Employees work at the pharmaceutical plant of Lupin, India's No. 2 drugmaker, in Verna, in the western state of Goa, India.
Credit: Reuters photo
Indian pharmaceutical stocks fell 2 per cent on Friday after US President Donald Trump announced a 100 per cent tariff on imports of branded and patented drugs, effective October 1.
The US is India's largest market for pharmaceutical exports, accounting for over a third of the total volume, mostly of cheaper generic drugs.
Of the 20 index constituents, 18 traded in the red as of 2:37 pm IST.
Analysts described the decline as "sentimental", noting that India's exports to the US are primarily generic medicines, which may not be affected by the tariffs.
Sun Pharmaceutical Industries, India's largest drugmaker by revenue and the heaviest stock on the index, fell about 3 per cent. Sun Pharma markets patented drugs, including Ilumya, a psoriasis treatment approved by the US FDA.
The company also has a contract manufacturing unit through EU partners for specialty drugs, where a 15 per cent tariff applies to EU exports to the U.S., according to Vishal Manchanda, equity analyst at Systematix Group.
"The impact on Sun is not very meaningful," he said. "It may be between 1 per cent to 3 per cent of EBITDA."
Laurus Labs declined the most among constituents of the index, down about 6 per cent.
"There is a general worry that CDMO (contract drug manufacturing organisations) might be impacted as the US moves manufacturing in-house," Manchanda added.
Biocon, which makes complex biosimilars for cancer treatment and has significant U.S. exposure, is down about 4.6 per cent.
"Uncertainty remains whether complex generics and biosimilars will face future tariffs," ICICI Securities analyst Pankaj Pandey said in a note on Friday.