Pharma Stocks Gain Ground Despite Trump’s 200% Tariff Warning

In a surprising move, Indian pharma stocks traded in the green on July 9, despite a fresh warning from U.S. President Donald Trump about levying 200% tariffs on all pharmaceutical imports.

The announcement, which could potentially disrupt the global pharmaceutical supply chain, did little to shake investor confidence—at least for now. Shares of Lupin, Biocon, Aurobindo Pharma, and Laurus Labs were among the top gainers, rising up to 1.5% in early trade.

At 9:25 a.m., the Nifty Pharma index was up 0.4% at 22,252.50, signalling that market sentiment remained resilient even in the face of looming risks.

Trump’s Bold Tariff Move

President Trump’s remarks were clear and firm. He stated that pharmaceutical manufacturers would be given around a year to a year and a half to shift their operations into the U.S.

“We’re going to give people about a year, a year and a half to come in, and after that, they’re going to be tariffed,” Trump said.
“They’re going to be tariffed at a very, very high rate, like 200 percent. We’ll give them a certain period of time to get their act together.”

This statement has sparked concerns across the Indian pharma sector, as a large portion of revenue for domestic players comes from generic drug exports to the U.S.

Why the Calm Reaction?

Despite the tough rhetoric, investors seemed unfazed, possibly due to the grace period Trump mentioned or the belief that the actual implementation may be delayed or softened.

Moreover, experts believe the real impact will only be felt later, depending on how the U.S. moves forward with this policy. If Indian pharmaceutical companies are unable to shift production or raise prices, they may be forced to shut down certain operations, which could eventually lead to drug shortages in the U.S. market.

“Generic products offer very low profit margins. If Indian manufacturers can’t adjust prices or shift production, they may have to halt manufacturing altogether,” one analyst warned.

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Market Performance and Recent Trends

While pharma stocks showed gains on July 9, the sector has had a mixed run this year. So far in July, the Nifty Pharma index has risen only 0.6%, while year-to-date, the index has declined around 5.5% amid ongoing concerns over high tariffs and regulatory pressures.

In the previous trading session, the sector was hit by a wave of downgrades. Brokerage firm Macquarie downgraded Dr Reddy’s Laboratories and Aurobindo Pharma, and also slashed the price targets of five major pharma players, pushing many stocks into the red.

What Lies Ahead?

While Trump’s tariff threat is serious, its long-term impact on Indian pharma players will depend on how the policy is implemented and how companies respond.

For now, the market remains cautiously optimistic, but with global trade tensions on the rise, the pharmaceutical sector may need to brace for more volatility in the months ahead.

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