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Indian Pharma Stocks Plummet as US Imposes 100% Tariff on Branded and Patented Drugs

Strategic Insights

— 1 min read

India's pharmaceutical stocks slumped on Friday, with some large companies like Sun Pharma, Dr Reddy's and Lupin falling up to 7% in what is seen as a knee-jerk reaction to US President Donald Trump's statement imposing a 100% tariff on imported branded and patented drugs without a US-based manufacturing facility. The tariff, effective October 1, primarily targets companies lacking operational or under-construction manufacturing facilities in the US. However, industry executives and analysts believe India's exports of medicines to the US, predominantly generics, may not face any major hindrance due to the latest move by Trump.

Key Takeaways:

  • The US tariff on branded and patented drugs is unlikely to have an immediate impact on Indian exports, as the bulk of India's contribution lies in simple generics.
  • Most large Indian companies already operate US manufacturing or repackaging units and are exploring further acquisitions.
  • The social media post by POTUS refers to patented and branded products supplied to the US and is not applicable to generic medicines.
  • Indian pharmaceutical exports to the US, mainly generics and non-patented biosimilars, are valued at $10.51 billion.
  • Indian drugmakers, including Sun Pharma, Dr. Reddy's Labs, Zydus Lifesciences, Cipla, Lupin, Biocon, and Aurobindo Pharma, dominate exports to the US.
  • The Nifty Pharma index has fallen 8.14% so far in 2025 and 8.55% over the past one year, significantly underperforming the benchmark Nifty.
  • Fresh tariffs could be levied on generics, which make up most of Indian exports, causing market jitters.
  • Indian pharma stocks fell up to 7% on Friday, with Laurus Labs leading the losers, in what is seen as a knee-jerk reaction to the US tariff on branded and patented drugs.

Statistics:

  • India's pharmaceutical exports to the US are valued at $10.51 billion in FY25, accounting for 34.5% of its total pharmaceutical exports.
  • The Nifty Pharma index has declined 8.14% so far in 2025 and 8.55% over the past one year.
  • The Nifty index has fallen 0.95% on the day while the Nifty Pharma index has slumped 2.14%.
  • Laurus Labs, Biocon, Zydus Lifesciences, Divi's Laboratories, and Glenmark Pharma led the losers, with stocks falling 7.15%, 4.78%, 4.35%, 3.76%, and 2.89%, respectively.

Sources:

  • Indian Express Online Media Services Pvt. Ltd.
  • Contify.com

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