Nifty Pharma sinks as Trump readies 100% drug tariffs

Indian pharmaceutical stocks tumbled on Thursday after reports that the Trump administration is preparing to impose tariffs of up to 100% on drugmakers that have not reached agreements with the White House to guarantee lower prescription drug prices in the United States. The Nifty Pharma index fell as much as 3.8%, sharply underperforming the benchmark Nifty 50, which dropped 2.1%.

The sell-off was triggered by a report in The Financial Times, which said the levies could be announced as early as Thursday and would target companies that have not struck deals with the administration. Reuters confirmed that companies not in negotiations with the White House would face the full 100% tariff, though the plans are not final and exemptions for some medicines and disease categories remain possible.

Broad-based losses across sector
Biocon led the decline in the Nifty Pharma index, falling more than 5%. Glenmark Pharmaceuticals, Aurobindo Pharma, Sun Pharmaceutical Industries, and Ipca Laboratories each dropped more than 4%. Other major names including Cipla, Dr Reddy's Laboratories, and Divi's Laboratories also traded lower as the sector faced broad selling pressure.

India supplies roughly 40% to 50% of all generic drugs consumed in the US, making the American market a critical revenue driver for domestic drugmakers. The US is the world's largest pharmaceutical market, and sales there represent a major share of consolidated revenue for Indian firms.

Long-running tariff saga
The latest threat stems from a national security investigation under Section 232 of the Trade Expansion Act of 1962, which was initiated in April 2025. Unlike the "Liberation Day" tariffs that were struck down by the Supreme Court in February 2026, Section 232 tariffs rest on an independent legal foundation and remain unaffected by that ruling.

The Trump administration first imposed a 100% tariff on branded and patented drug imports in October 2025, while exempting generic medicines. A subsequent trade agreement in early 2026 reduced tariffs on Indian pharmaceutical exports from 50% to 18%. The new measures being prepared this week appear aimed at tightening the screws further -- using tariffs as leverage to force drugmakers into pricing and investment agreements with the White House.

For Indian pharmaceutical companies, the stakes remain high. While generics have so far been largely shielded, the sector's sensitivity to any shift in US trade policy was on full display Thursday, as investors weighed the risk that the scope of tariffs could eventually widen.