Section 232 generic drug tariffs: don‘t expect panic: Quick Note

Research evidence excerpt

Section 232 generic drug tariffs: don‘t expect panic: Quick Note

Global Markets Research

22 July 2026India Pharmaceuticals

EQUITY: PHARMACEUTICALS

Section 232 generic drug tariffs: don’t expect panic Research Analysts

India Pharmaceuticals

Saion Mukherjee - NFASLQuick Note saion.mukherjee@nomura.com

+91 22 403 74184

Kushal Chovatia - NFASL

Event: Trump announces generic drug tariffs from August 2028 kushal.chovatia@nomura.com

On 21 July 2026, US President Donald Trump announced via Truth Social that all +91 22 403 74013

imported generic drugs will retain a 0% US tariff for two years from 1 August 2026,

followed by a 100% tariff for one year (August 2028-August 2029) and 200% thereafter.

The tariff is planned for implementation under Section 232, with the explicit objective of

forcing reshoring of generic drug manufacturing to the United States.

Market reaction: Somewhat negative; but don’t expect any material correction

The announcement led to a minor correction in India’s generic pharmaceutical stocks.

However, we are not overtly concerned about this development and believe market

sentiment on generic pharma will not materially change as a result. During the initial tariff

scare in early 2025, generic pharma stocks corrected 15-20% (January-March 2025) (Fig.

1). We do not expect a negative reaction of similar magnitude this time, given no

immediate tariffs, prospects of an India-US trade deal and potential changes in the tariff

structure.

Key monitorable – India-US trade deal

In our view, the most important event to watch is the progress of a bilateral trade deal

between India and the US. A tariff structure negotiated under such a deal may supersede

the Section 232 framework.

There is precedent for this. In April 2025, following the Section 232 investigation, patented