Donald Trump’s new tariffs sent jitters down Indian pharma stocks today

Stocks of pharmaceutical companies declined in today’s trading session, after U.S. President Donald Trump announced a 25% tariff on exports and additional penalties on India for maintaining ties with Russia. Even though pharmaceuticals and electronics were exempted from the reciprocal tariff action under the U.S.’s Section 232 trade investigations, the latest announcement shook investor sentiments, causing off-loading.

Nifty Pharma was one of the main underperformers amongst other sectoral indices, dropping by 1.5% from its previous close, with 19 of its 20 constituents trading in the red. The only company to see an uptick was Torrent Pharma, seeing a marginal rise of 0.65%. Torrent Pharma recently announced their Q1 earnings, reporting a 11% year-on-year (YoY) growth in revenue to Rs 3,178 crore, along with a rise in net profit of 20% to Rs 548 crore. 

The company’s international revenues were driven up with Brazil clocking 11% to Rs 218 crore, Germany by 9% to Rs 308 crore and 19% to Rs 308 crore in its US operations.

Leading the fall in the Nifty Pharma index were Ipca Labs (-3.43%), Granules India (-3.19%) and Zydus Lifesciences (-3.13%). Even Nifty 50 spot holders, Cipla and Dr Reddy’s saw a drop of 0.47% and 1.93%, bringing their share prices Rs 1542 and Rs 1280 respectively.

Even Sun Pharma, which released their Q1FY2026 results today saw a sharp drop by 1.95%, bringing its share price down to Rs 1700 from yesterday’s Rs 1733.80. As per the release, the company posted a net profit of ₹2,279 crore, a 20% decline from last year’s ₹2,835 crore. It’s EBITDA rose by 19.2% to ₹4,302 crore, maintaining an EBITDA margin of 31.1%. Its US formulation sales recorded US$ 473 million, up by 1.4%.

Analysts from Nomura have warned about India’s GDP slipping by 2 percentage points as an implication of the US tariffs on its exports. “We maintain our FY26 GDP growth forecast at 6.2% YoY, but flag a downside risk of ~0.2pp. Exports to the US account for 2.2% of India’s GDP, and include pharma, smartphones, gems & jewellery, industrial machinery, auto components, textiles and iron & steel; most of which will likely face margin pressure,” the report suggested.

Nomura also stated that with the new tariff announcement, along with continuous negotiations, India’s effective tariff rate could come down to as close to 20%. “Pharmaceuticals and electronics are currently not subject to tariffs (given section 232 investigations ongoing), but as these sectoral tariffs are imposed, the higher tariff burden will likely be passed on to end-consumers,” the report stated. As per Nomura’s data, pharmaceuticals make up for nearly 37% of the sectoral export by India, with 12% of it making US’s share and with imposition of tariffs, export volumes will be affected.

Mr. Sanjaya Mariwala, Executive Chairman and Managing Director of OmniActive Health Technologies, says, “The 25% penalty and fine are a serious blow to India’s exports, especially when the US has been our biggest trading partner for years. Pharma and electronics are taking the biggest hit. Beyond monetary, this move adds a layer of uncertainty to an already shaky global trade environment.” He adds that the tariffs would interrupt the smooth trade flow, inflate US drug costs, stall treatments, and put even greater pressure on American healthcare budgets. "Back home, the profits for Indian pharmaceutical firms may decline, and R&D may stagnate, slowing down innovation and stalling new drug clearances," he says.