An index of Indian pharmaceutical firm shares slid 2% to its lowest degree in seven months on Wednesday after U.S. President Donald Trump stated he intends to impose tariffs of about 25% or greater on pharma imports.
Trump added that he needed to offer a while for drug and chip makers to arrange US factories so they may keep away from tariffs.(Representational picture/Pixabay)
Twelve of the 20 shares on the sub-index traded decrease. Solar Pharma, India’s prime drugmaker by income, fell 2%, and Dr Reddy’s slipped 4% to its lowest degree since June.
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Aurobindo Pharma tumbled 6% to its lowest degree in practically a 12 months, and Cipla, India’s no. 3 drugmaker, shed 2.2%.
The sub-index pared some losses and was buying and selling 0.7% decrease as of 10:44 a.m. IST.
Indian drugmakers earn a major share of income from the U.S., the most important importer of Indian pharma merchandise.
India’s pharma exports to the nation stood at $8.73 billion in fiscal 2024 – a virtually 16% enhance from earlier 12 months – accounting for about 31% of the trade’s general exports, as per knowledge from government-backed commerce physique Prescription drugs Export Promotion Council of India (Pharmexcil).
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Trump’s tariff plans are making traders jittery for the time being, as most of those firms depend on the U.S. for many of their income, stated Shrikant Akolkar, a pharma analyst with Nuvama Institutional Equities.
The U.S. President on Tuesday advised reporters that sectoral tariffs on prescribed drugs and semiconductor chips would start at “25% or higher”, rising considerably over the course of a 12 months, however didn’t present a date for the announcement of the duties.
Trump added that he needed to offer a while for drug and chip makers to arrange U.S. factories so they may keep away from tariffs.
“Even if these companies start setting up manufacturing within U.S. borders, it is a long way to go as they would need fresh approvals and also labour which is costlier in the U.S. compared to India,” Akolkar stated.
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Earlier this week, Solar Pharma MD Dilip Shanghvi advised ET Now that tariffs, if imposed, will probably be handed on to customers.
Pharma shares have misplaced about 12% up to now this 12 months, whereas the benchmark Nifty 50 declined 4%.