At 10:30 AM, the Nifty Pharma index was trading at 20,432.55, down 991 points (4.63%). The pharma sector faced heavy selling pressure after former U.S. President Donald Trump indicated that his administration is now reconsidering imposing tariffs on pharmaceutical imports, including those from India. This statement contradicts the previous announcement that pharmaceuticals were excluded from reciprocal tariffs, creating fresh uncertainty in the market.
Nifty Pharma Slumps 4.63% After Trump’s Tariff Shock – Here’s Why
The sudden shift in Trump’s stance has rattled investors in the Indian pharmaceutical sector. Initially, the U.S. government had assured that Indian pharmaceutical products would not face additional tariffs. However, Trump’s latest comments suggest that his administration may impose duties on imported medicines to support domestic manufacturing in the U.S. This has raised concerns over the future of Indian drug exports, as the U.S. is a key market for Indian pharmaceutical companies.
Major pharma stocks such as Sun Pharma, Lupin, and Divi’s Laboratories saw significant declines as investors reacted to the uncertainty. The fear of higher tariffs has led to panic selling, as such a move could reduce the competitiveness of Indian generic drugs in the U.S. market and impact the revenue of pharma companies heavily reliant on exports.
Market Reaction and What’s Next
Before this announcement, Indian pharma stocks had gained after the U.S. initially exempted pharmaceutical imports from tariffs. Now, with a possible policy reversal, the market sentiment has turned negative. Analysts warn that if tariffs are imposed, Indian pharma companies may face increased costs and reduced demand in the U.S. market.
Global brokerage firms have pointed out that companies with high exposure to the U.S. market, such as Zydus Lifesciences and Dr. Reddy’s, could be hit the hardest. Experts also believe that while setting up large-scale pharmaceutical manufacturing in the U.S. is costly and time-consuming, Trump’s policies could push for local production, making Indian drug exports vulnerable.