Shares of pharmaceutical companies were under pressure on Friday following an indication from the US President Donald Trump that the sector will be looked in as a separate category and tariffs will be announced in the “not too distant future”.
The 20-stock Nifty pharma index was down 4.03 per cent on Friday following the announcement, with 18 of the 20 companies in the red at the end of day’s trade.
The US has already imposed a 26 per cent reciprocal tariff on Indian imports, citing high import duties on American goods by New Delhi. However, the pharmaceutical sector was exempted from reciprocal tariffs. As a result, the Nifty pharma index had gained up to 2.25 per cent on Thursday. India exported around $8 billion of pharma products to the US in fiscal 2024.
“Now, with news flowing in of tariffs to be also levied on the pharmaceuticals sector, it is likely to impact Indian pharma companies. India supplies nearly half of all generic medicines to the US, where the lower cost alternatives account for 90 per cent of prescriptions,” said Aamar Deo Singh, senior vice-president, research, Angel One Ltd.
“To leverage the tariff arbitrage opportunities, India must enhance its ease of doing business and create investment in logistics and infrastructure to create global manufacturing and export in the coming years,” he said.
