INDIA FIRST TO MARKET

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INDIA FIRST TO MARKET

Asia Pacific Equity Research

India First to Market 23 July 2026

Top Stories

India’s Rupee: Groundhog Day? (Sajjid Z Chinoy)

An ostensible objective of the slew of measures the RBI announced on June 5th to attract capital inflows was to stabilize

expectations in the Rupee market. By all accounts, the RBI always had a sufficient buffer stock of FX reserves to cover gross

financing requirements. Instead, Dollar hedging behavior had spiked in April and May pushing the Rupee into a self-fulfilling

spiral – wherein increased dollar hedging resulted in a weaker rupee driving even more hedging -- as we had previously

demonstrated. The June 5th measures were therefore meant to act as a circuit-breaker in the FX market. To be sure, they

served their initial purpose with the hedging spike observed in April and May fully reversing in June and helping bring some

calm to the Rupee market.

India Pharma (Bansi Desai, CFA)

U.S. generics tariff headlines return: Pass-through likely to limit the impact

Reuters reported comments from President Trump indicating that tariffs on imported generic drugs and biosimilars would

remain at 0% for two years from 1 Aug 2026, then rise to 100% for one year (2028) and 200% thereafter, with the policy aimed

at reshoring generic manufacturing into the US. While this looks negative on the surface, we see limited fundamental impact: 1)

generic demand is relatively inelastic and sector margins are thin (typically <20%), making pass-through the most likely

response if tariffs are implemented and sustained; and 2) reshoring is structurally difficult given the cost disadvantage of U.S.

manufacturing (often cited as 2-4x more expensive) and the complexity of relocating regulated capacity. Our U.S. analyst Chris