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Indian Pharma Sector Resilient Amid US Tariff Threats and Revlimid Patent Cliff
5 Sep
Summary
- Indian generics meet US demand for affordable medicines
- Uncertainty over US tariffs hurts investor confidence
- Revlimid patent loss impacts company margins
As of September 5th, 2025, India's pharmaceutical sector is expected to remain resilient despite the uncertainty surrounding potential US tariffs on imported drugs. The sector has been a significant contributor to India's overall pharmaceutical exports, with the US being the largest market, accounting for 34.5% of the country's $30.4 billion in pharma exports in the fiscal year 2025.
Top Indian drugmakers, including Dr. Reddy's, Aurobindo Pharma, Zydus, Lupin, and Cipla, generate a substantial portion of their revenues, ranging from 30% to 50%, from the US market. The industry experts believe that Indian exporters are likely to weather the tariff storm, either by avoiding tariffs due to their low-priced generics or by passing on the additional costs to consumers.
However, the uncertainty over the tariffs has been weighing on investor sentiment, with the Nifty Pharma index remaining flat over the last four weeks and falling over 6.5% since January 2025. The sector also faces challenges from the upcoming loss of exclusivity for the blockbuster drug Revlimid, which is expected to impact company margins and investor confidence.
Despite these headwinds, the long-term outlook for India's pharmaceutical sector remains positive, as the country's low-cost manufacturing and scale advantage in the production of generics and biosimilars continue to drive its exports to the US and other global markets.
