected to grow, which may offset any reduction in US demand.
The pharmaceutical sector faces a potentially more serious impact. The US is India’s largest pharmaceutical export destination, accounting for $9.8 billion in exports in FY25. This is a 21 per cent increase from the previous year’s $8.1 billion, and it represents 40 per cent of India’s total pharma exports.
Indian pharmaceutical exports to the US are primarily composed of low-cost generic medicines. These products play a significant role in the US healthcare system, where generics account for over 90 per cent of prescriptions filled.
A 200 per cent tariff could make these products unaffordable and uncompetitive in the US market. Due to tight pricing structures in the generics industry, exporters may not be able to absorb the additional cost, potentially leading to withdrawal from the market. Smaller firms are likely to be most affected.
Stock market reactions have already reflected concern. Following Trump’s statement, Indian pharma stocks saw a dip, with shares of several major firms declining by 2 to 4 per cent in intraday trading.
The potential impact of the tariffs could hinge on the outcome of trade negotiations between India and the United States. Trump has indicated that the two countries are nearing a deal.
“Now, we’ve made a deal with the United Kingdom, we’ve made a deal with China… We’re close to making a deal with India. Others we met with and we don’t think we’re going to be able to make a deal, so we just send them a letter. If you want to play ball, this is what you have to pay," Trump said on Monday.
These remarks came as the US began dispatching formal tariff letters to various countries. The first batch of letters, signed by Trump, was sent to Bangladesh, Cambodia, Japan, South Korea, South Africa, and several other nations. These letters outline specific product categories and tariff rates and are part of the pre-August 1 enforcement mechanism.
India has not yet received such a letter, which may reflect the advanced status of its ongoing trade discussions with Washington. If an agreement is reached before the deadline, it may include exemptions or phased rollouts for sensitive sectors such as pharmaceuticals and copper.
During the same Cabinet meeting, Trump reiterated his earlier statement that imports from BRICS nations could face an across-the-board 10 per cent tariff. He described the BRICS grouping as “not a serious one" but acknowledged its efforts to challenge the dominance of the US dollar.
India is a member of the BRICS, along with Brazil, Russia, China, and South Africa. While no specific BRICS-related tariff has been imposed on India so far, broader geopolitical positioning may influence bilateral decisions.
The immediate outlook for Indian exporters will depend on the outcome of the India–US trade talks. If a deal is concluded before August 1, Indian copper and pharmaceutical exports may be spared from the new tariffs, or at least face a staggered implementation. On the other hand, failure to reach an agreement would mean the full application of the proposed duties.
For copper, the impact is expected to be limited. Exporters could shift focus to existing markets like Saudi Arabia and China or meet growing demand within India. In the pharmaceutical sector, the risk is more severe. While larger firms may explore relocating some manufacturing to the United States to mitigate tariff exposure, such transitions involve complex regulatory processes and high capital investment. Smaller exporters, which form a large part of India’s generics industry, may not be able to adapt as quickly.
The Indian government is expected to maintain high-level engagement with Washington in the weeks ahead. Industry associations are also likely to seek relief mechanisms such as delayed enforcement or exemptions for essential medicines. At the same time, export diversification efforts targeting Latin America, Southeast Asia, and Africa may gain further momentum as part of India’s long-term risk mitigation strategy.
Source: News18
