Indian pharmaceutical stocks fell on Thursday after US President Donald Trump signed an order imposing a 100% tariff on certain patented drug imports and their active ingredients. The new measure targets branded pharmaceutical products and adds fresh pressure on export-linked drugmakers. Generic medicines remain exempt for now, but the order still triggered a broad selloff across the sector.
The Nifty Pharma index recorded its fourth straight session of losses on 2 April, 2026. It dropped as much as 4% during intraday trade before narrowing the fall and ending the day about 0.9% lower. Nineteen of its 20 constituents traded in the red, showing how widely the order affected investor sentiment.
Several major companies posted notable declines during the session. Biocon fell as much as 4%, while Torrent Pharmaceuticals dropped 3.67%. IPCA Laboratories declined 3.83%, and Sun Pharmaceutical Industries fell as much as 2.45%. Divi’s Laboratories also closed lower as the sector reacted to the tariff announcement.
The decline reflected concern over India’s exposure to the US drug market. India remains a major supplier of medicines to the United States, and any trade action tied to pharmaceuticals tends to weigh heavily on listed drugmakers. Although the order focuses on patented products, investors moved quickly to price in a wider risk to the sector.
The tariff order was issued under Section 232 of the Trade Expansion Act of 1962. It imposes a 100% duty on certain branded drug imports unless manufacturers meet conditions tied to pricing and US production. Large companies have 120 days to comply, while smaller and medium-sized firms have 180 days.
Drugmakers can reduce the tariff rate to zero through January 2029 if they sign “Most Favoured Nation” pricing agreements with the Department of Health and Human Services and make onshoring commitments with the Department of Commerce. Companies that make only onshoring commitments will face a lower 20% tariff instead of the full 100% duty.
A senior US administration official said large companies had “plenty of warning” before the measure was finalized. The White House said the policy is designed to bring more pharmaceutical manufacturing into the United States while also pressing companies to lower some medicine prices through direct agreements.
Generic drugs, biosimilars, and related ingredients are exempt from the new tariffs. That gives Indian exporters some immediate relief because generic products account for the bulk of India’s pharmaceutical shipments to the United States. India also supplies about 47% of all generic prescriptions filled in US pharmacies, based on IQVIA data cited in the reporting.
Still, the order does not remove uncertainty. It says the exemption for generic drugs “will be reassessed in one year,” leaving open the possibility of future action. That clause kept pressure on Indian pharma shares even after traders noted that the current order does not cover the core generic business.
Earlier concerns over that possibility have returned to focus. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, had warned during an earlier phase of tariff threats that "perhaps the president's next target can be generic drugs." This decision may have a sentimental impact on pharmaceutical stocks.” The formal order revived those fears in the market.
Several large Western drugmakers have already moved to reduce their tariff exposure. Pfizer and AstraZeneca secured multi-year exemptions through pricing agreements and production commitments. Eli Lilly, Johnson & Johnson, and Merck have also announced major plans to expand manufacturing in the United States.
The US administration has also preserved lower tariff treatment under separate arrangements with key partners, including the European Union, Japan, South Korea, Switzerland, and the United Kingdom. Those arrangements either cap branded drug tariffs or keep them at zero for a limited period.
For Indian companies, the immediate concern is not a direct hit to generic drug exports but the risk of further policy changes. The one-year review clause means the sector is likely to remain sensitive to any new signals from Washington.