Because of the importance of India’s pharmaceuticals to US healthcare, those exports will get a reprieve from President Donald Trump’s reciprocal tariffs, according to the White House.

The US is the largest importer of pharmaceuticals from India, bringing in products in the category worth $8.73 billion during the 2024 fiscal year, according to statistics cited by the India Brand Equity Foundation (IBEF).

IBEF said 31.5 per cent of India’s pharmaceutical exports went to the US.

The White House factsheet issued on Wednesday after Trump’s announcement of 26 per cent reciprocal tariffs on imports from India said that pharmaceuticals were exempt.

Indian drugs, especially the generics, help hold down the costs of the US healthcare system, which is already one of the most expensive in the world.

Previewing the likely outcomes of the tariffs, ING Bank had warned that “in the absence of a deal with India, we think Trump’s tariffs will mostly drive up drug prices for US consumers” because of the wide use of generics for which India is the major supplier.

Given the importance of Indian pharmaceuticals, President Trump has exempted that category even without a deal.

IQVIA, a healthcare data and analytics company, said that four out of ten prescriptions filled in the US in 2022 were from Indian companies.

“Out of the top 10 therapy areas by prescription volume, Indian companies supplied more than half of the prescriptions for five: hypertension, mental health, lipid regulators, nervous system disorders, and anti-ulcerants”, it said.

IQVIA estimated that by using generics from India, rather than high-priced branded products, the US healthcare system saved $219 billion in 2022 and a total of $1.3 trillion between 2013 and 2022.

These savings dwarf the dollar values of the pharmaceutical imports from India, and 26 per cent tariffs on them would have had a domino effect across the healthcare system, especially Medicare, the government healthcare insurance system for seniors, that is already facing challenges to long-rage viability.

The White House factsheet said that copper, semiconductors, lumber, bullion, energy and certain minerals that are not available in the US are also exempt from the reciprocal tariffs.