Mumbai: Uncertainty looms large on India’s trade relations with the US, with copper and pharmaceutical industries likely to bear the brunt as US President Donald Trump issues a fresh salvo of threats as a move to protect American interests.
The Trump administration plans to impose a 50% tariff on copper and up to 200% on pharmaceutical imports, with an 18-month grace period for the drug sector, marking a sharp escalation in America’s protectionist trade strategy, which could disrupt two of India’s vital export verticals.
India’s copper exports to the U.S. stood at around $360 million in FY 2024–25, accounting for roughly 17% of its total outbound copper trade. While the figures aren’t insignificant, the Indian government and industry leaders believe the impact may be limited.
Domestic consumption remains strong, and key producers like Hindalco have minimal exposure to U.S. demand. Commerce officials suggest that the sector is unlikely to suffer a major blow, though a short-term rush to ship before tariffs kick in could tighten global availability and marginally raise copper prices, especially for infrastructure and clean energy projects.
The situation is far more serious for the pharmaceutical sector, which ships nearly $10 billion worth of generic drugs to the U.S. annually, making up around 40% of India’s total pharma exports. With Indian generics playing a crucial role in the U.S. healthcare system, the proposed tariff could dramatically inflate drug costs for American consumers and undermine India’s competitive edge in the world’s most lucrative pharma market.
Leading Indian companies like Dr. Reddy’s, Cipla, and Sun Pharma have already begun exploring or expanding U.S.-based manufacturing to hedge against such disruptions. However, these moves face high regulatory hurdles and demand significant investment, making them long-term buffers rather than immediate solutions.
While Indian markets have reacted with caution, pharma stocks dipped briefly, investors are treating the announcement as a potential negotiating tactic. Still, the uncertainty has cast a shadow over what has been a relatively strong post-pandemic export recovery for India.
To manage the fallout, New Delhi will need to move swiftly. Trade diplomacy must take center stage, potentially leveraging bilateral channels to seek exemptions. At the same time, Indian exporters need to diversify their market base, with renewed focus on the EU, Africa, Latin America, and Southeast Asia. Additionally, policy incentives for domestic capacity expansion and overseas investment will be critical.
With copper cushioned by internal demand and pharma exposed to external risk, India faces a mixed challenge. But as Trump doubles down on tariff-led trade policy, India must recalibrate its export playbook before politics turns into policy.
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