09 Jul , 2025 By : Debdeep Gupta
Pharmaceutical companies will see their shares traded with gains on July 9, even after U.S. President Donald Trump threatened to levy 200 percent tariff on all pharmaceutical imports.
He did note that pharmaceutical manufacturers manufacturers would be given time to relocate their operations into the United States before rolling out fresh duties. "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," he added. "We'll give them a certain period of time to get their act together."
However, investors paid no heed to the U.S. President's commentary. The Nifty Pharma index traded at 22,252.50, higher by 0.4 percent at 9.25 a.m. Shares of Lupin, Biocon, Aurobindo Pharma and Laurus Labs were the top gainers on the index, rising up to 1.5 percent in trade.
This is likely to significantly impact domestic pharma players, that depend on exports of generic drug formulations to the U.S. for a large portion of their sales.
According to experts, if these Indian pharmaceutical players are unable to hike their costs or move production to the U.S., it may result in a shutdown of production. Generic products can command only very lower margins, therefore, if they are unable to increase prices, they could stop manufacturing which would result in drug shortages across the U.S.
In April, when President Trump first threated to impose tariffs on pharma imports, he said they would be at "never seen before levels."
So far in July, the Nifty Pharma index has remained muted, gaining around 0.6 percent. So far this year, the index has sunk around 5.5 percent in trade amid concerns on high tariffs. In the previous session, domestic pharma players sunk into the red after brokerage Macquarie downgraded Dr. Reddy's Laboratories and Aurobino Pharma, along with cutting the price target on five pharma players.
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