The uncertainty of tariffs that the US deposits on drugs cause investors to be cautious about this sector. The market creates a large piece of income of the best Indian drug manufacturers. Donald Trump Administration teases is enough for months of pharmaceutical imports.
While the Indian exporters are expected to be largely unharmed, either by avoiding tariffs because of low -affordable generics or cost handing over, uncertainty hurts the market outlook.
“It is obvious that it is an overhang that is a little worried about investors … The way the markets are approaching is to say, let’s go and look at what will happen,” said Chirag Dagli, DSP Fund Healthcare Fund and DSP Multicap Fond Mint.
On Monday, the Associated Press said the US would require 200% duties on drugs coming to the country. Last week, US President Donald Trump said it would reduce drug prices by 1,400-1,500%. Shares of top Indian pharmaceutical companies such as Sun Pharma, Zydus Lifesciences, Lupine, Dr. Reddy’s and Divi’s Laboratories, dropped by 2-4% on NSE after his statements.
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Indian pharmaceutical products in the US are currently not subjected to any tariffs. Last month, the country deposited 25% of tariffs on Indian imports, which later doubled to 50% that quoted with Indian purchase of Russian oil. Pharmaceuticals have so far been liberated from these tariffs.
In May this year, however, President Trump revived the most popular initiative for drug prices, aimed at aligning the US drug prices with the lowest prices paid for comparable developed countries. In addition, the country has initiated an investigation into the import of drugs 232 to determine whether they are disturbing national security. This is still ongoing.
Trump has up to 200%for pharmaceutical products, from 25-50%perhaps gradually, from 25-50%. In August, 15% of the tariff on the European pharmacy, much lower than the earlier threats, was announced. At present, it remains unclear whether Indian generic drugs fall within the scope of tariffs. And if so at what pace.
The Nifty Pharma Index has remained in the last four weeks in the last four weeks, with 0.2% on the national stock exchange in September and has fallen by more than 6.5% since January. The Nifty 50 index also remained 0.4% on Friday by 0.4% and increased by 4.2% since January.
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The uncertainties about tariffs as well as the impact of the loss of exclusivity on the blood cancer of Revlimide for selected companies are carefully monitored.
“The sector brought healthy revenues last year, but 2025 brings short -term challenges,” said Vrijesh Kasera, Mirae Asset Investment Managers (India) fund manager.
In 2024, the BSE Healthcare Index index brought revenues of about 39%, making it one of the best artists. The pace slowed significantly. In the last six months, the index has gained about 14.5%. For comparison, Benchmark Sensex brought 8.2% return in 2024 and 9.5% in the last six months.
The US is the largest Indian export market for drugs. In the FY25 of the total export of pharmaceutical exports of $ 30.4 billion, $ 10.5 billion or $ 34.5%, the USA was to the USA according to the Indian Indian Council in India (Pharmexcil). Exports to the US increased by 15.6% from FY24.
Best Indian Drug Manufacturers, including Dr. Reddy’s, Aurobindo Pharma, Zydus, Lupine and Cipla, gain anywhere between 30% and 50% of their total revenue from the US.
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However, several experts in the field see the Indian pharmaceutical sector that escapes the big hit, given that the aim of the US administration seems to be to obtain more affordable drugs for its citizens and Indian products would meet these criteria.
India exports a piece of cheap generics and generations in the US more than 90% of volume regulations in the US. More than 45% of generics and 15% Biosimilars according to the US volume come from India, due to low -cost country production.
“We remain constructive in Pharma India,” said Vrijesh Kasera from Mirae Asset India Mutual Fund. “The valuation meaningfully repaired from maximum levels concerning concerns related to the tariff, yet the structural story remains intact, anchored on an Indian scale and a cheap production edge.”
Although tariffs are stored, the industry is expected to hand over the additional costs to consumers or reduce the US exposure. According to Reuters, two recent Reuters reports are looking to strengthen exports to markets, including Russia, Brazil and the Netherlands, as well as the semi -regulated markets in Africa, Latin America and Southeast Asia.
“I am not afraid of tariffs, but it affects the mood of pharmaceutical supplies,” said DSP. At this point, any clarity would be a good thing, “because it will lead you out of an uncertain environment,” he said.
Revial
Another problem that has been labeled for some pharmaceutical companies is the loss of exclusivity for blood cancer remedy, which will lose its patent in January 2026. Some Indian drug manufacturers, including Dr. Reddy, Cipla, Natco Pharma and Sun Pharma, had ages in limited quantities in the US, and earned blockbuster drugs.
Next year, the market will open to all generic manufacturers and will see cheap items that flood the market and prices of decline.
While the loss of Revlimid revenue has been baked in expectations for this industry, it is necessary to see how it affects the margin of society.
“Losses of temporary income from the product and pressure on margins require careful monitoring. Until there is better clarity of the strength of basic earnings, investors may prefer to stay on the edge before re -connecting to the sector,” Kasera said.
Details of the market size for Revlimide were not available. Inovator Bristol Myers Squibb showed a global sale of $ 5.8 billion in 2024.
(Tagstotranslate) drug tariffs (T) Indian pharmaceutical exports
