Khemka noted that while Indian generic drugmakers are not directly targeted, risks remain. “The sword is still hanging,” he said, explaining that if the tariffs fail to achieve the desired outcome, the US may expand them to cover generic medicines in the future.
He said that among listed Indian companies, Sun Pharma and Wockhardt could see the most impact since both have sizeable exposure to speciality-branded products in the US. For Sun Pharma, he estimated that global speciality products make up about 20% of revenue, with 70–80% of that coming from the US. This implies that nearly 15% of its topline could be affected.
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Khemka also highlighted ambiguity around biosimilars, which are sold under brand names in the US. He said this could create challenges for Biocon, though its ongoing investment in a US manufacturing facility may offer some relief. “Until there is 100% clarity, I would not touch this business as an investor,” he added, pointing to higher geopolitical risk without a matching correction in valuations.
Prashant Paroda, Portfolio Manager EM at Allspring Global Investments, took a different view. He argued that Indian generic producers are unlikely to face the same tariff rates as branded drugs. Generics, he said, are seen as “part of the solution” to reducing healthcare costs in the US.
Paroda also noted that ongoing dialogue between India and the US could help manage trade tensions. He believes investors will soon shift focus to domestic drivers, particularly consumption trends during the Diwali season, which could act as a key trigger for the broader Indian market.
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Allspring Global Investments reported $610 billion in assets under advisement and $457.5 billion in assets under management (AUM) as of July 2, 2025. Of the total AUM, about $214 billion is invested in money market funds.
In a separate interview, Bino Pathiparampil, Head of Research at Elara Securities, said the proposed US tariffs on drugs are unlikely to cause major disruption, though details are still awaited. He noted that companies with US manufacturing plants, such as Sun Pharma, may be exempted. He strongly believes generics will remain exempt, since tariffs on them could lead to drug shortages in the US. Tariffs, if applied selectively on branded drugs, could even benefit generic makers.
On Sun Pharma, he pointed out that many of its products are shipped from Europe, which already faces a 15% tariff under an existing trade deal, suggesting limited additional risk. He does not see a major earnings impact for pharma companies at this stage and maintains an “accumulate” rating on Sun Pharma, viewing any stock weakness as a buying opportunity.
For the full interview, watch the accompanying video
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