India’s pharmaceutical sector experienced a significant decline following US President Donald Trump’s announcement of a phased tariff plan on imported generic medicines. The Nifty Pharma index dropped nearly 2% in early trade, emerging as the worst-performing sectoral index on the National Stock Exchange. Various companies within the sector witnessed a broad-based decline, with Gland Pharma leading the losses by falling 4.54%.
The Nifty Pharma index recorded a 1.85% decrease to 25,610 against Nifty, marking a decline of 169 points or 0.70% at 24,017. Companies like Aurobindo Pharma, Glenmark, and Zydus Lifesciences also experienced notable declines, ranging from 2.28% to 3%. Additionally, Ajanta Pharma, Sun Pharma, Alkem Laboratories, and other key players traded lower by 1.3% to 3%.
Trump’s proposed tariff regime for generics involves maintaining duty-free imports for two years from August 1, 2026, followed by an increase to 100% from August 1, 2028, and eventually to 200% a year later. The policy aims to incentivize pharmaceutical manufacturing to relocate to the United States, particularly for generics, while tariffs on patented and branded medicines will remain unaffected.
The announcement of the tariff plan triggered a sell-off in Indian pharmaceutical companies, major suppliers of affordable generic medicines to the US. Analysts have pointed out that producing generic medicines in the US would result in 25-30% higher costs compared to India, making the transition within the two-year period challenging as outlined by Trump.
