US President Donald Trump’s announcement of a 100 percent tariff on branded and patented pharmaceutical imports has sent ripples through the global pharma ecosystem, with India standing at a critical juncture. As one of the largest suppliers of generic and specialty drugs to the US, India exported $8.7 billion worth of pharmaceutical products to the American market in FY24, accounting for nearly a third of its total pharma exports.
Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, clarified: “The social media post by POTUS refers to patented/branded products supplied to the US. It is not applicable to generic medicines.”
The stock market has already begun reacting to the tariff announcement. The Nifty Pharma Index fell 1.82 percent on September 26, marking a five-day losing streak. Shares of Sun Pharma, Biocon and Natco Pharma saw declines of up to 3.5 percent, as investor sentiment turned cautious over potential margin pressures and regulatory uncertainty.
Experts aren’t too worried though. Namit Joshi, chairman of Pharmexcil, states that most large Indian companies already operate US manufacturing or repackaging units and are exploring further acquisitions. He adds, “Nonetheless, it is prudent to remain prepared for future policy shifts and to build risk-mitigation strategies.”
Vishal Manchanda, senior vice president, institutional research at Systematix Group, explains: “Sun Pharma’s US branded market is about 15 percent of their sales. But a large part of this is manufactured in Europe, the US and Canada, which should minimise any impact on Sun. In my assessment, a broad range of Ebitda impact could be 1 to 3 percent of Sun’s Ebitda. The stock has corrected 15 percent over the last 12 months.”
Biocon, too, has a branded biosimilars business worth nearly $450 million, while Aurobindo Pharma’s oncology segment contributes around $100 million. These companies could face pricing pressure or reduced competitiveness unless they ramp up US-based manufacturing. However, Biocon may be shielded from the tariff due to its newly commissioned facility in New Jersey, which qualifies for exemption under Trump’s directive.
Indian pharma firms with existing or upcoming manufacturing facilities in the US are likely to weather the storm better. Cipla, Dr Reddy’s and Lupin already operate plants in the US, potentially insulating them from immediate tariff impacts. The tariff announcement may accelerate a broader trend of Indian companies investing in US infrastructure to safeguard market access.
While the 100 percent tariff might not directly affect India’s generic exports, it sends a clear signal about the US’s desire to localise pharmaceutical manufacturing. "For Indian pharma players venturing into complex generics, biosimilars and patented products, this is a serious threat of margin compression as well as market access barriers,” Hari Kiran Chereddi, MD & CEO of HRV Pharma & NHG Pharma, says. “It emphasises the need to diversify markets, create resilience in supply chains and also to adopt active diplomacy to secure India's pharma leadership.”
First Published: Sep 26, 2025, 18:01
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