- US to impose escalating tariffs on imported generic drugs.
- Move aims to reshore pharmaceutical production to America.
- Indian pharma stocks fell significantly due to tariff concerns.
Pharma stocks fell after US President Donald Trump announced hefty tariffs on imported generic drugs from August 2028. He stated that the move was aimed at offshore production of such drugs. This move could impact India, the largest exporter of generic drugs to the US. Meanwhile, the key domestic equity indices were trading sharply lower due to selling pressure.
Aurobindo Pharma Leads Decline
On the BSE, Aurobindo Pharma fell 4.13 per cent, Glenmark Pharma 3.26 per cent, Biocon 3.18 per cent, Cipla 2.54 per cent, Sun Pharma 1.91 per cent, Dr Reddy's Labs 1.86 per cent, and Torrent Pharma 1.38 per cent.
In a post on Truth Social, Trump stated that starting August 1, the U.S. will impose a zero per cent tariff on all generic drugs imported into the country for two years, then increase it to 100 per cent for one year, and then to 200 per cent.
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"Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for two years, after which the TARIFF will be raised to 100 per cent for one year, and 200 per cent thereafter," Trump said.
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"This is done 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," Trump said.
The president said the objective of this policy is to protect the people of the United States.
"Renewed concerns over potential US tariffs on generic pharmaceutical imports weighed on investor sentiment. The pharmaceutical sector led the decline, falling nearly 2 per cent in early trade," Ponmudi R, CEO of Enrich Money, said.
(Disclaimer: With Inputs From PTI)