 "PHARMA, MEDICINE")
Indian drugmakers are unlikely to be affected by American President Donald Trump’s decision to impose a 100 per cent tariff on imported branded or patented pharmaceuticals, as they largely supply generic drugs to the United States. However, Sun Pharma, Biocon, Aurobindo Pharma, and other Indian majors in the US branded drugs market may face some “negative impact”, according to analysts.
The Nifty Pharma index fell 2.14 per cent on Friday after Trump announced the tariff on Truth Social. He said pharmaceutical companies that have either “broken ground” or are in the construction phase of their manufacturing plants in the US may not face the tariff. A few weeks earlier he had announced 15 per cent tariffs on branded pharmaceutical products manufactured in Europe.
Analysts said his latest statement has created confusion over the exact tariffs on branded medicines. A note by Nuvama analysts listed Indian companies with exposure to the US branded drugs market: Sun Pharma (innovative medicines division, $1.1 billion revenue in FY25), Biocon (branded biosimilars, less than $450 million sales) and Aurobindo (branded oncology drugs, $100 million revenue).
Sun Pharma’s share price fell 2.5 per cent, Biocon was down almost 5 per cent and Aurobindo slipped 0.72 per cent on the BSE, on Friday.
“Some domestic formulation makers have a niche presence in the branded and patented drugs space, but the contribution of those drugs to their revenue is modest,” said Anuj Sethi, senior director at Crisil. “Moreover, given the largely non-discretionary nature of these products, the majority of the tariff cost is likely to be passed through. Some of these domestic companies also have manufacturing facilities in the US, which would make them exempt from the new levies.”
Nuvama analysts said they expected a positive impact on Jubilant Pharmova, which is likely to benefit from its contract development and manufacturing organisation (CDMO) unit at Spokane, near Washington. Alkem, another Indian pharmaceutical company, is setting up a small CDMO unit in the US and may be spared Trump’s tariff.
The Indian Pharmaceutical Alliance (IPA), which represents large drug exporters, said it did not see much impact on domestic companies. “The social media post by POTUS refers to patented/branded products supplied to the US. It is not applicable to generic medicines,” noted Sudarshan Jain, secretary general of the IPA.
India is the largest supplier of generics to the US, with exports worth $3.7 billion in the first half of 2025. Despite making up nearly 90 per cent of drug volumes in the US, generics account for only about 10 per cent of the total value, underscoring their critical role in keeping the US healthcare system affordable. As Indian companies fill about half of volumes, the absence of tariffs on generics is positive for the industry.
Pharmaceutical companies say Indian exports to the US remain unaffected, while the UK and EU -- with their stronger focus on patented and branded medicines -- are likely to feel a much greater impact. According to Nikkhil K Masurkar, CEO of Entod Pharmaceuticals, “Indian pharma firms have minimal presence in the US originator/brand market. The portion of Indian-origin exports that are branded/patented is best characterised as being between 1 per cent and 3 per cent, to be conservative.”
Nirali Shah and Udit Gupta, analysts at Ashika Institutional Research, said the direct near-term impact on Indian pharma would be limited as the tariff targets branded and patented drugs, a field dominated by global innovators.
“Uncertainty remains around whether complex or specialty generics (an area of increasing focus for Indian players) may come under scrutiny in future,” they said, adding that as the US is the largest market for Indian pharma any expansion of tariffs could “materially alter the growth or export trajectory”.
Indian exporters’ headline risk is high but operational risk low. “We should watch for any policy spillover into speciality or complex generics, which could be the next flashpoint. That said, several aspects of the announcement remain ambiguous and further clarity from regulators can be expected in the coming weeks,” stated Ashika analysts.
Several analysts noted that Trump’s announcement does not cover active pharmaceutical ingredients, ingredient manufacturing, fill-finish products or device manufacturing. “Considering the complexity of the global supply chain, the tariff announcement seems incomplete and we think large branded and patented pharma companies can still avoid tariffs by announcing either capex, M&A, or partnerships in the US,” Nuvama said.
Large innovators from the US and Europe have already announced major capex plans: AstraZeneca ($50 billion), Johnson & Johnson ($55 billion), Eli Lilly ($27bn–$30 billion), Roche ($50 billion), Novartis ($23 billion), Sanofi ($20 billion) and AbbVie ($10 billion).
These investments are expected to help large innovator pharmaceutical companies avoid tariffs, enabling their contract manufacturing partners in India, China, South Korea, and elsewhere to maintain existing contracts.
“As these capex plans will take four to five years, we think global CDMOs will be able to execute existing manufacturing contracts. However, if the tariffs sustain for a long period, they may create challenges for non-US CDMO companies after a few years,” Nuvama said.
From the perspective of US-based CDMOs, demand for manufacturing branded products in the US is likely to grow, meaning American facilities stand to benefit.
