Trump’s tariff threat hits Indian pharma, auto stocks

Passenger vehicle and tractor manufacturer Mahindra & Mahindra's shares also fell due to the anticipated impact on its US exports.

In the financial year 2023-24, India's pharmaceutical exports to the US stood at $8.73 billion, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil).

The Nifty Pharma Index was down 0.71 per cent, while the BSE Healthcare Index closed 0.31 per cent lower at the end of the trading session.

Pharmaceutical stocks recovered after a sharp intraday decline but ended lower on the BSE.

Exporting companies would not face tariffs if they set up their own manufacturing units in the US, Trump said.

Select automobile stocks also declined due to the dual impact of US tariffs and US electric car maker Tesla's plans to enter the Indian market.

"US markets gained on Tuesday, with the S&P 500 closing at a record high, while Asian markets ended lower after US President Donald Trump announced plans to impose 25 per cent tariffs on automobile, semiconductor, and pharmaceutical imports from April 2025. This move could hamper international trade and dampen global market sentiment. As a result, the Nifty Pharma Index declined by 0.7 per cent, with selling pressure observed in several export-oriented pharmaceutical companies," said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.

IT stocks also declined ahead of the release of the US Federal Reserve minutes, with the BSE IT Index falling by 1.21 per cent.