India pharma market records fastest growth in over two years ahead of US tariff shift

India's pharmaceutical industry is entering a crucial transition period before the United States begins imposing tariffs on imported generic medicines, supported by strong domestic demand, improving product launches and broad-based growth across key therapy segments, according to an Equirus Securities report.

Domestic market posts strongest growth in over two years

The report comes after US President Donald Trump announced on Wednesday that generic drugs imported into the United States will continue to attract zero per cent tariffs for two years from August 1, 2026. Thereafter, tariffs will be raised by up to 200 per cent over the following two years.

Against this backdrop, the Indian Pharmaceutical Market (IPM) delivered its strongest monthly performance in more than two years during June, registering 16 per cent year-on-year growth. Growth in the first quarter of FY27 also accelerated to 13.5 per cent year-on-year, highlighting sustained momentum in the domestic formulations market.

"Jun'26 marked the IPM's strongest monthly performance in over two years, with growth accelerating to 16% yoy, driving 1QFY27 growth of 13.5% yoy and reinforcing the resilience of the domestic formulation market," the report said.

The report noted that all three key growth drivers strengthened during the period. Volume growth improved to 3.4 per cent, price-led growth reached 4.6 per cent, while new product launches contributed 3.1 per cent, indicating healthier demand alongside a stronger innovation pipeline.

Growth broadens across therapies as chronic treatments lead

According to the report, all 10 major therapy segments posted double-digit growth in June, with cardiac and anti-diabetic therapies leading the expansion. Anti-diabetic treatments also emerged as the third-largest therapy segment, driven by increasing adoption of GLP-1 therapies.

Chronic therapies continued to outperform the broader market, while acute therapies also witnessed a recovery, reflecting a more balanced growth trajectory across the domestic pharmaceutical sector.

Torrent Pharma, Zydus among top performers

Among leading pharmaceutical companies, Torrent Pharma and Zydus recorded around 20 per cent growth in June, outperforming the overall market. Cipla, Dr Reddy's Laboratories, Lupin and Sun Pharma also reported stronger-than-market growth during the month.

The report said the trend remained intact during the first quarter of FY27, with companies focused on chronic therapies and volume-led growth continuing to outperform their peers.

"Jun'26 marked the IPM's strongest monthly performance in over two years, with growth accelerating to 16% yoy, driving 1QFY27 growth of 13.5% yoy and reinforcing the resilience of the domestic formulation market," the report said.

The report concluded that improving demand, stronger product launches and broad-based growth across therapies and companies position India's domestic formulations market well as the industry navigates evolving global trade conditions.

(With inputs from ANI)