Biocon, Cipla: Nifty Pharma down 4% as US eyes possible tariffs on sector
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Nifty Pharma index slipped 4.2 per cent, logging an intra-day low at 20,521.70. The fall came amid reports that US President Donald Trump is looking for possible tariffs on pharmaceutical goods.
Around 10:01 AM, all 20 Nifty Pharma constituents traded in the red. Among others, Aurobindo Pharma was down 6.25 per cent, Ipca Laboratories slipped 5.59 per cent, Lupin 5.35 per cent, Laurus Labs and Biocon were down 5.05 per cent each.
Similarly, Cipla was down 4.68 per cent, Divi's Laboratories 4.18 per cent, Dr. Reddy's Laboratories 4.16 per cent, and Sun Pharma 3.72 per cent.
As per Geojit Investments report, Zydus Lifesciences' 47 percentage of revenue comes from the US. Similarly, Aurobindo Pharma has a revenue exposure of 46 per cent to the US, Dr. Reddy’s Laboratories has 41 per cent, Lupin has 38 per cent and Sun Pharma has 32 per cent and Cipla has 30 per cent.
On Thursday, Indian Standard Time (IST), the White House announced 'reciprocal tariffs' on all imports from India and other nations, calling the move “kind reciprocal." Calling India’s tariffs “very, very tough," Trump said he was imposing 27 per cent tariffs on all imports from India. The US also imposed 10 per cent base tariffs on all its trading partners.
"President Trump will impose an individualised reciprocal higher tariff on the countries with which the United States has the largest trade deficits. All other countries will continue to be subject to the original 10 per cent tariff baseline," according to the White House official website. This will take effect April 9, 2025, it added.
However, the White House exempted pharmaceuticals and some other categories from 'discounted reciprocal tariff'. Rejoicing the news, pharma stocks rallied and Nifty Pharma rose 4.9 per cent in trade on April 3, 2025. Though it was not clear whether it was a temporary exemption.
"We wait for more details and note that higher tariffs are not completely ruled out for the future on pharmaceuticals," said brokerage firm BNP Paribas.
As per the White House official website, some goods will not be subject to the reciprocal tariff including articles subject to 50 USC 1702, steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs; copper, pharmaceuticals, semiconductors, and lumber articles; all articles that may become subject to future Section 232 tariffs; bullion; and energy and other certain minerals that are not available in the United States.
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