US Pharma Tariffs: Jefferies thinks Zydus and Dr. Reddy's are most at risk; see how they affect other Indian pharmaceutical stocks.

As a significant provider of generic medications to the US market, the Indian pharmaceutical industry is alarmed by US President Donald Trump's plan to put taxes on imported pharmaceutical goods. Even while the action appears to be primarily directed at China and Ireland, Indian pharmaceutical businesses that have a lot of exposure to the US might still encounter difficulties.

Businesses will have to choose whether to absorb the expense or pass it on to customers if tariffs are imposed. Approximately 150 medications are exempt from taxes, while some drugs have lower import duties of 5%. Currently, India imposes import duties of up to 10% on drugs imported from the US.

According to international brokerage company Jefferies, reciprocal tariffs imposed by the US on Indian medications imported into the US would only amount to 10% at most. Pharmaceutical companies are expected to try to pass on tariff hikes to payors. The entire supply chain will have to bear some of the burden if the expenses are not transferred to the final patients. Retailers or distributors, formulation manufacturers, and API or KSM suppliers to manufacturers are important participants in the US supply chain.