US President Donald Trump’s plan to impose steep tariffs on generic medicines has unsettled Indian drugmakers and put the spotlight on their strategy in their biggest export market.
The NSE Nifty Pharma Index slipped for a second straight session in Mumbai on Thursday after closing 1.3% lower on Wednesday. Sector heavyweights Sun Pharmaceutical Industries Ltd. slid as much as 0.8% and Cipla Ltd. fell as much as 1.8% on Thursday.Trump said in a Truth Social post Wednesday that non-patented drugmakers would have two years to move production to the US or face a 100% import tariff, which would double a year later. Markets are still awaiting details of the executive order.
“This is a very surprising news for the industry,” said Mahesh Doshi, an executive committee member at the Indian Drug Manufacturers Association, or IDMA, that represents over a thousand drugmakers. “None of us were expecting this.”The move also threatens to upend the supply of low-cost medicines relied on by millions of Americans, with Indian drugmakers serving as the largest source of generic therapies for the US. In 2024, medicines from India accounted for more than half of all prescriptions for birth-control, anti-depressants and hypertension treatments. India, often dubbed the “pharmacy of the world,” also hosts the highest number of manufacturing plants approved by the US Food and Drug Administration outside the US.Trump’s proposed tariff level “essentially closes the door to those generics going to the US” and will make the drugs more expensive, unless there’s a carve-out for Indian drugmakers, said Nathan Gray, senior research fellow at the Institute for International Trade, Adelaide University.‘Unscrambling the Egg’
