 "Tariff relief buzz lifts Nifty Pharma Index; Lupin, Aurobindo lead gains")
Pharma stocks held their ground on Thursday, October 9, 2025, even as benchmarks – BSE Sensex, and NSE Nifty50 indices – struggled to move higher amid reports of US tariff relief for the pharmaceutical sector.
At 10:05 AM, the Nifty Pharma index was trading 1.13 per cent higher on the National Stock Exchange (NSE) as against a 0.01 per cent uptick in the Nifty50 index.
The sectoral gauge rallied 1.5 per cent intraday. Among individual stocks, Lupin share price surged 4.1 per cent intraday, Aurobindo Pharma 4.3 per cent, Zydus Lifesciences 3 per cent, and Dr Reddy's Labs 2.2 per cent.
At the time of writing this report, these shares were trading higher in the range of 1.5 per cent to 4 per cent, while Piramal Pharma, Biocon, Divis Labs, Glenmark Pharma, Cipla, Sun Pharma, and Ajanta Pharmaceuticals shares were up between 0.75 per cent and 1.35 per cent.
Why are pharma stocks rising in trade today?
Investors rushed to buy pharma stocks today after a report by Wall Street Journal (WSJ) said that the Donald Trump administration in the US may not impose tariffs on generic drugs imports.
According to the report, the decision not to impose tariffs on generics reflects a scale back in the Commerce Department's tariff investigation into pharmaceuticals.
That said, officials maintained that the move isn’t final and could change in the coming weeks, the report added.
Notably, the latest report to exclude generic pharma from tariffs comes months after the US began imposing tariffs on various imported goods. While Trump had said that he would impose 100 per cent tariffs on name-brand drugs, starting October 1, he had not mentioned anything about generic drugs. The deadline to impose tariffs on drugs was, later, pushed back as White House officials allowed trade negotiations to continue.
What pharma tariff exclusion means for Indian pharmaceutical companies?
At the end of the financial year 2024-25 (FY25), nearly 35 per cent of India's total drug/pharmaceutical exports were towards the United States. This was worth $10.52 billion.
In FY24, Indian pharma companies had exported drugs worth $8.73 billion to the US, about 31 per cent of the total exports. The same was $7.55 billion in FY23 and $7.08 billion in FY22.
According to government-backed trade body Pharmaceuticals Export Promotion Council of India (Pharmexcil), a large part of the Indian pharma exports to the US are generic / off-patent formulations, including tablets, capsules, injectables, antibiotics, vitamins, anti-diabetics, cardiovascular medicines etc.
The likely decision to not impose tariffs on generic drugs imported from outside, thus, is positive for Indian pharmaceutical companies as the industry supplies nearly 47 per cent of the generic medicines used in the US.
Pharma stocks that may benefit from US tariff exclusion
As per the latest financial statements, 54 per cent of Gland Pharma's total revenue came from the US market in FY25.
Aurobindo Pharma earned 47 per cent of its total revenue from the US, while Dr Reddy's Labs earned 45 per cent of its total revenue.
Sun Pharma, Lupin, Cipla, and Zydus Life -- large suppliers of generic/ off-patent drugs to the US – also have significant exposure to the US.