US President Donald Trump announced a phased tariff plan for imported generic medicines on Wednesday. Consequently, pharmaceutical stocks faced selling pressure across Indian markets. The move raised concerns about long-term access to one of the biggest export markets. However, the proposal gives generic drug makers two years without tariffs before higher duties begin.
Meanwhile, the Nifty Pharma index dropped around 2 percent during early trading. Investors started assessing the possible impact of tariffs that could eventually reach 200 percent.
Sun Pharma, Cipla And Other Companies Face Market Pressure
After the announcement, several major Indian pharma companies saw their shares decline. Aurobindo Pharma recorded the biggest fall among leading companies. Its stock dropped 3.48 percent or Rs 54.95 to Rs 1525.50.
Similarly, Sun Pharmaceutical Industries reached Rs 1943.45 after declining 18.70 points or 0.95 percent on BSE. Cipla shares fell 2.5 percent to Rs 1,396 per share. Lupin also declined 2.5 percent and reached Rs 2,452.
Additionally, Dr Reddy’s Laboratories fell over 1 percent to Rs 1,185. Zydus, Alkem Laboratories and Torrent Pharmaceuticals also declined up to 2 percent.
Trump Announces Phased Tariff Timeline For Generic Medicines
Trump shared the tariff plan through a post on Truth Social. He stated that generic medicines entering the US would face no tariffs for two years.
After that period, tariffs will rise to 100 percent from August 1, 2028. Furthermore, duties will increase to 200 percent by August 1, 2029.
The phased approach aims to encourage pharmaceutical companies to build manufacturing plants and related infrastructure inside America. Companies avoiding local production could face higher import duties under the broader “America First” manufacturing agenda.
However, branded and patented medicines already face tariffs. Meanwhile, generic medicines continue under the earlier policy without duties.
Why The US Market Matters For Indian Drugmakers
The US remains a crucial market for Indian pharmaceutical companies. Generic medicines account for nearly 90 percent of prescriptions in America.
Therefore, the two-year tariff-free period gives Indian exporters time to review supply chains and investment plans. However, future 100 percent and 200 percent tariffs could change the business calculations for companies without US manufacturing facilities.
Indian pharmaceutical firms are closely watching changes in US trade policy. Industry officials believe India’s low-cost manufacturing ecosystem remains globally competitive.
Moreover, long-term tariff barriers may push companies toward expanding US production or using contract manufacturing partnerships.
Indian Companies Prepare For Possible Long-Term Changes
Among Indian companies, Aurobindo Pharma has significant manufacturing presence in America. Dr Reddy’s Laboratories, Lupin, Cipla and Zydus Lifesciences also operate manufacturing facilities there.
On the other hand, Alkem Laboratories and Torrent Pharmaceuticals depend largely on Indian facilities. Their presence in the US generic market remains limited for cash flow generation.
Meanwhile, Biocon produces biosimilar and generic products through facilities in India and Malaysia. Senores Pharmaceuticals maintains local manufacturing presence for US generic market requirements.
The new tariff plan creates uncertainty, yet companies now have a transition period to reassess strategies and future investments.
