Pharma stocks surge as Trump puts 90-day hold on planned tariffs

Shares of Indian pharmaceutical companies rallied on Friday after US President Donald Trump declared an immediate 90-day tariff pause for many countries, effectively putting on hold the 26 per cent levy on Indian goods. 

 

However, the White House imposed a 10 per cent blanket tariff on nearly all US imports. The hike in China tariffs to 145 per cent was a response to Beijing's plan to impose an 84 per cent duty on US goods starting April 10.

 

Reacting to Trump's tariff pause, shares of Indian pharmaceutical firms gained with the benchmark Nifty Pharma rising as much as 3.55 per cent.  Shares of Granules India rose as much as 5.65 per cent while the prices of Cipla and Sun Pharmaceutical Industries rose over 5 per cent during the day. Laurus Labs advanced by 4.8 per cent, while Aurobindo Pharma rose 4.9 per cent. 

 

 

Nifty Pharma has fallen by 12.8 per cent so far this year, with Natco Pharma and Granules India leading the plunge. Meanwhile, as of 10:16 AM, the index was up 2.28 per cent, compared with a 1.95 per cent advance in the benchmark Nifty50 index. Last checked, all 20 stocks in the Nifty Pharma index were traded with gains.   

 

It is to be noted that pharmaceutical goods were originally exempted from the tariff order along with auto and auto parts. However, Trump said that the US will 'soon' announce major tariffs on pharmaceutical imports, triggering the stocks to nosedive. 

 

India and China, the two major suppliers of generic drugs to the US, were expected to take a hit, with Trump not specifying the countries that will be subjected to pharma tariffs. 

 

According to data shared by Pharmexcil, a pharmaceutial export promotion agency, the US market grew 14 per cent despite a large base in April–February periof of FY25 – and remained the largest destination for India's pharmaceutical (pharma) exports, accounting for a 36.6 per cent share (or $9.8 billion). Moreover, exports for the full year are expected to be around $27 billion. 

 

The US, Europe, and Africa are the largest export regions for India, together accounting for almost 70 per cent of the country’s total pharma exports. Exports to the EU grew by a modest 2.72 per cent, while exports to Africa fell by 1.74 per cent, ICICI Securities said in a note earlier.