Pharma Stocks Fall Up To 4% After Trump Imposes 100% Tariff On Branded & Patented Drugs | Markets News

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Pharma Stocks In India: Sun Pharmaceutical Industries, Lupin, and other Indian pharma stocks were trading with deep cuts after US President Donald Trump announced a steep 100% tariff on branded and patented pharmaceutical imports starting October 1, 2025—unless the company is building a manufacturing facility in the United States.

In a post on Truth Social, Trump clarified that the tariffs would not apply to pharmaceutical products if the company has already begun construction on a U.S. manufacturing plant.

“Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. ‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction.’ There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started,” Trump wrote.

Analysts warn that the move could weigh on Indian pharma exporters, as the U.S. accounts for about 35% of India’s pharma exports, valued at $10 billion in FY25, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil).

“While the tariff primarily targets branded drugs, there is ambiguity over whether complex generics and specialty medicines might also be affected, which could pose challenges for companies relying heavily on U.S. exports. However, firms with manufacturing plants already under construction in the U.S. will be exempt, offering an opportunity to mitigate tariff exposure,” said Maitri Sheth, Pharma & Healthcare Analyst at Choice Institutional Equities.

At present, generics, OTC drugs, biologics, and specialty medicines remain excluded from the new tariff as they fall under a separate Section 232 investigation by the U.S. Commerce Department.

India remains the largest supplier of generics to the U.S., with exports worth $3.7 billion in the first half of 2025 alone.

“Direct near-term impact on Indian pharma is limited, as the tariffs target branded/patented drugs largely dominated by global innovators. Uncertainty remains around whether complex/specialty generics—an area of increasing focus for Indian players—may come under scrutiny in the future. The U.S. remains the largest market for Indian pharma; hence, any expansion of tariff scope could materially alter the growth/export trajectory,” analysts at Ashika Institutional Research noted.

They added that while headline risk is currently high, operational risk is low for Indian exporters: “We should watch for any policy spillover into specialty/complex generics, which could be the next flashpoint. That said, several aspects of the announcement remain ambiguous and further clarity from regulators can be expected in the coming weeks.”

Meanwhile, the Nifty Pharma index has slipped 2% over the past month, with stocks such as Cipla, Divi’s Laboratories, and Ajanta Pharma declining between 5% and 6% during this period.