Gland Pharma, Lupin, Zydus Lifesciences Among Top Losers; Index Falls 5% Since Announcement
Indian pharmaceutical stocks witnessed a steep decline on April 9 after U.S. President Donald Trump reiterated his plan to impose a “major tariff” on drug imports. The announcement, part of a larger push to reshore drug manufacturing to the United States, triggered a wave of panic selling among investors in pharmaceutical equities, especially those with significant exposure to the U.S. generics market.
The Nifty Pharma index fell by 2 percent in early trade, settling at 19,964.10, with all constituents trading in the red. Shares of Lupin, Gland Pharma, and Zydus Lifesciences each dropped by up to 5 percent, contributing heavily to the index’s weakness. Since Trump’s initial statement indicating a move toward drug tariffs, the Nifty Pharma index has declined nearly 5 percent, compounding broader concerns about global protectionism in healthcare trade.
Nifty Pharma down 2% intraday, falling to 19,964.10
Index has dropped nearly 5% since Trump’s initial tariff talk
Lupin, Gland Pharma, Zydus Lifesciences down 4–5%
Broader sector sentiment weak amid global trade fears
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Trump Pushes for Pharmaceutical Tariffs to Reshore U.S. Drug Production
President Trump, speaking at a National Republican Congressional Committee event, declared that his administration will soon introduce a “very big” tariff policy targeting pharmaceutical imports. The policy, he said, is aimed at reducing U.S. dependence on overseas drug production, particularly from countries like China and India, and revitalising domestic manufacturing capacity.
While Trump did not reveal specifics about the timeline, scope, or exact duty rates, the comment alone sent ripples through global pharmaceutical supply chains, which are heavily reliant on Indian manufacturers for affordable generics.
Trump reiterates plans for “major” drug import tariffs
Aim is to incentivize U.S. pharmaceutical production
No detailed timeline or rate structure disclosed
Indian pharma sector highly exposed to U.S. generic drug market
Indian Pharma’s Exposure to the U.S. Market Raises Red Flags for Investors
The Indian pharmaceutical industry depends significantly on exports of generic formulations to the U.S., which remains the largest buyer of affordable medicines. Companies like Sun Pharma, Dr Reddy’s, Cipla, Lupin, and Gland Pharma derive a substantial portion of their revenue from the U.S. market.
Investors are worried that any new trade barrier—especially tariffs—would erode already thin profit margins in the U.S. generics segment. In addition, pricing pressure from U.S. healthcare providers and frequent regulatory hurdles from the U.S. FDA have already weighed heavily on the sector over the past few quarters.
Indian firms contribute over 46% of U.S. generic drug savings
U.S. is the largest export market for Indian pharma companies
Thin margins leave little room to absorb additional tariffs
Stocks vulnerable to policy uncertainty and trade volatility
CLSA Sees Limited Long-Term Impact, Citing Market Share and Strategic Role
Despite the sharp sell-off, global brokerage CLSA attempted to temper the panic, noting that the risk of actual implementation of high tariffs is low. In a client note, CLSA stated that Indian drug makers hold a dominant share in the U.S. generics market and play a critical role in cost containment for American healthcare systems.
CLSA estimates that Indian companies have contributed to 46 percent of all generic drug savings in the U.S., making them indispensable to both public and private health insurers. The brokerage argues that even if tariffs are introduced, companies are likely to pass on the incremental cost to buyers, or else production of certain generics may become unsustainable, triggering drug shortages in the U.S.
CLSA sees tariff risks overstated in current pricing
Indian firms may pass on higher costs to maintain margins
U.S. healthcare system benefits heavily from Indian generics
Potential shortages if generics become unviable to manufacture
Reciprocal Tariffs, Policy Adjustments May Offer Relief
CLSA also noted that India imposes a 5–10% customs duty on U.S. pharma imports, amounting to less than $50 million in annual collections. The brokerage suggests that India could eliminate this tariff to de-escalate tensions and avoid reciprocal actions from Washington.
Such a move could potentially open the door for a mutual withdrawal of pharmaceutical tariffs, reducing pressure on Indian exporters and stabilizing the trade relationship between the two countries.
India may scrap its 5–10% import duty on U.S. drugs
U.S. may hold back reciprocal tariffs in response
Trade diplomacy could mitigate worst-case tariff scenario
Ongoing policy negotiations remain key to sector outlook
