Trump’s Tariff Pause: Domestic Pharma Stocks Gain Up To 7 Per Cent, Nifty Pharma Surges 3 Per Cent

Shares of domestic pharmaceutical companies gained in trade on April 11 on the NSE. The stocks gained amid a broad-based rally in the market following US President Donald Trump’s decision to pause reciprocal tariffs.

Nifty Pharma Stocks Rally

The Nifty Pharma index which reflects the behavior and performance of the pharmaceutical sector in India gained in today’s trade. Notably, as many as 19 constituents of the Nifty Pharma index traded in the green at the time of writing, while one stock traded in the red.

Domestic pharmaceutical stocks which are constituents of the Nifty Pharma index such as Laurus Labs Ltd, and Granules India Ltd traded higher by as much as 7.18 per cent on the NSE. Laurus Labs shares gained nearly 8 per cent in early trade to hit an intraday high of Rs 606.95 apiece on the NSE.

Other gainers included Biocon Ltd and Aurobindo Pharma Ltd which traded higher by as much as 3.61 per cent on the NSE. The gains made by the top constituents of the Nifty Pharma index pushed it higher.

The Nifty Pharma index surged over 3 per cent to trade at 20,684.75 levels. The gains made by top constituents of the index such as Sun Pharmaceutical Industries Ltd, Cipla Ltd and Divi's Laboratories Ltd pushed it higher. Sun Pharmaceuticals, Cipla and Divi’s Laboratories hold 24.9 per cent, 10.8 per cent and 9.76 per cent weightage in the index respectively. Out of the three top-constituents shares of Divi’s Laboratories gained the most, rising over 4 per cent to trade at an intraday high of Rs 5,625 apiece on the NSE.

Why Are Pharma Stocks Gaining

Shares of domestic pharmaceutical companies rose on April 11 after Trump’s announcement to halt the imposition of reciprocal tariffs for 90 days. Earlier on April 9, Trump stated that several countries are negotiating trade deals with the US. The negotiations specifically India-US trade talks boosted the mood of the market. This in turn caused a broad-based rally in the Indian stock market amid reducing concerns regarding a possible US recession. Despite the 90-day pause, a 10 per cent blanket tariff has still been put in place by the Trump administration on all imports to the US.

Notably, the tariffs on China have been hiked to 145 per cent after Beijing retaliated to the imposition of reciprocal tariffs with an 84 per cent duty. The absence of tariffs on Indian pharma at the moment and China’s increasing tariff burden have also helped bolster sentiment for domestic pharma companies as India and China are the two major suppliers of generic drugs to the US.

Future Unclear For Pharma

Indian pharmaceutical companies gain a significant part of their revenue from geographies such as the US, Europe, and Africa. Together these countries make up nearly 70 per cent of India’s total pharma exports.

While pharma as a sector has so far been kept out of the purview of tariffs. Trump has hinted that the US might announce a separate set of tariffs for the sector. Thus it remains unclear whether Indian drugmakers will remain tariff-free or not.

At the time of writing the Nifty Pharma index traded at 20,515.95 levels up by 2.7 per cent or 539.65 points. On the other hand, the benchmark Nifty traded at 22,865.15 levels up by 2.08 per cent or 466 points.