Aurobindo Pharma, NATCO Pharma, Zydus, Glenmark: Pharma stocks slip 2% following Trump’s tariff proposal

The pharmaceutical shares on Wednesday, February 19, remained under pressure during the intraday trade as investors remained concerned amid US President Donald Trump plans to impose 25% tariffs on imports of semiconductors and pharmaceuticals.

BSE Healthcare was the biggest loser among the sectors during the morning trade, losing 1.26%. Nifty Healthcare was down 1.02% at 13,331.30 level.

Indian drugmakers earn a significant share of revenue from the US, the largest importer of Indian pharma products.

Trump, however, did not provide a date for announcing those duties and said he wanted to provide some time for drug and chip makers to set up US factories so that they can avoid tariffs.

The inspection concluded with five observations. The observations are procedural and will be responded to within the stipulated time, the company added.

Other top losers in the sector were Zydus Life (-3.56%), Solara Active Pharma Sciences (-4.57%), Ajanta Pharma (-3.30%), and Concord Biotech (-3.23%). Heavy weights like Cipla, Sun Pharma, NATCO Pharma, Biocon, Glenmark, Lupin, Dr. Reddy’s were also trading negative during the day.

Trump’s 25% tariff on pharma imports could have a more significant effect on Indian drugmakers, who export over 38% of their products to the US. At present, India imposes a 10% duty on medicines imported from the US. 

SBI Research, in a report, estimated the likely fall in Indian exports if the USA imposes a retaliatory tariff of 15% (3x the present aggregate) on India. This helps in capturing sensitivity of exports to tariff fluctuations.