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Pharma stocks came under selling pressure in early trades on Friday after US President Donald Trump announced a 100 per cent tariffs on branded pharmaceutical products, starting October 1.
Pharma stocks declined as much as 5 per cent and Nifty Pharma index plunged 2.67 per cent. Sun Pharma declined 4.89 per cent, Biocon decreased 3.77 per cent, Abbott India Ltd slipped 3.46 per cent, Lupin fell 2.47 per cent and Cipla dipped 2.28 per cent in the early morning trades. Dr Reddy’s and Aurobindo Pharma declined 2.27 per cent, and Zydus Lifesciences was down 3.36 per cent.
“Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America,” Trump said in a post on Truth Social.
““IS BUILDING” will be defined as, “breaking ground” and/or “under construction.” There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!” he wrote.
“President Trump’s tantrums with tariffs are resuming with new tariff imposts on patented and branded drugs. India being an exporter of generic drugs is unlikely to be impacted by this. But perhaps the president’s next target can be generic drugs. This decision may have a sentimental impact on pharmaceutical stocks,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
According to Devarsh Vakil, Head of Prime Research, HDFC Securities , Indian pharmaceutical companies, which primarily focus on exporting generic drugs, are expected to avoid significant disruptions.
However, firms like Sun Pharma, which markets branded and patented products through contract manufacturing organisations across the US and EU, may face measured impacts due to their distributed production structure, he said.
The US President also announced that a 50 per cent tariff on all kitchen cabinets, bathroom vanities, and associated products will be imposed from October 1.
Trump is now moving from country-specific tariffs to product-specific tariffs. Higher tariffs on trucks, upholstered furniture etc. indicates that the Trump administration’s weaponisation of tariffs may continue till US inflation spikes forcing a rethink of this policy, Vijayakumar said.
