New Delhi: Shares of Indian pharmaceutical companies, including Aurobindo Pharma, Laurus Labs, IPCA Laboratories, and Lupin have fallen by as much as 8% on Friday after comments from U.S. President Donald Trump, who said that tariffs on the sector were approaching.
Speaking to the media, Trump said that his administration was contemplating possible tariffs on pharmaceuticals. Indicating that trade measures would be coming he said, “Pharma is going to start coming in at a level that you have not seen before.”
He further said that pharmaceuticals would be considered as a separate category for tariffs. He said that an announcement could be expected soon. He further added, “We are looking at pharma as a separate category. We will be announcing that sometime soon—not in the distant future”.
Pharma stocks slide to 8 per cent
The comments from the U.S. president came just a day after pharmaceutical stocks rallied, driven by anticipations that the sector would be excused from trade limitations. On Thursday, the Nifty Pharma index rushed by 2.3%, with IPCA Laboratories rising by 4.6%. Other companies such as Lupin, Sun Pharmaceutical, and Cipla also saw increases going from 3% to 4%.
Trump disclosed the tariff plan on April 2 referred to as “Liberation Day”. It also introduced a broad 26% tariff on Indian imports. The U.S. administration asserts this rate is half of what India effectively sets American businesses, taking into account trade barriers as well as currency practices.
In the beginning, pharmaceuticals were not included in the list of items subject to reciprocal tariffs, as noted in a White House fact sheet. It stated, “Certain goods will not face the Reciprocal Tariff, which includes copper, pharmaceuticals, semiconductors, and lumber.”
