US tariffs on pharmaceutical imports by the US President Donald Trump have sparked concerns within India’s pharma sector, a global leader in affordable generic drug supplies.
In an exclusive interaction with ETNow, Vishal Manchanda, an analyst at Systematix Group, shared his expert insights on the possible outcomes for Indian drugmakers, underscoring both the risks and opportunities that await investors monitoring key pharma stocks such as Sun Pharma, Cipla, and Dr. Reddy’s Laboratories.
Manchanda stressed that tariffs would have far-reaching consequences for both countries. He pointed out that the United States, with limited domestic manufacturing capacity, relies heavily on Indian generics for affordable healthcare.
“Tariffs, if imposed, will be harmful to both countries. The US lacks the capacity for domestic production, and no alternative matches India’s cost-efficient supply of generics,” he stated.
The outlook for Indian pharmaceutical stocks presents a mixed scenario.
Manchanda highlighted that leading firms like Sun Pharmaceutical, Cipla, and Dr. Reddy’s Laboratories could face headwinds in FY27, with pricing pressures and margin erosion likely to dent US market earnings.
However, despite these challenges, India’s domestic market remains robust, with a projected growth of 9% annually. Emerging markets are also expected to expand by 8-11%, offering a buffer against US slowdowns.
To reduce dependence on the US market, Indian pharma companies are actively exploring new avenues. Manchanda noted increased investments in biosimilars, complex generics, and digital healthcare solutions to diversify revenue streams and reduce US exposure.
While potential US tariffs may pose short-term profitability risks for Indian exporters, strong domestic demand and global diversification strategies could drive long-term sector growth.
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