CLSA has flagged heightened uncertainty for Indian pharmaceutical companies following former U.S. President Donald Trump’s announcement of a 25% tariff on all Indian goods exported to the U.S., effective August 1. While the industry remains hopeful that pharmaceutical products—particularly generic drugs—will be exempt, clarity is still awaited due to the ongoing Section 232 investigation.
According to CLSA, most pharma companies are operating under the assumption that generics will not be covered under the new tariff slab. However, in the event that these products are not excluded, companies intend to offset the impact by passing on the additional costs through price hikes.
The brokerage highlighted key pharma stocks with high exposure to the U.S. market:
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Aurobindo Pharma (48% of revenues from U.S.)
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Zydus Lifesciences (47%)
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Dr Reddy’s Laboratories (46%)
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Lupin (38%)
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Sun Pharma (33%)
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Cipla (30%)
CLSA’s analysis underscores the sector’s vulnerability to U.S. trade policy shifts, even as firms prepare strategic responses to mitigate potential disruptions.
Disclaimer: The views expressed in this article are based on brokerage reports and do not constitute investment advice. Please consult your financial advisor before making any investment decisions.
