Trump’s threat of 100% tariff creates panic in Indian pharma sector, Sun Pharma and Cipla shares crash

Trump Tariff War Impact Indian Pharma: A recent statement by US President Donald Trump has created panic in the Indian pharmaceutical industry. Trump has indicated that heavy tariffs of up to 100% could be imposed on foreign drugs imported into the US. As soon as this news came out, the sentiment of investors towards the pharmaceutical sector in the Indian stock market deteriorated and a sharp fall was recorded in the shares of major pharmaceutical companies.

There was a stir in the stock market

There was panic among investors as soon as the market opened on Thursday, April 2. Nifty Pharma index fell by about 2.5%. The biggest impact was on the giant Sun Pharmaceutical Industries, whose shares fell by 4-5% and reached near their 52-week low. Apart from this, shares of big companies like Divis Laboratories, Biocon, Lupine, Dr. Reddy’s Laboratories, Cipla and Zydus Lifesciences also fell by 2% to 5%.

Trump’s ‘Made in America’ strategy

According to a Bloomberg report, Trump’s primary objective is to boost domestic manufacturing and employment in America. Trump argues that if foreign pharmaceutical companies do not produce on American soil, they will have to pay heavy taxes to enter the American market. This move is part of their ‘Made in America’ It is part of a policy that plans to make the American economy self-reliant.

Mathematics of Generic vs Branded Medicines

Market experts believe that the decline being seen in the market at present is mainly based on sentiment. A large portion (more than 90%) of pharmaceutical exports from India to the US are generic drugs. According to experts, Trump’s main focus is to impose tariffs on branded and patented medicines, while generic medicines are currently considered out of the radar.

However, companies like Sun Pharma, which also sell specialty and branded medicines in the US, have seen more pressure. At the same time, companies like Divis Laboratories and Laurus Labs, which export Active Pharmaceutical Ingredients (APIs), have also seen weakness.

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Preparation of Indian companies

There is also a positive aspect that many Indian companies are already strengthening their presence in the US. For example, Biocon recently started its unit in New Jersey. India exports medicines worth about $10.5 billion to America every year.

Experts say that if Indian companies change their strategies and increase local manufacturing in America, they can reduce the impact of this tariff policy. For now, investors should wait for the policy to be officially implemented instead of panicking.