U.S. pharma tariffs spare India’s generic drugmakers — but leave investors jittery

Stocks of starring Indian drugmakers fell connected Friday, adjacent though the 100% U.S. tariffs connected branded and patented cause imports are improbable to impact these companies.

Indian companies mostly export generic drugs to the U.S., truthful the apt interaction volition beryllium beauteous minimal, Sudarshan Jain, an authoritative astatine the Indian Pharmaceutical Alliance, told CNBC.

Yet, shares of ample Indian drugmakers similar Sun Pharmaceutical and Divi's Laboratories fell by 2.5% and 3.5% connected Friday, with adjacent the assemblage benchmark Nifty Pharma Index falling by implicit 2%.

While the worries of investors mightiness look misplaced, Ayush Abhijeet, manager of investments astatine White Oak Capital Partners, told CNBC that planetary marketplace participants are seeing this arsenic the series of events implicit the past mates of months.

"There has been a ratcheting of challenges to the India economy," Abhijeet said. He referenced higher U.S. tariffs of 25% connected India, past the additional 25% tariffs followed by the H-1B visa interest hike.

Many of these tariffs are not expected to substantially dent the system oregon erode net of Indian corporates, but investors fearfulness that determination could beryllium further escalations earlier U.S.- India commercialized ties improve.

The U.S. archetypal imposed 25% tariffs connected India successful August, earlier raising it to 50% citing India's acquisition of Russian oil, with White House commercialized advisor Peter Navarro calling Russia's warfare successful Ukraine "Modi's war."

Indian exporters of textile, gems and jewelry and marine products person been among astir affected by the tariffs, but since the Indian system is mostly driven by backstage consumption, the interaction of the tariff is limited.

U.S. President Donald Trump past week imposed a "one-time" visa interest of $100,000 connected caller H-1B visa applications, a determination which could disproportionally affect Indian workers.

All these announcements successful speedy succession are making investors jittery, with galore fearing further escalation from Washington, experts told CNBC.

There is simply a anticipation that these successive moves by the U.S. are portion of a dialog maneuver to unafraid a quicker commercialized woody with India, said Gyanendra Tripathi, spouse astatine hazard advisory steadfast BDO Partners.

White Oak's Abhijeet, meanwhile, said that dissimilar textiles, wherever India lacks the planetary competitiveness and its products tin beryllium substituted by exports from countries similar Bangladesh oregon Vietnam, India does person an borderline successful the lawsuit of generic pharma.

"Even if [the] US was to enforce tariffs connected Indian generic pharma I volition not beryllium excessively worried," Abhijeet said. "Generic pharma exporters are competitory and person fewer substitutes truthful [a] ample portion of the tariffs volition beryllium passed connected to end-customers," helium added.