Pharma Stocks Climb Despite Trump's 200% Tariff Warning; Lupin, Biocon Lead Gains

In a surprising market turn, Indian pharmaceutical stocks gained on July 9, 2025, despite fresh warnings from U.S. President Donald Trump about steep import tariffs on medicines. Trump hinted at a potential 200% duty on pharmaceutical imports into the U.S., sending ripples across the global drug industry.

Trump stated that drug manufacturers would have a year to relocate their operations to the U.S., after which new tariffs would be enforced. "They're going to be taxed at a very, very high rate," he said, reaffirming his protectionist stance on imported pharmaceuticals.

Investors Shrug Off Tariff Threat
Despite the threat, Indian pharma counters saw positive movement. The Nifty Pharma Index was up 0.4% at 22,252.50 during early trading. Lupin rose by 1.5%, followed by Biocon, which gained 1.18%. Aurobindo Pharma and Laurus Labs also posted moderate increases.

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Lupin led the surge partly due to its recent agreement with Zentiva for licensing and supplying its biosimilar drug, Certolizumab Pegol. The biosimilar is used for conditions such as rheumatoid arthritis and Crohn's disease, helping the company expand its global footprint.

Mixed Sector Performance
Not all pharmaceutical stocks shared the upbeat sentiment. IPCA Labs, Zydus Life, and Dr. Reddy's saw slight declines, with sector sentiment weighed down by broader tariff concerns and recent analyst downgrades.

Brokerage firm Macquarie recently lowered its price targets on multiple pharmaceutical firms, including Dr Reddy's and Aurobindo Pharma, contributing to recent selling pressure. Still, the overall investor sentiment seemed resilient on July 9.

Indian Pharma's U.S. Exposure
India's pharmaceutical industry remains deeply tied to the U.S. market. Nearly 31% of India's $27.9 billion pharma exports in FY24 went to the United States. Any tariff escalation would directly impact revenues and profitability, especially in the generics segment, where margins are already under pressure.

Analysts say the added cost burden could make it unviable for companies to continue supplying certain products unless they are allowed to raise prices in the U.S. Alternatively, production halts could lead to medicine shortages in American markets.

GST Relief in Focus
Separately, pharma firms are also watching the upcoming GST Council meeting, which is expected to discuss potential relief on Input Tax Credit (ITC) for free drug samples provided to hospitals and doctors. Currently, ITC claims on such samples are not permitted, affecting profitability and marketing strategies.

Conclusion

Despite the possibility of major trade disruptions and impending geopolitical threats, investors appear confident in the Indian pharmaceutical industry's ability to adapt. Investor confidence in the long-term strength of Indian pharmaceutical exports is demonstrated by the advances made by companies such as Lupin, Biocon, and Aurobindo Pharma, despite the gravity of Trump's tariff warning.