Trump’s 100% Pharma Tariff Puts Indian Drugmakers at Risk; Dr. Reddy’s, Sun Pharma Most Exposed

U.S. President Donald Trump’s decision to impose a 100% tariff on branded and patented pharmaceutical imports from October 1, 2025 has raised red flags for the Indian pharma sector, which relies heavily on the U.S. market.

• Dr. Reddy’s Laboratories (DRL): The Most Exposed
  With 47% of revenue dependent on the U.S., DRL faces the greatest risk. Nomura estimates its U.S. revenues at $1.5 billion in FY26, noting that most American operations remain vulnerable despite limited protection from products like gSuboxone, which are formulated in the U.S.

• Sun Pharma: Specialty Brands in Danger
  Sun Pharma, with 37% of revenue from the U.S., could see $2.1–2.3 billion in FY26 revenues impacted. Specialty brands like Ilumya, formulated outside the U.S., are at risk. However, analysts say its chronic therapy profile may allow Sun to pass on tariff costs. Shares have already slipped 5% to a 52-week low of ₹1,547.25.

• Cipla: Relatively Insulated
  Cipla has lower exposure, with 30% of revenue tied to the U.S. (~$900–950 million). Its Invagen facilities in the U.S. generate 25–30% of American revenues, offering partial protection. The company is also expanding U.S. manufacturing after past regulatory hurdles.

Market Impact
The announcement rattled investor sentiment, dragging shares of Dr. Reddy’s, Sun Pharma, and Cipla down by up to 5%. The U.S., accounting for about 35% of Indian pharma exports worth $10 billion in FY25, remains the sector’s largest market.