US President Donald Trump on Thursday announced that his administration will impose a 100 per cent import tariff on branded and patented pharmaceutical drugs from October 1, unless global drugmakers establish or expand manufacturing units within the United States.
Industry experts, however, believe the move will have only a limited effect on Indian drugmakers, as their exports to the US are primarily made up of generic medicines. India’s pharmaceutical exports to the US rose 20 per cent in FY25, touching nearly $10.5 billion, with generics forming the bulk of shipments.
That said, some Indian majors such as Dr. Reddy’s Laboratories, Sun Pharmaceutical Industries, and Cipla also ship patented medicines to the US. Many of these companies already operate US-based facilities, reducing their risk exposure. Biocon recently added to this trend by commissioning a new manufacturing site in Cranbury, New Jersey, through its subsidiary Biocon Generics Inc.
According to a report by NDTV Profit, the new tariff regime appears aimed primarily at multinational drugmakers like Pfizer and Novo Nordisk, which dominate the branded and patented segment. Sun Pharma could face short-term uncertainty until it finalises fresh investment plans in the US, the report noted. Analysts also caution that the future treatment of complex generics and biosimilars under the tariff rules remains unclear.
Meanwhile, the tariff announcement rattled markets on Friday. Benchmark indices extended their losing streak, with the Nifty 50 and Sensex sliding 0.47 per cent each to 24,774.3 and 80,775.23 points, respectively, by mid-morning. Pharma stocks bore the brunt, with the sectoral index plunging 2.4 per cent. Sun Pharma shed 2 per cent, becoming the top loser on the Nifty 50, while Natco Pharma slumped 3.4 per cent, leading declines within the pharma pack.