Pharma stocks: Sun Pharma, Biocon, Dr Reddy's, Torrent Pharma slip on Trump's generic drug tariff plan
Among the notable losers were Sun Pharmaceutical Industries Ltd, Biocon Ltd, Torrent Pharmaceuticals Ltd, Dr Reddy's Laboratories Ltd, Cipla Ltd, Wockhardt Ltd, Zydus Lifesciences Ltd, IPCA Laboratories Ltd, Gland Pharma Ltd, Alkem Laboratories Ltd and Ajanta Pharma Ltd.
- Jul 23, 2026,
- Updated Jul 23, 2026 11:22 AM IST
Pharma stocks remained under pressure in Thursday's trade after US President Donald Trump outlined a phased tariff roadmap for imported generic medicines, raising concerns over the long-term outlook for exporters supplying the US market.
In a social media post, Trump said all generic drugs imported into the United States would continue to attract a zero per cent tariff for two years effective August 1, 2026. After that, such imports would face a 100 per cent tariff for one year, followed by a 200 per cent tariff thereafter.
"This is done in order to reshore generic pharmaceutical production into America, with a penalty to those companies that decide not to build plant and equipment within the stated period of time given to them. The objective of this policy is to protect the people of the United States," Trump said.
He added that the existing policy for patented, branded and innovative drugs would remain unchanged.
"Pharmaceutical facilities are being built, at a level never seen before, all over the United States of America," the US President said.
The announcement weighed on Indian pharmaceutical stocks, with most constituents of the Nifty Pharma index trading in the red. Among the notable losers were Sun Pharmaceutical Industries Ltd, Biocon Ltd, Torrent Pharmaceuticals Ltd, Dr Reddy's Laboratories Ltd, Cipla Ltd, Wockhardt Ltd, Zydus Lifesciences Ltd, IPCA Laboratories Ltd, Gland Pharma Ltd, Alkem Laboratories Ltd and Ajanta Pharma Ltd.
However, Motilal Oswal Financial Services Ltd (MOFSL) said the proposed tariff plan is unlikely to have an immediate impact on Indian drugmakers.
"Indian companies export significant generic medicines to the United States market. The proposed tariffs are set to begin in 2028, offering a two-year window," the brokerage said.
According to MOFSL, the transition period provides Indian pharma companies time to diversify export destinations and adjust their business strategies.
The domestic brokerage also noted that once the tariffs come into force, the burden is likely to be felt by US consumers and insurers through higher healthcare costs.
Mayank Jain, market analyst at Share.Market by PhonePe, said, "The Indian pharmaceutical sector is navigating a sharp divergence between robust domestic fundamentals and emerging global trade risks. While the domestic market accelerates toward its strongest annual performance in five years, news of proposed United States trade tariffs on generic medicines sparked immediate selling pressure across major pharma stocks, testing investor sentiment.
Jain added, "While policy uncertainties surrounding US trade may introduce short-term volatility, the sector's broader trajectory remains anchored in solid fundamentals. Companies holding strong domestic market share, active raw-material manufacturing bases, and advanced pipelines in novel formulations are best positioned to navigate global supply chain shifts and sustain long-term growth."
Prasenjit Paul, Fund Manager at 129 Wealth & Research Analyst at Paul Asset, noted, "Indian drugmakers with existing manufacturing facilities on US soil stand to gain a competitive edge over international rivals if trade rules tighten. Consequently, we treat any correction in quality pharma stocks as a buying opportunity. Our bullish view on selected pharma stocks over the last 3-4 months remains unchanged, with pharma continuing to be our top sectoral bet for 2026."
Notably, the US is the largest export market for India's pharma industry, particularly for generic medicines.
FAQs
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What did Donald Trump announce about US tariffs on imported generic medicines?
Donald Trump said imported generic medicines will continue to face zero per cent tariff for two years from August 1, 2026. After that, they may attract a 100 per cent tariff for one year and then a 200 per cent tariff.
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Why did Indian pharma stocks fall after the tariff announcement?
