A recent report by SBI Research has described the US as a “wrong policy decision” by the US to impose 25% tariff on Indian goods and an additional fine, which may have an opposite effect on American consumers. Also, India has been urged to protect its farmers. The tariffs declared on July 30, 2025 will be effective from August 7 and their target is India’s $ 43 billion trade surplus with the US, operated by areas such as pharmaceuticals, electronics and gems, which have a 49% share in India’s US exports.

The global leading in generic drugs India, about 47% of the US drug needs, will save the US healthcare system in 2022 alone to save $ 408 billion. The report warns that tariffs may increase the prices of drugs, which may increase the cost of US healthcare, which is already eating 17.6% of the GDP, with medicines and medicades costing 36%. It will take 3-5 years to move the production elsewhere, which will lead to a decrease and high cost risk for American patients.

The report also emphasized India’s agricultural flexibility, especially in dairy, where production rose from 155.5 million tonnes to 36% in 2015 to 211.7 million tonnes in 2024, beyond the European Union (165.9 MT) and the US (102.5 MT). It urges India to protect farmers from those global groups. The report suggested that India reduce duty on American imports such as automobiles (24.1%) to negotiate exemption. Indian pharmaceutical companies like Sun Pharma can put cost burden on American consumers, while American consumers may face an increase in medical bills, which can weaken the dollar and increase inflation.