US Tariffs May Pressure Indian Pharma, Threaten Biocon Revenues: Fitch
As per the report, Biocon Biologics Limited, which focuses on biosimilars, is particularly exposed with about 40 per cent of its revenue coming from the US.
New Delhi: Pharmaceuticals, one of India's biggest export earners, could come under strain if the United States announces fresh tariffs, Fitch Ratings has warned in a new Fitch Wire report.
The rating agency said while Indian corporates generally have low direct exposure to current US tariffs, the pharmaceutical industry remains vulnerable to future trade measures. The US is a key market for Indian drugmakers, and any tariff imposition could ripple across the sector.
As per the report, Biocon Biologics Limited, which focuses on biosimilars, is particularly exposed with about 40 per cent of its revenue coming from the US. The company's products are mainly manufactured in India and Malaysia.
Fitch cautioned that significant US tariffs on pharmaceutical exports could hurt Biocon's performance, adding that passing higher costs to consumers might be difficult in a competitive market, even with steady demand for its medicines.
The warning comes after Washington imposed a 25 per cent reciprocal tariff on Indian goods beginning August 7, 2025, and an additional 25 per cent levy linked to imports of Russian oil effective August 27. These measures have already clouded prospects for several Indian industries.
Automobiles and chemicals face risks too, though exposure remains limited compared with pharma. Samvardhana Motherson International Limited, which supplies auto components, earns close to 20 per cent of sales from the US but mainly through production bases in the US and Mexico.
Fitch noted it had revised the company's outlook to "Stable" from "Positive" earlier this year, citing uncertainty in the global auto sector from tariff disruptions.
Crop-protection major UPL Limited, with about 10-12 per cent of revenue from the US, could also feel the heat. Its products manufactured in India are expected to face tariffs closer to those imposed on Chinese imports.
The impact of tariffs extends beyond manufacturing. Russian crude, which makes up 30-40 per cent of India's oil imports, continues to underpin the profitability of state-owned oil marketing companies. Fitch estimates a 10 per cent hit to their earnings in the event of a complete halt in Russian purchases, though government support would keep their credit ratings steady.
For now, Fitch assumes limited direct tariff impact on sectors like IT services, cement, telecoms, and utilities. But the report cautioned that if tariffs remain higher than in other Asian markets, India's projected 6.5 per cent growth for FY26 could come under pressure.
