India News

Indian Pharma Sector Exempt from US Tariffs

Indian Pharma Sector Exempt from US Tariffs

Indian pharmaceutical companies got a major relief as the US excluded pharma imports from the new reciprocal tariffs announced by President Donald Trump. While most sectors face a 10% baseline tariff and India sees a 26% duty, the White House confirmed that pharmaceuticals, along with copper, semiconductors, and lumber, would be exempt. Experts had predicted this move, noting that imposing tariffs on generic drugs would increase medicine prices for American consumers.

The Nifty Pharma index responded positively, jumping 4.4% on April 3 after months of decline. Stocks like Gland Pharma, Aurobindo Pharma, and Dr. Reddy’s saw significant gains. Analysts, including Jefferies, reassured that India's generic drugmakers are unlikely to face major tariffs due to their role in lowering US drug costs. However, companies heavily reliant on the US, like Zydus and Dr. Reddy’s, remain somewhat vulnerable.

Despite Trump's previous hints at pharma tariffs, setting up US-based manufacturing remains costly. Indian firms largely produce generics domestically, as shifting production would require significant investment and time.