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India Pharma: Tariff Relief Sparks Varied Impact
2 Oct
Summary
- US tariff relief offers mixed benefits for Indian drugmakers.
- Generic drugs largely remain unaffected by US tariff changes.
- Specialty drugs and contract manufacturing see varied impacts.
The recent US pharma tariff relief brings varied implications for Indian drugmakers, contingent on their specializations in patented medicines, generics, injectables, or contract manufacturing. Companies such as Sun Pharma, Gland Pharma, and Piramal Pharma are experiencing effects ranging from direct tariff reductions to enhanced protection for customer orders and potential advantages for newly exempted specialized products.
Industry experts note that generic drugs are largely insulated from these tariff shifts, with the primary impact concentrated on specialty medicines. Bharat Celly, an analyst at Equirus Securities, highlighted that US generic medicines are crucial for cost reduction, making tariffs on them unlikely. However, specialty drugs, rare disease treatments, and cell/gene therapies are now included in a duty-free list covering 19 countries, benefiting India over China for contract manufacturing.
Sun Pharma faces direct exposure through its patented US medicines, valued over $1.1 billion, with a secured zero rate until January 2029. Gland Pharma, heavily reliant on US complex injectables, and Zydus Lifesciences, with significant generic and specialty businesses, also see benefits. Piramal Pharma gains through customer order clarity and ADC inclusion on the duty-free list, while Syngene International anticipates future benefits from its ADC facility.
Divi's Laboratories benefits from its global pharmaceutical customers securing zero rates, reducing risk in its order book. Aurobindo Pharma and Zydus Lifesciences, with substantial US generic operations, continue to navigate trade policy, with a key upcoming review by the US Commerce Department by April 2, 2027, to determine if tariffs could extend to copy medicines.
