Trump Proposes 100% Tariff on Imported Pharmaceuticals, Indian Firms React
US President Donald Trump has proposed a significant tariff hike on imported pharmaceuticals, sparking concern among Indian pharmaceutical companies and causing a dip in stock prices for major players. The move, part of an investigation into the sector's national security implications, could reshape the global pharmaceutical industry.
The US Commerce Department is currently reviewing the pharmaceutical sector under Section 232, with Trump proposing a 100% duty on branded and patented medications entering the US from October 1, 2022. This investigation excludes surgical masks, N95 respirators, gloves, and other medical devices, focusing solely on pharmaceuticals such as prescription drugs, over-the-counter drugs, biologics, and specialty drugs.
Trump had previously warned that tariffs on pharmaceutical imports could reach as high as 250%. The proposed 100% tariff has already led to eight of the top ten losers on India's Nifty 500 index being pharmaceutical firms. Notable Indian companies affected include Sun Pharma Ltd., Aurobindo Pharma Ltd., Gland Pharma Ltd., Lupin Ltd., and Cipla Ltd., which saw their stocks slide by up to 5% following the announcement. However, the policy exempts corporations establishing or already operating medication manufacturing plants in the US, potentially encouraging companies to relocate production to avoid these tariffs.
The proposed tariff hike on imported pharmaceuticals is set to impact the global pharmaceutical industry significantly, with Indian companies among the first to feel the pinch. As the US investigates the sector's national security implications, the future of pharmaceutical trade between the two countries remains uncertain. The policy's exemption for US-based production facilities may encourage companies to reshuffle their manufacturing strategies.
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