Nifty Pharma Rises Over 1%: Mankind Pharma, Dr Reddy’s, Gland Pharma, Lupin Gain On 100% US Tariff Exemption
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Indian pharmaceutical stocks gained after the latest US trade policy clarification reduced tariff uncertainty for a defined set of speciality medicines and drug ingredients. The development brought US-exposed pharma companies back into focus, with gains extending across several major counters.
Nifty Pharma rose over 1% on Tuesday, September 29, after the US exempted certain speciality pharmaceutical products and associated ingredients imported from India from a new 100% tariff. Mankind Pharma, Dr Reddy’s Laboratories, Gland Pharma, Lupin, Sun Pharma and Aurobindo Pharma were among the pharma stocks in focus.
The Nifty Pharma index gained 1.01% to hit an intraday high of 27,032.40, outperforming the broader market, which remained under pressure. The index had closed 0.89% lower in the previous session.
The US Commerce Department has included India among 20 countries and jurisdictions eligible for zero-tariff treatment on qualifying speciality pharmaceutical products. The exemption comes as the US begins implementing a 100% tariff on specified patented pharmaceutical products and associated ingredients from September 29.
Pharma stocks
Mankind Pharma, Dr Reddy’s Laboratories and Gland Pharma shares gained in Tuesday's trade, while Lupin was also among the pharma stocks that moved higher following the US tariff announcement.
Sun Pharmaceutical Industries and Aurobindo Pharma were also in focus as investors assessed the potential impact of the exemption on Indian drugmakers with exposure to the US market.
The US exemption covers certain speciality medicines, including drugs used for rare diseases and infertility, as well as cell therapies, gene therapies, antibody-drug conjugates and certain animal pharmaceuticals. The associated components of these products are also eligible for the zero-tariff treatment.
However, the move does not amount to a blanket exemption for Indian pharmaceutical exports. Generic pharmaceutical products and their associated ingredients are already outside the Section 232 pharmaceutical tariff regime, according to the US Commerce Department notice.
US tariff exemption
India is among 20 countries and jurisdictions covered by the zero-tariff arrangement for qualifying speciality pharmaceutical products. The list also includes the European Union, Japan, the UK, South Korea and Switzerland.
The 100% tariff was introduced under Section 232 of the US Trade Expansion Act and applies to specified patented pharmaceutical products, biologics and associated ingredients. The US administration has said the tariff framework is aimed at encouraging greater pharmaceutical production in the country.
For Indian pharmaceutical companies, the latest decision removes tariff exposure for the specified eligible speciality products, while the broader impact will continue to depend on the individual company's product mix and exposure to the US market.
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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