American President, Donald Trump, will announce new tariffs on pharma imports on Monday, May 12, 2025. The shares of big Indian pharmaceutical companies like Sun Pharma, Cipla, Dr Reddy's, Lupin, Zydus Lifesciences, Biocon, Divi’s Laboratories, Aurobindo Pharma, among others. The Nifty Pharma Index slumped 2.3 percent in the morning trade.  

Sun Pharma, Biocon, Lupin, Divi's Laboratories, and Aurobindo Pharma were the biggest losers with shares slipping between 4.7 percent to 2.12 percent. Glenmark Pharma and Ipca Laboratories tumbled over one percent.

The US recently announced a 26 percent reciprocal tariff on Indian goods, citing New Delhi’s high import duties on American products.

Experts opine that imposing higher tariffs on pharmaceutical imports could impact Indian drug manufacturers by raising production costs and eroding their price competitiveness compared to rivals from other countries.

Indian pharmaceutical companies, one of the biggest suppliers of medicines to the United States, play a crucial role in the US healthcare system. In 2024, India’s pharmaceutical exports were valued at USD 12.72 billion, making it India's largest industrial export sector. 

According to reports, in 2022, medicines from Indian pharmaceutical companies saved the US healthcare system US USD 219 billion and USD 1.3 trillion between 2013 and 2022. Generics from India are projected to deliver an additional USD 1.3 trillion in savings over the next five years.

The new tariff will give a big boost to the domestic pharmaceutical market in the US. China is a major supplier of generic pharmaceuticals. According to the report published in Coalition For A Prosperous America, in 2022, US imports of Chinese-made pharmaceuticals increased by 485 percent as compared to 2020.