Pharma Stocks Rise as US Exempts Certain Specialty Drugs from Tariffs

Pharma stocks ended on a strong note on Tuesday following the announcement by the US that some speciality drugs and their raw materials imported from India have been excluded from tariffs. 

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Over half of the listed pharma stocks were in green despite the bearishness prevailing in the overall market. The Nifty Pharma Index advanced by 0.6%. 

The exemption applies to medicines used for rare medical conditions and covers products imported from India along with 19 other countries. The list includes nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapies, antibody-drug conjugates and medical treatments used against chemical, biological, radiological and nuclear threats. 

Other specialty pharmaceutical products and medicines used for animal health have also been included. 

Dr Reddy’s Laboratories, Lupin and Zydus Lifesciences are among the Indian drugmakers with a presence in specialty pharmaceuticals covered by the development. 

Dr Reddy’s shares rose more than 2% to a one-month high of ₹1,247.70. The stock was heading for its third straight session of gains and had climbed nearly 4% over the three-session period. 

Other large pharmaceutical stocks also moved higher. Sun Pharmaceutical Industries gained nearly 1%, while Cipla was up around 0.3%. Mankind Pharma rose more than 4.5%, making it the top gainer across both the Nifty 200 and Nifty 500 indices. 

The zero-tariff treatment extends beyond India to Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, the UK and Vietnam. 

According to the US Commerce Department document cited in the report, qualifying pharmaceutical products from these markets may receive zero-tariff treatment because the countries have an existing or forthcoming trade and security framework agreement with the United States. 

The exemptions form part of the implementation of US President Donald Trump’s April proclamation covering imports of pharmaceutical products and ingredients under Section 232 of the Trade Expansion Act.