Nifty Pharma plunges 6% as US tariff fears hammer exports; Gland Pharma, Divi's Labs tumble 11%

The Nifty Pharma index crashed nearly 6 per cent on Monday, April 7, as fears of renewed US tariffs on generic drug exports triggered a broad selloff in the sector.

The index dropped to 19,425 in early trade, led by steep declines in key exporters like Gland Pharma, Divi’s Laboratories, and Laurus Labs, all of which tanked over 11 per cent intraday.

The sharp fall comes amid rising concerns that the United States may impose steep reciprocal tariffs on Indian pharmaceutical imports, particularly generics. This move, if executed, could significantly raise drug costs for US consumers while directly hitting India’s pharma exporters, who dominate the global generics market.

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India’s pharma exports to the US, its biggest market, are largely composed of low-cost generic formulations.

Any import tariffs could hurt competitiveness, strain supply chains, and delay approvals for newer filings, analysts warned.

Gland Pharma was the worst hit, sliding over 11.4 per cent, followed by Divi’s Labs and Laurus Labs, both down more than 10 per cent in early trade. Sun Pharma, Cipla, Aurobindo Pharma, and Lupin also saw sharp cuts in the range of 3–6 per cent.

Investor sentiment has also been hit by broader market volatility triggered by Donald Trump's aggressive tariff moves across sectors. With reciprocal duties from countries like India and China expected to roll out this week, pharma has emerged as a frontline casualty due to its deep export exposure.

Analysts believe that the correction in pharma stocks could deepen if the tariff regime materializes without a waiver or if regulatory approvals from the US FDA face any retaliatory delays.

At 9:45 am, Nifty Pharma was trading down 5.8 per cent at 19,460. Experts expect short-term volatility to remain elevated, with a close watch on government-to-government negotiations and clarity on US trade actions.

India exported over $6.5 billion worth of pharma products to the US in FY24. A tariff of even 10–15 per cent could deeply impact profit margins for firms heavily dependent on US sales.