Indian pharmaceutical giants like Sun Pharma, Cipla, Dr Reddy’s Laboratories, and Lupin, among others, saw steep cuts of up to 2 percent in the morning on Wednesday after US President Donald Trump said he would sharply raise tariffs on imported medicines.
In an interview with CNBC, Trump said the new duties would begin at a modest rate but could increase significantly over time. “We’ll be putting an initially small tariff on pharmaceuticals, but in one year, one-and-a-half years, maximum, it’s going to go to 150 percent and then 250 percent, because we want pharmaceuticals made in our country,” he said, without disclosing the starting tariff rate.
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The remarks have added to fears of rising protectionism, particularly in critical sectors like healthcare and technology. Trump also indicated that tariffs on semiconductors and chips could be unveiled “next week or so,” although he did not share specifics.
The US government has long sought to shift pharmaceutical manufacturing back to domestic soil, citing both economic and national security concerns. A formal review of the pharma sector is currently underway, with industry-specific tariffs under discussion — though there’s no clear timeline for when the findings will be released.
At present, trade between the US and the European Union in pharmaceuticals and semiconductors is tariff-free under a bilateral framework. Should new import duties be implemented following the investigation, they would reportedly be capped at 15 percent under the terms of that agreement.
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The proposed tariffs could deliver a significant setback to the pharmaceutical industry, which has cautioned that such measures may inflate drug costs, discourage investment in the US, and disrupt supply chains — potentially putting patients at risk. Many drugmakers are already grappling with the effects of Trump’s drug pricing initiatives, which they argue threaten both profitability and their ability to fund research and innovation.
In a fresh move last week, Trump sent letters to 17 pharmaceutical companies, urging them to commit to lowering drug prices in the US by September 29. Among the demands: offering their full portfolio of existing medicines to every Medicaid patient at the lowest price available in any developed country.
Trump’s latest comments could weigh on sentiment for Indian drugmakers, which count the US as a key export market. As investors assess the risks of a shifting trade landscape, pharma counters may remain in focus in the days ahead.
At about 11 am, the Nifty Pharma index was down 1.3 percent to 21,686. Divis Labs, Sun Pharma, Dr Reddy's, Cipla, and Glenmark Pharma were the major laggards on the index.
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