Sun Pharmaceutical Industries, Lupin, and other Indian pharma stocks will be in focus on Friday after the US President Donald Trump announced a fresh 100% tariffs on branded or patented pharmaceuticals starting October 1, unless a company is building a manufacturing plant in America.
Trump posted on his Truth Social that there would be no levies on pharmaceutical imports if companies have broken ground on a US manufacturing plant, or if such a plant is under construction.
“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. ‘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,” Trump wrote.
Analysts believe the 100% US tariff on branded and patented pharmaceutical products could negatively impact Indian pharmaceutical exporters, as the US represents the largest market for Indian pharma, accounting for approximately 35% of exports, valued at $10 billion in FY25, according to the Pharmaceuticals Export Promotion Council of India.
“While the tariff primarily targets branded drugs, there is ambiguity over whether complex generics and specialty medicines might also be affected, which could pose challenges for companies relying on US exports. However, firms with manufacturing plants under construction in the US will be exempt, offering an opportunity to mitigate tariff exposure,” said Maitri Sheth, Pharma & Healthcare Analyst at Choice Institutional Equities.
However, Generics, OTC drugs, biologics and specialty drugs are currently excluded from the tariffs, as they fall under a separate Section 232 investigation by the US Commerce Department.
India is the largest supplier of generics to the US. In 1H 2025 alone, exports stood at $3.7 billion.
“Direct near-term impact on Indian pharma is limited, as the tariffs target branded/patented drugs largely dominated by global innovators.Uncertainty remains around whether complex/specialty generics (an area of increasing focus for Indian players) may come under scrutiny in future. The US remains the largest market for Indian pharma; hence, any expansion of tariff scope could materially alter the growth/export trajectory,” said analysts at Ashika Institutional Research.
At present, they believe headline risk is high but operational risk is low for Indian exporters.
“We should watch for any policy spillover into specialty/complex generics, which could be the next flashpoint. That said, several aspects of the announcement remain ambiguous and further clarity from regulators can be expected in the coming weeks,” said the analysts.
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