Indian pharmaceutical stocks tumbled sharply on Tuesday, June 17, after US President Donald Trump warned that tariffs on pharmaceutical imports would be imposed “very soon.” The Nifty Pharma index slumped over 2 percent to a day’s low of 21,516.95, making it the worst-performing sector of the session. This latest development triggered widespread selling, with fears of revenue disruption for Indian drugmakers heavily reliant on the US market.

Trump’s Tariff Threat Roils Market Sentiment

The primary trigger for the sell-off was President Trump’s statement to reporters that his administration would soon roll out tariffs specifically targeting pharmaceutical imports. This comes just weeks after he first hinted at such a move in April. Market participants fear that Indian drugmakers, which export a significant portion of their generics and specialty medicines to the US, could be severely impacted.

According to Avinash Gorakshkar, Head of Research at Profitmart Securities, key companies like Lupin, Aurobindo Pharma, Cipla, Dr. Reddy’s Laboratories, and Zydus Lifesciences are expected to face considerable pressure. “These companies derive a large chunk of their earnings from the US, and any tariff imposition could dent margins and impact future guidance,” he said.

Broad-Based Sell-Off Across Pharma Counters

The impact was broad-based across the pharma index. Shares of Aurobindo Pharma, Lupin, and Granules India emerged as the top losers, declining over 3 percent each. Other notable losers included Natco Pharma, Laurus Labs, Divi’s Labs, Sun Pharma, and Dr Reddy’s Laboratories, all of which fell over 2 percent.

Pharma majors like Zydus Lifesciences, Glenmark Pharma, Ajanta Pharma, Cipla, Biocon, Alkem Labs, and IPCA Laboratories also saw cuts of over 1 percent, reflecting deep investor concern. The index has now posted losses in three out of the last four trading sessions, highlighting sustained pressure in the sector.

Tariff Tensions Have Been Building Since April

This is not the first time Trump’s rhetoric has impacted pharma stocks. In early April, when he first floated the idea of pharmaceutical tariffs, markets had already reacted with concern. At the time, Trump had said, “The pharma [tariffs] are going to be starting to come in at, I think, a level that you haven’t really seen before.” The lack of clarity since then had temporarily stabilized investor sentiment, but the latest statement has reignited anxiety.

Notably, Trump had previously set July 9 as the deadline for new tariffs to take effect, giving companies limited time to reassess their strategies. While pharmaceuticals were initially kept out of the general reciprocal tariff list, the latest remarks signal a policy shift that could directly impact Indian exports.

Geopolitical Overhang Adds to Uncertainty

The renewed trade tensions come on the heels of Trump’s abrupt departure from the G7 summit in Canada and speculation around his foreign policy approach. He denied rumours of brokering a ceasefire between Israel and Iran, stating that he was “planning something much bigger.” The pharma tariff announcement, which followed closely on the heels of that denial, may be part of a broader strategic shift ahead of the upcoming US elections.

Overall, with US President Donald Trump reaffirming his intent to impose tariffs on pharmaceutical imports, Indian pharma stocks are under renewed pressure. The Nifty Pharma index’s sharp decline reflects investor fears of margin compression and revenue headwinds for companies with significant US exposure. As the July 9 deadline for tariff implementation nears, volatility in the sector is expected to remain high. Investors will be closely watching for further policy signals from the US administration and guidance from impacted companies in the coming weeks.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.