Pharma Stocks In Focus As India Targets New Markets Amid Tariff Uncertainties

Pharmaceutical stocks will be in focus on Tuesday after reports emerged that India is preparing to boost pharmaceutical exports to Russia, the Netherlands, and Brazil.

The move is expected to reduce the industry's reliance on the United States, its largest market, amid uncertainties related to tariffs. Although drug exports are currently exempted from Donald Trump-imposed 50% tariffs on Indian goods, the sector remains exposed to unpredictable trade policies by the US.

200% Tariffs On Pharma Imports?

According to an Associated Press report, the Trump administration has proposed steep tariffs on imported medicines, which could go up to 200% on certain drugs. The report stated that the administration argued that the US needs to boost domestic drug manufacturing after the COVID-19 pandemic exposed heavy reliance on imports.

Impact On Indian Pharma Companies

The U.S. accounts for over a third of India's pharma exports, primarily driven by affordable generic versions of widely used drugs. Sales to the U.S. surged 20% in FY25 to nearly $10.5 billion. According to reports, Telangana is set to be the most affected state, as it accounts for 35% of India's pharmaceutical production and nearly 40% of the country's pharmaceutical exports, with the life sciences sector making up 60% of the state's total merchandise exports.

By contrast, exports in FY25 to Brazil, the Netherlands, and Russia stood at $778 million, $616 million, and $577 million, respectively, while the UK ranked as India's second-largest market with $914 million in sales.

Industry officials stated that India's strategy is not to replace the U.S. market, but rather to diversify its export destinations and capitalize on growth opportunities in Europe and Latin America. With existing production capacity, exports to newer markets could rise by up to 20%.

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