If you’re following pharma stock news lately, you might have noticed something unsettling. Indian pharma stocks – including big names like Sun Pharma, Granules India, Ajanta Pharma, and JB Chemicals – have been on a losing streak this week.
Share prices in the sector have nosedived over the past few sessions, leaving many investors wondering: what’s going on?
The short answer? Fears of potential U.S. trade tariffs on Indian pharmaceutical imports have given pharma stocks a bitter pill to swallow.
Also read: Mankind Pharma Stock Analysis by Ketan Mittal (SEBI RA)
Why are pharma stocks falling?
It all started with fresh trade war tremors from the United States. Earlier this week, U.S. President Donald Trump announced a hefty 25% tariff on auto imports, claiming it would boost domestic manufacturing.
Almost immediately, speculation grew that pharmaceutical exports might be Trump’s next target, given his comments suggesting tariffs on drug imports as well. In other words, after hitting autos, Trump hinted he could come after imported medicines — a big deal for Indian drug makers.
Unsurprisingly, investors reacted swiftly.
The Nifty Pharma Index tumbled about 1.5% on March 27, plunging to 21,042, and marking a 3% cumulative drop over three sessions.
Here’s a snapshot of the damage:
| Company / Index | Intraday Drop (%) |
| Nifty Pharma Index | 1.5% (3-day drop: 3%) |
| JB Chemicals & Pharmaceuticals | Over 6% |
| Sun Pharma, Ajanta Pharma, Granules India | 2% to 4% |
The U.S. is the largest buyer of Indian drug exports, accounting for about 31% of total pharma exports. India exported $27.9 billion worth of pharma products in FY24, which was a 9.67% YoY increase, even though overall exports declined 3%. Pharmaceuticals are clearly a stronghold in India’s export portfolio, and any disruption in that corridor could hurt hard.
Tariffs could reduce demand or squeeze margins, making Indian products costlier or less competitive. That fear alone sent pharma stocks tumbling.
Also read: Trump’s new auto tariffs impact explained
Trump’s first term déjà vu for pharma stocks
This isn’t the first time Indian pharma stocks have faced heat under Trump’s policies.
During his first term (2017–2021), the Nifty Pharma index returned just 20%, while the broader Nifty 50 index shot up by 80%.
Let’s compare the numbers:
| Index/Stock | Jan 2017 – Jan 2021 Return |
| Nifty Pharma Index | ~+20% |
| Nifty 50 Index | ~+80% |
| Sun Pharma share | –31% |
| Lupin | –49% |
This massive underperformance was due to a lot of challenges:
- Pricing pressure in the U.S. generics market
- Tougher FDA scrutiny and plant inspections
- Fewer major product approvals
- Domestic issues like price controls and FDC bans
- And of course, Trump’s tariff and trade talk
All these factors made life difficult for pharma stocks — especially companies like Sun Pharma and Lupin that have significant U.S. exposure.
So when news of potential new tariffs broke again this week, the market had a “not this again” moment. Many investors still remember how badly pharma underperformed during those years. The sell-off was partly fear, but also memory.
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Could India escape the tariffs?
Thankfully, there’s a chance these tariffs might not materialise in full force.
Trump has hinted that not all proposed tariffs would be imposed by the April 2 deadline. The U.S. also suggested there could be exemptions for certain countries or products, though details are still vague.
Meanwhile, India has signalled its openness to negotiations. Sources say India is willing to cut tariffs on more than half of U.S. imports worth $23 billion in the first phase of a trade deal. The idea? Offer some market access in exchange for avoiding a bigger trade blow.
This is a classic give-and-take move. India might lower import duties on American goods like agriculture or tech equipment, hoping the U.S. backs off on pharma tariffs in return.
The U.S. Commerce Secretary recently remarked that India’s tariffs are among the highest globally and that the “special relationship” may need reassessment. But the active dialogue and diplomatic flexibility suggest both sides want a win-win.
If exemptions or trade deal progress are announced, pharma stocks could bounce back quickly.
Conclusion
The recent drop in pharma stocks—from JB Chemicals to the Sun Pharma share—is a reflection of investor anxiety over potential U.S. trade policy changes. But it’s not the first time we’ve seen this pattern. The market has a long memory, and fears from Trump’s first term are resurfacing now.
That said, nothing is final yet. With ongoing negotiations, hints of exemptions, and a history of trade-offs between India and the U.S., there’s still a real chance that the pharma sector escapes the worst-case scenario.
For now, investors would be wise to stay informed rather than panic. Keep an eye on the April 2 developments, monitor how trade talks evolve, and remember that even strong sectors like pharma can face turbulence when global politics get involved.
