Gland Pharma, Sun Pharma, Cipla: Pharma stocks zoom up to 10% on tariff relief; NIFTY PHARMA index surges 4.5%

The list includes copper, pharmaceuticals, semiconductors, lumber articles, gold, energy, and other certain minerals.

The list of tariffs was announced by US President Donald Trump on Wednesday, April 2.

In the opening deals, the NIFTY PHARMA index jumped as much as 4.54% to 21,904.15 levels.

Out of 20 constituents, 19 were trading in the green.

The biggest gainer was Gland Pharma (up nearly 10%), followed by Aurobindo Pharma (up 7.22%), Dr Reddy's (up 5.83%), and Zydus Life (up 5.33%).

Other notable gainers were Divi's Labs, Sun Pharma, Mankind Pharma, and Cipla.

The White House statement read, "Some goods will not be subject to the Reciprocal Tariff. These include (1) articles subject to 50 USC 1702(b); (2) steel/aluminium articles and autos/auto parts already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductors, and lumber articles; (4) all articles that may become subject to future Section 232 tariffs; (5) bullion; and (6) energy and other certain minerals that are not available in the United States."

Before the Wednesday announcement, there were fears that the imposition of tariffs would impact the domestic pharma companies severely.

Deepak Jotwani, VP & sector head, corporate ratings, ICRA Limited, recently said that any material imposition of tariffs by the US government on the Indian pharma companies will elevate their cost of sales for the US market and also impact their competitive positioning to some extent.

Foreign broking firm Jefferies had said that if the US applies reciprocal tariffs, it will at best be 10% on imported Indian medicines to the US. It expects pharma companies will aim to pass on tariff increases to payors. If the costs aren’t passed onto the end patients, then the entire supply chain will have to partly absorb the impact. Key players in the US supply chain are retailers or distributors, formulation manufacturers and API or KSM suppliers to manufacturers.

On Wednesday, the NIFTY Pharma index ended at 20,952.85, up 181.05 points, or 0.87%.

What India says on the US move

The US administration has exempted pharmaceuticals from reciprocal tariffs, underscoring the critical role played by generic medicines globally, Indian Pharmaceutical Alliance (IPA) Secretary General Sudarshan Jain said on Thursday.

The decision underscores the critical role of cost-effective, life-saving generic medicines in public health, economic stability, and national security, Jain said in a statement.

India and the US share a strong and growing bilateral trade relationship, with a shared vision to double trade to $500 billion under the Mission 500 initiative, Jain stated.

IPA is a network of the top 23 Indian pharma companies, including the likes of Sun Pharma, Dr Reddy's Laboratories, Lupin, Torrent and Glenmark.

The pharmaceutical sector, India's largest industrial export, was estimated at $12.72 billion in 2024.

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.