Nifty Pharma down 2.5% as Trump slaps 100% import tariffs; impact decoded

Among individual counters, Sun Pharma slumped 4.87 per cent to a fresh 52-week low of ₹1,548, while Gland Pharma tumbled 4.70 per cent to ₹1,880. Biocon declined 3.68 per cent to ₹342.85.

Pharmaceutical stocks bled on Friday, September 26, 2025, with the Nifty Pharma index plunging up to 2.5 per cent, following US President Donald Trump announcement of a sweeping 100 per cent tariff on any branded or patented drug imports. Already down over 6 per cent this year, the sector now faces another potential setback, with the tariffs expected to weigh further on investor sentiment.

 

In a post on Truth Social, Trump said, "Starting October 1st, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. 'IS BUILDING' will be defined as, 'breaking ground' and/or 'under construction.' There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!"

 

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On the bourses, the Nifty Pharma index tumbled as much as 2.42 per cent, hitting an intraday low of 21,445.50. Among individual counters, Sun Pharma shares slumped 4.87 per cent to a fresh 52-week low of ₹1,548, while Gland Pharma stock tumbled 4.70 per cent to ₹1,880. Biocon stock also declined 3.68 per cent to ₹342.85. Other pharma stocks, including Laurus Labs, Ipca Labs, Divis, Zydus Life, Alkem Labs, Cipla, Ajanta Pharma, Dr Reddy’s, Torrent Pharma, Abbott India, and Glenmark, fell between 0.8 and 3.2 per cent.  FOLLOW LATEST STOCK MARKET UPDATES LIVE  Several Indian drugmakers, including Dr. Reddy's, Cipla, Lupin, Zydus Life, Aurobindo Pharma, Biocon, and Glenmark Pharma, earn a major portion of their revenues from US sales, making them a key investor focus.

 

According to Kranthi Bathini, director of equity strategy at WealthMills Securities, this development is, undoubtedly, a big negative for pharma stocks in the short to medium term.

 

"As anticipated, President Trump has announced a 100 per cent tariff on drug imports, but there is still a need for clarity on whether critical and non-critical drugs will be treated differently. Given the rising healthcare costs in the US, imposing such steep tariffs will only burden the American healthcare system," he said, adding: Any move of this scale cannot be implemented overnight, especially since Indian pharma companies operate plants that follow global good manufacturing practices and are already US FDA-approved. Replacing this supply chain will be a major challenge for the US administration.

 

It is better to wait and watch for more details from the administration at this point, he suggested.

 

"The 100 per cent US tariff on branded and patented pharmaceutical products could negatively impact Indian pharmaceutical exporters, as the US represents the largest market for Indian pharma, accounting for approximately 35 per cent of exports, valued at $10 billion in FY25, according to the Pharmaceuticals Export Promotion Council of India," said Maitri Sheth, Deepika Murarka, Stuti Bagadia of Choice Institutional Equities.

 

Among the major players, Zydus Life derives 49 per cent of its revenue from US sales, Dr. Reddy’s accounts for about 47 per cent, and Aurobindo Pharma earns over 44 per cent of its revenue from the US market.

 

G Chokalingam, founder and head of equity at Equinomics Research, too, opined that the 100 per cent tariff may not last long, as such a steep duty would substantially increase healthcare costs in the US.

 

"There is, therefore, some hope that the tariff on pharmaceutical imports will ultimately be moderated. In the near-term, though, there may be a knee-jerk reaction," Chokalingam added.   "While the tariff primarily targets branded drugs, there is ambiguity over whether complex generics and specialty medicines might also be affected, which could pose challenges for companies relying on US exports. However, firms with manufacturing plants under construction in the US will be exempt, offering an opportunity to mitigate tariff exposure," analysts at Choice Institutional Equities said.    ALSO READ | Waaree Energies shares slide 5% on reports of US prob for evading duties

Pharma Stocks Investment strategy

 

From an investment standpoint, Chokalingam advises investors to focus on pharmaceutical companies with a strong domestic market presence. Among exporters, preference should be given to those with minimal exposure to the US market.

 

Pharmaceuticals Industry insights

 

A CRISIL report recently highlighted that India's pharmaceutical sector is projected to grow 7-9 per cent this fiscal, slightly down from around 10 per cent last year, with operating margins expected to stay steady at 22-23 per cent.

 

The moderation is mainly due to exports to regulated markets, which are slowing after a high base from advanced US purchases last year, with formulation exports expected to rise 9-11 per cent versus the 14 per cent growth seen over the past two years.