How will Trump's pharma tariff impact Indian firms? CDMO-based companies to benefit
&imwidth=600&imheight=450&format=webp&quality=medium "How will Trump's pharma tariff impact Indian firms? CDMO-based companies to benefit")
A sign of Swiss pharmaceutical giant Novartis is seen on the top of a building at Novartis Campus in Basel. Photograph: (AFP file)
Donald Trump's tariffs on pharma imports: The United States is the biggest export market for the Indian pharmaceutical industry. India exported pharmaceutical products worth $8.7 billion last year. However, analysts say tariffs may have a limited impact on Indian companies.
US President Donald Trump continued his tariff onslaught on the world, announcing tariffs of up to 100 percent on imports of branded and patented pharmaceutical drugs, starting October 1. The US President, who has adopted a protectionist economic policy ever since he became the president of the world's largest economy for the second time, said firms building manufacturing plants in America might be exempt from the crippling tariff.
Here's how India wouldbe impacted by the decision.
The United States is the biggest export market for the Indian pharmaceutical industry. India exported pharmaceutical products worth $8.7 billion (Rs 77,231 crore) in 2024. In the first half of this year, India exported $3.7 billion worth of pharma imports to the Donald Trump-led country.
However, analysts said Indian companies might not be impacted to a great extent because they export to the US generic drugs, not patented or branded products. Companies like Sun Pharma, Biocon, and Aurobindo might be negatively impacted as they sell branded drugs in the US market.
Analyst Nuvama said that three companies have exposure to the market affected by Donald Trump's tariffs. Sun Pharma (innovative medicines division $1.1 billion in FY25), Biocon (branded biosimilars less than $450 million in FY25), and Aurobindo (branded oncology drugs $100 million revenue in FY25) have exposure, reported Business Standard.
In the morning trade, in reaction to Donald Trump's tariff, Sun Pharma's stock was down 1.8 per cent, Biocon fell 2.56 per cent, and Aurobindo dropped almost 1 per cent.
Trending Stories
)
&im=FitAndFill=(700,400))
)
)
)
)
)
)
)
)
)
)
)
)
)
&im=FitAndFill=(700,400))
&im=FitAndFill=(700,400))
&im=FitAndFill=(700,400))
)
)
&im=FitAndFill=(700,400))
&im=FitAndFill=(700,400))
)
)
)
)
Jubilant Pharmovamay have a positive impact as it has contracted development and manufacturing organisation (CDMO). Alken is also setting up a CDMO. The demand for the products of these companies might improve due to the tariff.
Indian Pharmaceutical Alliance's Sudarshan Jain says it may not impact Indian exporters because Trump's order does not apply to generic medicines.
Nirali Shah and Udit Gupta of Ashika Institutional Research, however, said the uncertaintymight impact Indian exports later. They said that the next flashpoint could be the policy spillover into specialty or complex generic drugs.
Large foreign companies like AstraZeneca, J&J, Eli Lilly, Roche, Novartis, Sanofi, and AbbVie have announced capex plans to avoid tariffs.
US-based CDMOs will benefit from the tariff order.
The latest decision came as job creation in the US has shown limited growth. With the AI revolution, the job market is expected to be even tougher.