 "Dr Reddy's Labs, Lupin: Nifty Pharma slips 2% amid Trump tariff jitters")
Pharmaceutical stocks were under selling pressure on Thursday, July 31, 2025, after US President Donald Trump announced a sweeping 25 per cent tariff on all Indian goods. Nifty Pharma slipped 1.5 per cent in trade, logging a day’s low at 22,724.7.
Last checked, out of 20 stocks on the Nifty Pharma index, 16 declined. Among others, Natco Pharma fell 1.7 per cent, Dr Reddy’s Laboratories 1.5 per cent, Lupin 1.3 per cent, Ipca Laboratories 1.3 per cent, Zydus Lifesciences 1.2 per cent, and Granules India 1.2 per cent.
India exported over $10 billion in generic drugs and Active Pharmaceutical Ingredients (APIs) to the US in FY25, according to reports. The 25 per cent tariffs on Indian goods threaten to disrupt nearly $129 billion in annual bilateral trade.
The tariff order was posted by Trump on Truth Social on July 30, 2025, just days after the fifth round of trade talks concluded in Washington. He hinted at additional penalties related to India’s purchases of Russian defence and energy supplies.
The sixth round of negotiations is scheduled for late August 2025, with a US delegation visiting New Delhi starting August 25.
How could Trump tariff affect pharma companies?
"A 25 per cent tariff would pressure pharmaceutical firms with significant US exposure, and initiatives will be taken to pass costs to consumers or reassess product portfolios," said Nitant Darekar, research analyst, Bonanza. He added: Chemical API manufacturers like Divi's Laboratories and Aurobindo face higher risk given commoditised pricing sensitivity, while biologics and injectable-focused players such as Biocon and Dr. Reddy's demonstrate better resilience through manufacturing complexity. Darekar believes acute therapy companies experience greater tariff impact than chronic disease players due to pricing elasticity differences. US manufacturing remains cost-prohibitive for generics. Domestic focused firms such as Mankind, Torrent, and Ajanta are less vulnerable to tariff concerns. Hospital chains (Apollo, Fortis) and diagnostics (Dr. Lal Pathlabs, Metropolis) provide defensive positions.
Meanwhile, Indian CDMOs and CROs like maintain strong positioning supported by favourable domestic policy initiatives and sustained global outsourcing trends like (China +1) which support diversifying supply chains and reducing dependence on China.
Trump imposes reciprocal tariffs
In April, Trump announced sweeping reciprocal tariffs on more than 100 countries, aiming to incentivise companies to bring manufacturing back to the US. Until recently, pharmaceutical imports had largely been spared from such measures due to their critical nature. But in April, Trump warned of a 25 per cent levy on pharma imports, asserting that the move would reduce US dependence on foreign suppliers such as India and China.