Indian markets - and pharma stocks - still steady after Trump's 200% tariff threat

Dubai: Share prices of Indian pharmaceutical companies – and especially those with high export volumes – are coming under investor spotlight after the latest tariff threat from US President Trump. Of eye-watering import duties of 200% on pharma shipments into the US.

While the threats are not targeted at Indian pharmaceutical companies in particular, this will strike a deep sense of concern among them and their shareholders.  

“Several leading Indian pharma companies — including Syngene, Gland Pharma, Biocon, Dr. Reddy’s, Zydus, and Aurobindo — derive over 40% of their revenue from the US market,” said Milan Vaishnav, founder of ChartWizard.ae.

“Such heavy dependence makes them highly vulnerable to any abrupt trade action.”

India’s main stock index, Sensex, hasn’t gone into a swoon so far, trailing by 141 points, or 0.17% down, at around 9am UAE time. But the unease is there, and that’s apparent among UAE based NRI investors with significant exposures to the Indian stock markets.

India is one of the countries inching closer to a trade deal with the US, which will significant reduce the tariff load on shippers. But whether the deal also accounts for India’s pharma exports to the US is not clear.

Indian generic medicines make up a sizable share of ‘affordable medicines for American consumers, helping reduce healthcare costs’, said Vaishnav.

“Imposing such steep tariffs risks not only disrupting global supply chains but also inflating drug prices in the US.  

“Both nations have a strategic healthcare partnership to preserve — and the consequences of disrupting it could be costly for industry and public health alike.”

How are Indian pharma stocks faring

The year-to-date performance of Indian pharma stocks that have major reliance on US exports have not been 'impressive so far'.

The best performers, Biocon and Gland have returned positives of 'just 5.87% and 4.73%'.

Zydus Lifesciences has stayed flat, Auropharma and Syngene have been the 'worst performers losing 14.87% and 25.46% on a year-to-date basis'.