Cipla, Laurus Labs, Granules India: Pharma shares rise up to 7% after Trump announces 90-day pause on tariff

Shares of pharma companies zoomed nearly 5% during the early trades on Friday, April 11, following the suspension of additional tariffs for 90 days, till July 9, by the US. The 10% baseline tariff imposed on the countries will continue to remain in place.

The Nifty Pharma sector rallied 2.37% on Friday.

The US President on April 3 imposed a 26% tariff on India but excluded some goods from the ambit of the reciprocal tariffs. The list includes copper, pharmaceuticals, semiconductors, lumber articles, gold, energy, and other certain minerals.

However, later Trump said, "Pharma tariffs are going to come in at levels you have never seen before. We are looking at pharmaceuticals as a separate category. We will be announcing that sometime in the near future and not too distant future. It’s under review right now.”

The US accounts for a third of India's overall pharma exports. Indian pharmaceutical companies supply a substantial proportion of drugs to US residents, with four out of ten of all prescriptions filled in the US in 2022 being supplied by Indian companies.

Abbott India, JB Chemical Pharma, Torrent Pharma, Mankind and Gland Pharma shares also jumped as much as 0.84% on NSE.

Commerce and Industry Minister Piyush Goyal, in a meeting with industry and exporters on April 9, asked exporters not to panic and assured them that India is working on the "right mix and right balance" in its proposed trade agreement with the US. He said the Indian team is working with "speed" but not in "undue haste" to ensure the right outcome for the country.

Meanwhile, in a report dated April 10, JM Financial said BFSI, IT, Oil & Gas, Auto and Pharma remained the top 5 sectors wherein foreign institutional investors (FIIs) held equities in India, adding up to ~60% of FII holdings in India.

As a percentage of FII assets under custody (AUC) in India, the share of BFSI rose marginally to 31.2% from 30.8% in Feb 25, while that of Pharma rose from 6.8% to 6.9%, the report further said.

The pharma sector witnessed an inflow of $15 million from foreign investors.