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India’s pharma exports reached $31.13 billion in FY2025-26, against $30.47 billion a year earlier. Growth has continued, but not accelerated: exports rose 4.9 per cent to $16.14 billion in April–September 2026, with July–September shipments up just 3.05 per cent to $8.04 billion. Europe expanded 9.66 per cent, ASEAN 21.54 per cent, and Latin America and the Caribbean 16.58 per cent in the first half. Formulations and biologicals still account for 73.84 per cent of shipments. About 35 per cent of formulation exports go to the US and 17 per cent to Europe, according to Crisil. Geographic diversification is progressing, but the American market remains too large to ignore.
The latest US tariff framework is more selective than the headline 100 per cent rate suggests. Under the April 2026 Section 232 proclamation, the 100 per cent duty applies to specified patented medicines and their ingredients, with concessions linked to US manufacturing commitments. The standard rate for imports from the EU, Japan, South Korea and Switzerland is 15 per cent, creating a substantial difference from the baseline treatment of other patented imports. Generic medicines, biosimilars and their ingredients are currently exempt, although Washington plans to reassess that treatment by April 2027. This protects the largest portion of India’s US pharma exports for now. It does not protect manufacturers from fierce generic competition, price erosion or the costs of developing alternatives to high-volume products.
The domestic market is in considerably better shape. Indian pharma sales grew 14.7 per cent to approximately ₹74,610 crore in July–September, according to Equirus Securities, while September alone recorded 17.1 per cent growth and 5.4 per cent unit expansion. Quarterly volume growth was 3 per cent. Anti-diabetic medicines grew 21.2 per cent in September, cardiac therapies 20.4 per cent, and oncology 29.4 per cent. Chronic treatments grew 16.8 per cent on a trailing-year basis, compared with 10.9 per cent for acute therapies. Higher prices and new launches still contribute to growth, but the recovery in volumes makes the latest domestic numbers more substantial than a price-led expansion. Nifty Pharma gained 6.1 per cent in the final week of October, compared with 2.59 per cent for Nifty 50, despite mixed company earnings.
September-quarter earnings illustrate how sharply domestic strength and US weakness can diverge. Sun Pharma’s sales rose 11.8 per cent to ₹16,100 crore, with Indian formulations up 17.3 per cent, while US formulations declined 8.2 per cent to $455 million. Its innovative-medicines portfolio generated $356 million, up 6.9 per cent, and represented 21.1 per cent of sales. Reported net profit fell to ₹1,989 crore, largely reflecting exceptional acquisition-related and other charges; adjusted profit was ₹3,162 crore. The distinction matters because an exceptional expense should not be confused with deterioration in the underlying formulations business.
Dr Reddy’s reported revenue of ₹8,671 crore, down 1.5 per cent, with North American sales dropping 23 per cent to ₹2,489 crore as revenues from lenalidomide normalised. Its India business grew 17 per cent and emerging markets 24 per cent, but gross margin still fell from 54.7 per cent to 52.1 per cent. Cipla’s revenue declined 2.4 per cent to ₹7,404 crore, and profit dropped 35 per cent to ₹878 crore. Its Indian business grew 12 per cent, while North American revenue fell 19 per cent to $172 million. Strong prescription growth at home has not been enough to replace the profitability of earlier, limited-competition US opportunities.
Lupin’s net sales rose 14 per cent to ₹7,786 crore, helped by 14.7 per cent growth in India. However, profit fell 22 per cent to ₹1,155 crore and its reported EBITDA margin contracted to 27.9 per cent from 35.6 per cent, including foreign-exchange and other income. Torrent Pharma’s 50.8 per cent revenue jump to ₹4,979 crore partly reflected its expanded business following the JB Chemicals acquisition; net profit nevertheless declined 9.6 per cent to ₹534 crore as depreciation and financing costs increased. Revenue growth alone therefore gives an incomplete account of sector performance.
Currency provides a partial cushion. Sun Pharma’s disclosed average exchange rate was ₹95.58 to the dollar this September quarter, versus ₹87.35 a year earlier. Lupin’s US sales were approximately 1 per cent higher in dollars but 9.3 per cent higher in rupees. Depreciation supports exporters’ reported revenue, yet imported inputs, equipment and dollar-linked freight can absorb some of that benefit. Dr Reddy’s specifically cited higher freight expenses linked to disruption in the Middle East. India also imported approximately $4.35 billion of specified APIs, bulk drugs and intermediates in FY2024-25, of which China supplied 73.7 per cent, according to Parliament data.
Complex development and contract manufacturing are providing measurable examples of higher-value business. Laurus Labs reported a 33 per cent rise in quarterly revenue to â‚ą2,206 crore and 78 per cent EBITDA growth to â‚ą762 crore. Its contract development and manufacturing revenue rose 77 per cent in the first half, supported by small-molecule projects and investment in peptides. India has established annual domestic capacity of around 56,800 tonnes for 28 of 41 identified critical bulk-drug products under its production-linked incentive programme, although capacity creation does not by itself eliminate import dependence. Moving from commodity generics to peptides, biosimilars and complex inhalation products increases development costs but can also reduce the number of direct competitors.
For October–December, domestic chronic therapies should remain the main support, while respiratory and anti-infective demand will depend on seasonal incidence and last year’s comparison base. Cipla expects to introduce generic Advair in the US during the quarter, but launch timing and competitive pricing will determine the contribution. Lower lenalidomide revenue remains a comparison challenge for other exporters. Crisil projects 11–13 per cent sector revenue growth for FY27, but warns that raw-material, energy and freight costs could reduce operating margins by 150–200 basis points. The critical indicators in December-quarter results will be US product-level price realisations, margins excluding currency gains, domestic prescription volumes and how quickly new complex products contribute revenue.
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