The Indian pharmaceutical industry has remained relatively unaffected so far from the broader policy shifts happening in the US, including relating to tariffs. However, the direction of further changes in the regulatory or the policy landscape in the US remains a source of uncertainty and is therefore a risk overhang.

• ICRA forecasts the revenues of its sample set of Indian pharmaceutical companies to grow by 9-11% in FY2026 and 6-8% in FY2027, after growing by around 10% in FY2025. Moderation in revenue growth in FY2027 is likely to be largely driven by lower growth in the US market.
• Domestic market: Revenue growth of ICRA’s sample set of companies in the domestic market is expected to be 8-10% in both FY2026 and FY2027. In H1 FY2026, the revenues grew by 6.5% on the back of market share gains for some players in chronic therapies, volume expansion, and continued benefits from new product introductions. However, the same was partly impacted by the implementation of the goods & services tax (GST) 2.0 with effect from September 22, 2025, as some distributors recalibrated purchases to avoid complexities in taxation.