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India imposes a 10% tariff on pharmaceutical imports from the US, while the US does not levy any tariffs on imports of Indian products
Pharma Stocks In Focus
Pharma Stocks In Focus: Shares of Indian pharmaceutical companies with notable exposure to the US market, including Gland Pharma Ltd., Aurobindo Pharma Ltd., Dr. Reddy’s Laboratories Ltd., and Sun Pharma Ltd., surged by up to 15% on Thursday, April 3, following US President Donald Trump’s failure to announce any specific reciprocal tariffs targeting the pharma sector.
The Nifty Pharma index saw a significant boost, rising as much as 4.5% in early trading on Thursday, marking its largest single-day gain since September 2020.
Trump unveiled reciprocal tariffs for over 60 countries, including India, the European Union, China, and Vietnam. However, it’s important to note that sector-specific tariffs were not included in the White House’s April 2 announcements. Although the President had previously hinted at potential levies on pharmaceuticals, semiconductors, and other sectors, he did impose a 25% tariff on imports of automobiles and auto components into the US.
Currently, India imposes a 10% tariff on pharmaceutical imports from the US, while the US does not levy any tariffs on imports of Indian pharmaceutical products.
Several Indian pharmaceutical companies derive a significant portion of their revenue from the US market.
Brokerage firm Citi noted in its report that it remains unclear whether this situation is a short-term or medium-term arrangement. However, Citi views this as a positive development for the sector if pharmaceutical companies are not targeted by tariffs. “This aligns with our view that the probability of tariffs on Indian pharma is low,” Citi stated.
CLSA also observed that the market had anticipated a 10% tariff on pharmaceutical exports to the US. “While the exemption may be temporary, most US-focused Indian pharma stocks—down 12% to 17% year-to-date—have already priced in a 10% tariff and are likely to recover,” the brokerage noted.
Although the Nifty Pharma index has gained 5.5% over the last month, it is still down 10.7% on a year-to-date basis. Pharma stocks saw some recovery recently as reports suggested that sector-specific tariffs are not on Trump’s immediate agenda for reciprocal tariffs.
Shares of Gland Pharma and Aurobindo Pharma have fallen by 15% so far in 2025. However, Aurobindo Pharma has seen a 9% increase over the past month.
Sun Pharma’s stock has risen 8% in the last month, reducing its year-to-date losses to 9.3%.
