April 3: Shares of Indian drugmakers surged 5% on Thursday, in contrast to the drop in the broader stock market, after U.S. President Donald Trump’s administration exempted pharmaceutical products from the list of imports hit by reciprocal tariffs.
All 20 constituents of the pharma index were trading higher, with the index itself set for its best intra-day jump in over four years. The benchmark Nifty 50 was down 0.4%.
Trump imposed a 26% reciprocal tariff on Indian imports as part of his wider plan of 10% baseline tariffs on all imports from April 5, but said the duties do not apply to certain goods, including pharmaceuticals.
The exemption is a positive sign for India’s pharma sector given its large export exposure to the U.S., said Sonam Srivastava, founder and fund manager at Wright Research PMS.
The U.S. imports nearly a third of Indian pharma products sold overseas. India’s pharma exports to the U.S. jumped 16% to about $9 billion last fiscal year, according to data from government-backed trade body Pharmexcil.
Analysts at Jefferies said the sector “can breathe easy for now,“ but cautioned that a pharma-specific tariff order at a later date cannot be fully ruled out.
“The decision (to exempt pharma imports) underscores the critical role of cost-effective, life-saving generic medicines in public health, economic stability, and national security,“ said the Indian Pharmaceutical Alliance (IPA), which represents some of India’s top drugmakers.
On the day, Dr Reddy’s climbed 6% and was the top gainer on the benchmark Nifty 50 index. Gland Pharma surged 8.5% and was the top gainer among pharma stocks.
Cipla and Sun Pharma rose 4.5% and 5.5%, respectively.
