Lupin, Aurobindo Pharma, Dr Reddy's, Sun Pharma fall up to 2% as Trump's tariff plan rattles generic drug exporters

Shares of Indian pharmaceutical companies saw broad selling pressure on Wednesday, with the Nifty Pharma index falling nearly 2% and 19 of its 20 constituents trading lower, after U.S. President Donald Trump unveiled a phased tariff regime on imported generic medicines. Investors dumped export-oriented pharma stocks amid concerns that the proposed tariffs, though deferred for two years, could eventually squeeze margins and force companies to ramp up manufacturing in the United States.

Weighed down by the development, the Nifty Pharma index fell as much as 1.7% in opening trade today amid investors' concerns over the potential impact of the proposed tariffs on India's export-driven drugmakers.

Lupin, Aurobindo, Gland Pharma lead losses

Lupin emerged as the biggest laggard on the pharma index, declining 2.27% to ₹2,457.70 after touching an intraday low of ₹2,455.

Aurobindo Pharma, another major exporter of generic medicines to the US, fell 1.88% to ₹1,550 after slipping to an intraday low of ₹1,532.50. Gland Pharma, which has significant exposure to the injectable generics market in the U.S., dropped 1.58% to ₹2,443.30.

Ajanta Pharma declined 1.45%, Glenmark Pharma fell 1.43%, while both Cipla and Zydus Lifesciences lost 1.35% each as investors reduced exposure to companies with sizeable US businesses.

Among other heavyweights, Alkem Laboratories slipped 1.26%, Wockhardt fell 1.17%, Mankind Pharma lost 1.05%, Sun Pharmaceutical Industries declined 0.94%, Biocon dropped 0.92%, and Dr. Reddy's Laboratories traded 0.90% lower. Divi's Laboratories and Ipca Laboratories lost 0.72% and 0.78%, respectively.

Laurus Labs was relatively resilient, edging down only 0.06%, while Torrent Pharmaceuticals stood out as the sole gainer among the major pharma stocks, rising 0.21% despite the sector-wide weakness.

The selling pressure was visible across the sector, with 19 of the 20 constituents of the Nifty Pharma index trading in the red.

Why the pharma stock reacted

The selloff followed Trump's announcement of a phased tariff plan aimed at reshoring pharmaceutical manufacturing to the United States.

Under the proposal, imported generic medicines will continue to enjoy zero tariffs from August 1, 2026, until August 2028. A 100% tariff will then be imposed from August 2028, before increasing to 200% from August 2029.

Announcing the policy on his Truth Social platform, Trump said the objective is to bring generic drug manufacturing back to the US by encouraging companies to invest in domestic production capacity during the transition window.

The two-year transition period is intended to give pharmaceutical companies time to establish manufacturing facilities in the US. Companies that continue exporting generic medicines without local production could eventually face significantly higher import costs.

For Indian drugmakers, the announcement is particularly significant because the US remains their largest overseas market, accounting for a substantial share of revenues for companies such as Sun Pharma, Dr. Reddy's, Aurobindo Pharma, Lupin, Cipla, Zydus Lifesciences and Glenmark. Any increase in import costs could pressure pricing, margins and competitiveness unless companies expand their manufacturing footprint in the US.

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