Trump promises 'never-seen-before' pharma tariffs soon; Nifty Pharma cracks 4.5%, IPCA Labs, Lupin sink 6%

India’s pharma exports to U.S. were largely generic formulations, and tariffs would make drug access to American citizens more expensive.

It ain’t over till it's over. US President Donald Trump said his administration is looking at possible tariffs on pharmaceuticals. “The pharma is going to be starting to come in at, I think, a level that you haven’t really seen before,” President Trump said speaking to reporters aboard Air Force One.

Following this update, pharmaceutical stocks crashed, with the Nifty Pharma index emerging as the one of the top sectoral losers. At close, the pharma index settled lower by 4 percent, while constituents such as Aurobindo Pharma, Lupin, and IPCA Labs sank over six percent on April 4, 2025.

“We are looking at pharma as a separate category -- we will be announcing that sometime in the near-future, not in the distant future”, Trump said.

Earlier, Karoline Leavitt, White House Press Secretary, serving in President Donald Trump's administration since January 20, 2025 also hinted at moving pharmaceutical manufacturing back to the US. “We have outsourced our critical supplies chains in our countries. Do we want out life saving drugs and medicine and chips to be made in China or here in United States of America? This is a common sense policy,” said Leavitt.

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In the previous session, domestic pharmaceutical players had heaved a sigh of relief in trade on April 3, while the other sectors saw intense selling pressure, as the White House had excluded pharmaceuticals products from the reciprocal tariffs announced by U.S. President Donald Trump.

Trump unveiled his tariff plan for several U.S. trade partners on April 2, touted as 'Liberation Day', resulting in a "discounted" broad-based tariff of 26 percent on India. The is half of 52 percent that India supposedly charges U.S., including currency manipulation and trade barriers.

All pharma imports to the U.S. were exempt from reciprocal tariffs, according to a White House factsheet. "Some goods will not be subject to the Reciprocal Tariff. These include copper, pharmaceuticals, semiconductors, and lumber articles," said the document.

Earlier, experts had noted that India’s pharma exports to the U.S. were largely generic formulations, which would make drug access to American citizens more expensive. As a result, they had suggested it was unlikely for tariffs to be imposed on this sector. However, following this update, pharmaceutical stocks might also be in for hefty tariffs.

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