Following Trump’s announcement of possible tariffs on pharmaceutical imports, pressure was applied to Indian pharmaceutical equities on February 19. Concerns over continued trade protectionist policies that affect international commerce caused the Nifty Pharma index to drop 3.2%, with Aurobindo Pharma and Lupin suffering significant losses.
Nifty Pharma Index Tanks over 3% on Trump’s 25% Tariff Threat:
Following President Donald Trump’s announcement that he would put levies on pharmaceutical imports, extending his continuing trade protectionist measures to key industries, Indian pharmaceutical stocks saw intense pressure during today’s session, February 19.
Due to poor performance in the December quarter, Indian pharmaceutical companies were already under a lot of strain, and profit booking had resulted from several equities’ high valuations. Analysts predict that these equities will continue to suffer until the tariffs on pharmaceutical imports are clarified, given the most recent tariff threats from the United States.
The Nifty Pharma index’s 20 members saw negative trading in 19, with Aurobindo Pharma and Lupin suffering the most significant losses at 6.2% and 4.5%, respectively. The index fell 3.2% early in the day, reaching its lowest point at 20,299.
Trump declared on Tuesday that he plans to slap car tariffs “in the neighborhood of 25%” and comparable charges on imports of pharmaceuticals and semiconductors. Sectoral tariffs on medicines and semiconductor chips will also begin at “25% or higher,” rising significantly over a year, he told reporters Tuesday at his Mar-a-Lago resort in Florida.
He stated that he intended to give semiconductor and medicine makers time to establish U.S. plants to avoid tariffs. Still, he did not provide a schedule for enforcing these taxes. Trump said he anticipates new investments in the US from some of the biggest corporations in the world in the upcoming weeks.
Since taking office last month, Trump has aggressively advanced his “Make America Great Again” agenda, emphasizing the defense of American citizens and companies. To protect American industry, his policies have prioritized bolstering domestic production, lowering import dependency, and implementing stronger trade regulations.
Trump has set a date for 25% tariffs on imported steel and aluminum, announced and subsequently postponed 25% tariffs on commodities from Mexico and non-energy imports from Canada, slapped a 10% tariff on Chinese imports, and plans reciprocal duties on any nations that impose import taxes on the United States.
Investors are nervous about the prospects for international trade, the possibility of retaliatory actions, the risk of slower economic growth, and increased inflationary pressures due to Trump’s string of tariff announcements intended to protect American industries and close the trade gap with other countries.
His trade policies also contribute to a surge in U.S. Treasury rates, which is drawing foreign investors away from riskier assets like stocks and into safer alternatives.
“President Donald Trump announced plans to impose 25% tariffs on imported automobiles, semiconductor chips, and pharmaceuticals on Tuesday, which will significantly impact global trade,” stated Dr. Ravi Singh, SVP of retail at Religare Broking. As a result, the Nifty Pharma Index dropped around 3% today, hitting a fresh low of 20300.
“Trump thinks this program will increase manufacturing in the United States. In response to the announcement, the Indian government has scheduled a bilateral meeting with the administration in Washington, D.C., to discuss trade with the United States further. According to studies, India barely provides 0.2% of automobiles to the United States. Still, the proposed levy will significantly impact Indian drugmakers, as 38% of medications are sent to the United States,” he continued.
