US Levies on Drug Imports May Cost Indian Cos $2.25 Billion

The sword of import tariffs wielded by US President Donald Trump has sent investors and markets scurrying for cover across the world and across industries.

- Jessica Jani

MUMBAI: On Wednesday, it was the turn of the pharmaceutical industry.

Trump's indication to impose a 25% tariff on pharmaceutical imports into the US sent the Nifty pharma index slumping 3% in early trade, although it recovered to close about 0.7% lower on Wednesday.

Stocks of large generic drug manufacturers slumped: Aurobindo Pharma, Dr. Reddy's, Zydus Lifesciences and Sun Pharmaceuticals, which have a strong presence in the US, slipped by up to 9.5%, 5.8%, 4.8%, and 3.2%, respectively, in intra-day trading.

The uncertainty was fueled by the heavy dependence on US exports for top Indian drug makers, which garner anywhere between 30% and 50% of their revenues from the American market. Also, the US is India's largest export market for pharmaceuticals.