Pharma Stocks Rally After US Tariff Suspension; Laurus Labs, Cipla, Granules Among Top Gainers

Following an announcement by the US regarding a 90-day pause on tariffs, shares of pharmaceutical companies in India experienced a surge. Laurus Labs (6.94%) was the biggest gainer with their stock prices rising by as much as 7%, Granules India (4.60%), and Cipla (3.31%) were also among the gainers, with their stock prices rising by as much as 5%. This positive market reaction occurred during the early trades on Friday, April 11.

US Tariff Suspension Until July 9

The United States suspended additional tariffs for 90 days, until July 9. This suspension provided relief to the pharma sector, although the existing 10% baseline tariff remains in place. The Nifty Pharma sector also responded positively, rallying by 2.58% on Friday Noon. Prior to this pause, the US President had imposed a 26% tariff on India on April 3. However, certain goods, including pharmaceuticals, copper, semiconductors, lumber articles, gold, energy, and some minerals, were excluded from these reciprocal tariffs.

Uncertainty Regarding Future Pharma Tariffs

Despite the temporary pause, there remains uncertainty as Trump stated that "Pharma tariffs are going to come in at levels you have never seen before". He indicated that pharmaceuticals are being considered as a separate category for future tariffs, with an announcement expected in the "near future".

India's Pharma Exports to the US 

The United States is a significant market for Indian pharmaceutical companies, accounting for a third of India's overall pharma exports. Indian pharmaceutical companies continue to play a pivotal role in the US healthcare system, supplying 40% of all generic medicines consumed by American residents in 2024. This significant contribution underscores India's position as a global leader in affordable drug manufacturing and export. These include mental health, hypertension, lipid regulation, anti-ulcer treatments, and nervous system disorders, where Indian companies account for more than half of all prescriptions. 

FII Holdings in Pharma 

Foreign institutional investors (FIIs) held significant equity in the pharma sector in India, which was among the top 5 sectors for FII holdings, accounting for approximately 60% of their total holdings. As a percentage of FII holdings in India, the share of Pharma rose from 6.8% in February 2025 to 6.9%. The pharma sector also witnessed an inflow of $15 million from foreign investors.

Government Assurances to Exporters

On April 9, Commerce Minister Piyush Goyal urged exporters to stay calm over US trade concerns. He stated that India is working on achieving the "right mix and right balance" in its proposed trade agreement with the US and is proceeding with "speed" but without "undue haste”.

Other Pharma Stocks Also Traded Higher

Besides Laurus Labs, Granules, Cipla, Aurobindo Pharma, and Biocon (which rose by as much as 7%), other pharma companies also experienced gains.These included Sun Pharma (2.45%), Dr Reddy’s (2.71%), IPCA Laboratories (3.14%), Natco Pharma (2.68%), and Ajanta Pharma (2.94%), among others. Even heavyweights like Divis Lab (3.12%) and Lupin (3.11%) saw an increase in their shares.

Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here