Trump tariff hunt eyes India's last stock market refuge but it won't be an easy kill

Donald Trump’s tariff tantrums on April 2, are now nursing their wounds. The Nifty Pharma index tumbled 4% on Friday, slamming the brakes on a relief rally that lasted less than 24 hours. Investors who had rushed into stocks like Laurus Labs, Aurobindo Pharma, Lupin, Biocon, Gland Pharma and Cipla watched them fall between 5% and 7% in a single session.

The shock came courtesy of Trump’s chilling declaration: Pharma tariffs are “going to be starting to come in… at a level that you haven't really seen before.” The announcement, he said, is “under review right now” and will be made “in the near future.”

This threat directly targets a segment that’s long been considered untouchable. After all, India’s pharma exports to the US stood at a robust $12.8 billion in 2024, and big players like Sun Pharma, Dr. Reddy’s, Zydus, Aurobindo, and Gland Pharma have substantial exposure to the American market.

But this won’t be an easy war to wage. Analysts say it’s like trying to cut a lifeline and expecting the patient to survive. Any tariff increase would eventually hit US consumers because there is simply no other country that can manufacture quality drugs at India’s scale and cost.

Indian pharma companies, Nuvama notes, dominate with a 47% share in approved ANDAs and 51% in tentatively approved ones for 2025. They're not just suppliers; they're the scaffolding holding up the US generics market.

Live Events

And it’s not just about numbers. According to Nuvama, “As generics provide > $ 400 billion in annual savings to the US