April 3 (Reuters) - Asian healthcare stocks surged on Thursday, led by Indian generic drugmakers, defying the drop in the broader market, after U.S. President Donald Trump's wide-ranging reciprocal tariffs exempted pharmaceutical products.
Trump imposed a 10% tariff on most U.S. imports as well as much higher levies on dozens of rivals and allies alike, but temporarily exempted some goods, including pharmaceuticals, benefiting major exporters like India and Japan.
The U.S. bought a third, or $9 billion worth, of all Indian pharma exports last fiscal year, most of which were of generic drugs that are cheaper, copycat versions of top-selling medicines. Japan's exports to the U.S. were about $6.34 billion in 2023, according to data and research firm OEC.
Indian pharma companies, which rely on the U.S. for a major portion of their revenue, "can breathe easy for now," Jefferies' analysts said, but cautioned that tariffs at a later date could not be ruled out.
The country's pharma stocks index rallied more than 3%, set for its biggest one-day gain in 10 months, while the benchmark Nifty 50 was down 0.25%.
Sun Pharma, Cipla and Dr Reddy's, India's top three drugmakers by sales, gained between 3% and 6%.
In Japan, Takeda and Daiichi Sankyo advanced 2% and 2.7%, respectively, while the benchmark Nikkei index sank to an eight-month low.
The Pharmaceuticals Export Promotion Council of India (Pharmexcil), a government-backed trade body, said the U.S. exemption would strengthen the healthcare partnership between the countries.
Besides selling generic drugs in the U.S., Indian companies also offer contract manufacturing services to U.S. companies, a market that is expected to surge sevenfold by 2035, according to Boston Consulting Group.
Reporting by Kashish Tandon in Bengaluru and Rishika Sadam in Hyderabad; Editing by Savio D'Souza
Source: Reuters