Nifty pharma slumps nearly 2 pc after Trump announces tariff plan on generic drug imports
Mumbai, July 22
India's pharmaceutical sector dipped notably on Wednesday after US President Donald Trump outlined a phased tariff plan on imported generic medicines, fuelling concerns over the long‑term outlook for drugmakers that rely heavily on US sales.
The Nifty Pharma index fell nearly 2 per cent in early trade, making it the worst‑performing sectoral index on the National Stock Exchange in early trade.
The Nifty Pharma index fell 1.85 per cent to 25,610 against Nifty, down 169 points or 0.70 per cent at 24,017.
Selling was broad‑based across the sector even as Gland Pharma led losses down 4.54 per cent. Aurobindo Pharma was down 2.89 per cent, while Glenmark was down 3 per cent and Zydus Lifesciences fell about 2.28 per cent.
Ajanta Pharma, Sun Pharma, Alkem Laboratories, Dr Reddy's Laboratories, Mankind Pharma and Divi's Laboratories also traded lower by 1.3 to 3 per cent. Among Nifty 50 constituents, Cipla, Sun Pharma and Dr Reddy's were among the top early losers, down about 1.29 to 1.95 per cent.
Trump has outlined a staggered tariff regime for generics, under which imports would remain duty‑free for two years from August 1, 2026, rise to 100 per cent from August 1, 2028, and then to 200 per cent a year later.
The policy aims to encourage pharmaceutical manufacturing to shift to the United States, Trump said on Truth Social, adding that tariffs on patented and branded medicines will remain unchanged.
The announcement triggered a selloff in Indian pharmaceutical companies, which are among the largest suppliers of affordable generic medicines to the US.
Some analysts noted that manufacturing generic medicines in the US would incur 25-30 per cent higher costs than in India and shifting production is hard to be accomplished in the two-year transition period allowed by Trump.
— IANS
Reader Comments
Honestly, I’m not surprised. We’ve seen this pattern before—Trump’s rhetoric vs reality. But this time the tariff timeline is clear and steep. What worries me is that companies like Sun Pharma and Dr. Reddy’s earn a huge chunk from US sales. If margins shrink, R&D spending could get cut. But on the flip side, maybe it’s time for India to diversify markets—focus on Europe, Africa, and Southeast Asia. We can’t rely on one buyer forever. 📉
Market is just panicking. The transition period is until 2028 before tariffs hit 100%—that’s almost four years from now. Indian pharma companies are nimble; they can set up manufacturing in the US through acquisitions or joint ventures. Look at what Biocon did with biosimilars—they built a plant in Malaysia. This might actually push our pharma sector to become more global and efficient. Short-term pain, long-term gain, I feel.
This is exactly the kind of protectionism that hurts global health. India supplies nearly 40% of generic drugs to the US—Trump’s policy will either make medicines unaffordable for millions of Americans or force them to switch to expensive branded ones. Meanwhile, Indian companies will lose pricing power but won’t vanish overnight. The real losers? Patients with chronic illnesses. Pharma should be above politics. 😔
I work in a pharma consulting firm, and this news has been buzzing all day. The 200% tariff by 2029 is insane, but analysts say the two-year duty-free window is actually a chance for Indian firms to fast-track FDA-approved plants in the US. Yes, costs will be higher, but companies like Aurobindo and Zydus already have US facilities. I think this is a temporary shock—the market will recover once clarity emerges. Let’s not write off pharma yet. 💊
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