Indian pharma stocks came under pressure because the US is the biggest export market for India's generic drugmakers. Investors are largely worried that higher tariffs in the future could hurt exports, margins and long-term growth prospects.
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Which Indian pharmaceutical companies were among the major losers?
Some of the notable stocks that traded lower were Sun Pharma, Biocon, Torrent Pharma, Dr Reddy’s, Cipla, Wockhardt, Zydus Lifesciences, IPCA Labs, Gland Pharma, Alkem Labs and Ajanta Pharma.
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Will the proposed US tariffs have an immediate impact on Indian drugmakers?
Brokerage firm Motilal Oswal said the impact is unlikely to be immediate because the tariff structure is expected to start only in 2028.
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What is the long-term outlook for Indian pharma companies despite US trade risks?
A few analysts remain constructive on quality pharma stocks, especially companies with strong domestic market share, raw-material manufacturing capabilities, advanced product pipelines and existing US manufacturing facilities.
Pharma stocks remained under pressure in Thursday's trade after US President Donald Trump outlined a phased tariff roadmap for imported generic medicines, raising concerns over the long-term outlook for exporters supplying the US market.
In a social media post, Trump said all generic drugs imported into the United States would continue to attract a zero per cent tariff for two years effective August 1, 2026. After that, such imports would face a 100 per cent tariff for one year, followed by a 200 per cent tariff thereafter.
"This is done in order to reshore generic pharmaceutical production into America, with a penalty to those companies that decide not to build plant and equipment within the stated period of time given to them. The objective of this policy is to protect the people of the United States," Trump said.
He added that the existing policy for patented, branded and innovative drugs would remain unchanged.
"Pharmaceutical facilities are being built, at a level never seen before, all over the United States of America," the US President said.
The announcement weighed on Indian pharmaceutical stocks, with most constituents of the Nifty Pharma index trading in the red. Among the notable losers were Sun Pharmaceutical Industries Ltd, Biocon Ltd, Torrent Pharmaceuticals Ltd, Dr Reddy's Laboratories Ltd, Cipla Ltd, Wockhardt Ltd, Zydus Lifesciences Ltd, IPCA Laboratories Ltd, Gland Pharma Ltd, Alkem Laboratories Ltd and Ajanta Pharma Ltd.
However, Motilal Oswal Financial Services Ltd (MOFSL) said the proposed tariff plan is unlikely to have an immediate impact on Indian drugmakers.
"Indian companies export significant generic medicines to the United States market. The proposed tariffs are set to begin in 2028, offering a two-year window," the brokerage said.
According to MOFSL, the transition period provides Indian pharma companies time to diversify export destinations and adjust their business strategies.
The domestic brokerage also noted that once the tariffs come into force, the burden is likely to be felt by US consumers and insurers through higher healthcare costs.
Mayank Jain, market analyst at Share.Market by PhonePe, said, "The Indian pharmaceutical sector is navigating a sharp divergence between robust domestic fundamentals and emerging global trade risks. While the domestic market accelerates toward its strongest annual performance in five years, news of proposed United States trade tariffs on generic medicines sparked immediate selling pressure across major pharma stocks, testing investor sentiment.
Jain added, "While policy uncertainties surrounding US trade may introduce short-term volatility, the sector's broader trajectory remains anchored in solid fundamentals. Companies holding strong domestic market share, active raw-material manufacturing bases, and advanced pipelines in novel formulations are best positioned to navigate global supply chain shifts and sustain long-term growth."
Prasenjit Paul, Fund Manager at 129 Wealth & Research Analyst at Paul Asset, noted, "Indian drugmakers with existing manufacturing facilities on US soil stand to gain a competitive edge over international rivals if trade rules tighten. Consequently, we treat any correction in quality pharma stocks as a buying opportunity. Our bullish view on selected pharma stocks over the last 3-4 months remains unchanged, with pharma continuing to be our top sectoral bet for 2026."
Notably, the US is the largest export market for India's pharma industry, particularly for generic medicines.