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Big respite for Indian generic players with no tariffs on generic pharma exports to the US

ICICIdirect Research 10 Oct 2025 DISCLAIMER

The Trump administration has decided not to impose tariffs on generic drugs from foreign countries, after months of wrangling.
Indian pharma exports to the US stood at ~US$ 10 billion which is ~31% of the overall Pharma exports and is largely generic in nature which were out of tariff embargo and this announcement reiterates its original stance.
Note that generic drugs from India constitutes ~45 % of all generic prescriptions filled in the US Pharmacies.
With this fact in mind, the pressure against imposing tariffs on generics was coming from within the administration itself.
Another apprehension was that the disturbance due to tariffs could have led to acute shortages in many high-volume generic drugs.
This development is sentimentally positive for generic companies with US exposure such as Aurobindo Pharma which drives ~48% from US, Dr Reddy drives ~42% , Zydus ~44%, Gland Pharma ~52%, Granules ~66% and Alivus Life sciences ~48% among others.
We have Buy Rating on Alivus Life Sciences(TP: ₹1410), Gland (TP : ₹2335), Aurobindo(TP: ₹1285),  Dr Reddy(TP: ₹1445), Granules (TP: ₹635)

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