Sun Pharma, Cipla, Dr Reddy’s: Which Pharma Giant Faces Maximum Risk From Trump’s 100% Tariff?

Last Updated:September 26, 2025, 12:01 IST

Trump’s imposition of 100% tariffs on branded drugs has shaken Indian pharma firms, impacting stocks like Sun Pharma, Cipla, and Dr. Reddy’s

Pharma Tariffs

After targeting Indian IT majors with the H-1B visa fee hike, US President Donald Trump has now turned his attention to the pharmaceutical sector, imposing a 100% tariff on branded and patented drugs starting October 1, 2025.

Pharmaceutical shares came under heavy selling pressure on Friday following the announcement, raising concerns over broader trade disruptions. The Nifty Pharma index dropped 2.40% in morning trade, with all 20 of its constituents in the red.

While most Indian pharma companies derive the bulk of their revenues from generics, the tariff rattled investor sentiment, pushing Sun Pharma, Cipla, and Dr. Reddy’s shares down by up to 5%.

With 30–47% of their revenues linked to the US market, analysts are evaluating which companies’ balance sheets could be hit hardest if Trump’s measures extend to complex generics and specialty medicines. The US is India’s largest pharma market, accounting for roughly 35% of exports, valued at about $10 billion in FY25.

“President Trump’s tariffs on patented and branded drugs are resuming,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. “India, being an exporter of generic drugs, is unlikely to be impacted, though generics could become a future target.”

“While the tariffs primarily target branded drugs, ambiguity remains over whether complex generics and specialty medicines might also be affected,” warned Maitri Sheth from Choice Institutional Equities. “Companies with US manufacturing plants under construction are exempt, offering some mitigation.”

Sunny Agarwal of SBI Securities added, “Sun Pharma seems most impacted, followed by Dr. Reddy’s. Most players are in generics, so the effect on branded generics remains unclear.”

Dr. Reddy’s: The Most Exposed

Dr. Reddy’s is among the most vulnerable, with 47% of revenues dependent on the US market—the highest among peers. Nomura estimates DRL’s US revenues at $1.5 billion in FY26, making tariff expansion potentially severe.

“Products manufactured in the US contribute less than 15% to FY27F revenues,” Nomura noted, leaving the bulk of DRL’s American operations exposed. Some products, like gSuboxone, are US-formulated, offering limited protection.

Sun Pharma: Specialty Brands Under Fire

Sun Pharma’s 37% US exposure puts $2.1–2.3 billion of FY26 revenues at risk. Specialty brands account for 55–57% of US revenues, with only 10% produced domestically. Its top-selling product, Ilumya, is manufactured outside the US, likely in Ireland, making it vulnerable to tariffs. Nomura analysts note, however, that as Ilumya is a chronic therapy, Sun may pass on the tariff impact and retain volumes. Sun Pharma shares fell up to 5% to a 52-week low of Rs 1,547.25 on the BSE.

Cipla: The Relative Safe Haven

Cipla appears least exposed, with 30% of revenues linked to the US ($900–950 million in FY26/27). Its US-based Invagen sites contribute 25–30% of US revenues, providing some protection. “The company is expanding US manufacturing post-regulatory issues at Indian sites,” analysts noted, creating a buffer against future tariff risks.

Broader Impact on Indian Pharma

• Lupin: US revenues estimated at $1.1 billion in FY26, with US manufacturing contributing $70–80 million (6–7% of total revenues).
• Zydus Lifesciences: US revenues of $1.3 billion in FY26/27, with limited US production, making it highly exposed.
• Aurobindo Pharma: Largest Indian generic player with $1.6 billion US sales in CY2024. Three US sites exist, with oral dosage production potentially scaling to 12–15 billion units.
• Glenmark: Monroe manufacturing site contributes nothing currently; US revenues estimated at $393–461 million in FY26/27.
• Gland Pharma: Better positioned with US revenues of $372–393 million; faces lower competition in injectables.
• Alkem: US revenues $336–372 million; small-scale operations largely reliant on Indian supply, vulnerable if tariffs cannot be passed on.
• Torrent Pharma: Minimal US exposure at $141–156 million; low profitability raises questions on strategy sustainability.

ICICI Securities’ Pankaj Pandey notes, “Near-term impact is likely limited as India mainly exports generics. But uncertainty remains over complex generics and biosimilars.”

Trump’s exemption for companies that have “broken ground on building a US manufacturing plant” provides a lifeline, but for firms still reliant on Indian production, October 1 could trigger a significant earnings impact.

As pharma stocks brace for potential sell-offs, the market awaits clarity on whether the tariffs will extend beyond branded drugs to affect the entire $10 billion Indian pharma export industry.

Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More