Pharma shares gained on Thursday, lifted by reports that the US Administration may exclude generic medicines from proposed new import tariffs. The Nifty pharma index climbed 1.05%, with key stocks recording strong gains.
Market responds to potential tariff relief
Aurobindo Pharma led the rally, rising 4.49% to Rs 1,118.9. Lupin gained 2.59% to Rs 1,955, while Piramal Pharma rose 1.83% to Rs 197.35. Sun Pharma added 1.41% to close at Rs 1,654.60, and Cipla advanced 1.26% to Rs 1,513.4. Laurus Labs, Biocon and Dr Reddy’s Laboratories also ended in the green.
Some counters, however, saw mild profit-taking. Gland Pharma slipped 0.61%, Abbott India fell 0.75%, and Ipca Laboratories eased 0.98%.
Rationale behind US review and industry impact
According to a Wall Street Journal report, the US Administration is considering exempting generic drugs from the list of products that could face higher tariffs. The proposal is still under review and may change depending on internal discussions.
The report said the administration of President Donald Trump is exploring alternative steps to boost local production of essential generics, including possible federal grants or loans. The aim is to reduce dependence on imports, particularly from India, which is a major supplier of low-cost medicines to the US market.
Washington has been studying the possibility of imposing tariffs on a wide range of pharmaceutical goods and ingredients under Section 232 of the Trade Expansion Act of 1962, which allows duties on imports deemed a threat to national security.
Last month, Trump announced plans to levy 100% tariffs on branded drugs from October 1, though generic medicines were not specifically mentioned. The move was later delayed to allow further talks with drug manufacturers.
The latest development has improved sentiment among Indian drugmakers, who earn a large share of their revenues from the US. Analysts said the market welcomed signs that the White House may avoid new trade barriers for generics.
Analysts said that India’s generic exports to the US, valued at about $10 billion, are crucial for domestic pharma companies.