The Indian pharmaceutical sector, represented by the CNXPHARMA index, saw a decline of 1.7% on June 14, with 19 out of its 20 constituents trading in the red. This comes as the index has lost around 7.6% over the past two weeks, due to uncertainty surrounding US tariffs on pharmaceutical imports. President Donald Trump’s plans to impose a minimum 25% tariff on pharmaceutical imports from India, its biggest market, have put pressure on the sector.
Indian drugmakers are hoping that discussions between the US and India will help mitigate the threat of tariffs, according to a trade association. Citi Research, however, expects Indian pharma companies to remain volatile and potentially face further pressure due to the US tariff threat. The research firm recommends investing in drugmakers with lower exposure to the US generics market, such as Divi’s Laboratories, Sun Pharma, and Torrent Pharma.
The CNXPHARMA index has been one of the worst-performing sectors, dropping by 2% for the week, compared to the Nifty’s 0.6% decline. This suggests that the sector has been severely impacted by the ongoing uncertainty. The tariff threat has created a challenging environment for Indian pharma companies, which are now facing significant headwinds. As the situation remains fluid, investors are advised to remain cautious and carefully monitor the developments to make informed decisions.