Indian pharma stocks fall after Trump’s new drug tariffs; mostly ‘sentimental’, say analysts

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By Ananta Agarwal and Rishika Sadam

(Reuters) -Indian pharmaceutical stocks fell 2% on Friday after U.S. President Donald Trump announced a 100% tariff on imports of branded and patented drugs, effective Oct. 1.

The U.S. is India’s largest market for pharmaceutical exports, accounting for over a third of the total volume, mostly of cheaper generic drugs.

Of the 20 index constituents, 18 traded in the red as of 2:37 p.m. IST.

Analysts described the decline as “sentimental”, noting that India’s exports to the U.S. are primarily generic medicines, which may not be affected by the tariffs.

Sun Pharmaceutical Industries, India’s largest drugmaker by revenue and the heaviest stock on the index, fell about 3%. Sun Pharma markets patented drugs, including Ilumya, a psoriasis treatment approved by the U.S. FDA.

The company also has a contract manufacturing unit through EU partners for specialty drugs, where a 15% tariff applies to EU exports to the U.S., according to Vishal Manchanda, equity analyst at Systematix Group.

“The impact on Sun is not very meaningful,” he said. “It may be between 1% to 3% of EBITDA.”

Laurus Labs declined the most among constituents of the index, down about 6%.

“There is a general worry that CDMO (contract drug manufacturing organisations) might be impacted as the U.S. moves manufacturing in-house,” Manchanda added.

Biocon, which makes complex biosimilars for cancer treatment and has significant U.S. exposure, is down about 4.6%.

“Uncertainty remains whether complex generics and biosimilars will face future tariffs,” ICICI Securities analyst Pankaj Pandey said in a note on Friday.

(Reporting by Ananta Agarwal in Bengaluru; Editing by Nivedita Bhattacharjee and Janane Venkatraman)