India Among 20 Jurisdictions Exempted From US Tariff On Speciality Drugs
India is among 20 jurisdictions eligible for a zero per cent US tariff on certain specialty pharmaceutical products and associated ingredients, according to a notice issued by the US Commerce Department, even as Washington prepares to impose a 100 percent duty on certain patented pharmaceutical imports from September 29.
The exemption applies to covered products originating in jurisdictions with a current or forthcoming trade and security framework agreement with the US. It can also apply to products that the Commerce Department determines meet an urgent US health need.
The other jurisdictions listed are Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom and Vietnam.
The 100 per cent ad valorem tariff stems from an April 2 proclamation by US President Donald Trump under Section 232 of the Trade Expansion Act. The tariff took effect on July 31 for companies listed in one annex of the proclamation, while for other covered companies, it is scheduled to take effect on September 29.
The exemption is focused on specialty medicines, rather than the broader pharmaceutical trade. Covered products include medicines for which all approved indications are for orphan diseases, along with nuclear medicines, plasma-derived therapies and fertility drugs.
The list also includes cell therapy products, gene therapy products and antibody-drug conjugates, as well as certain medical countermeasures related to chemical, biological, radiological and nuclear threats. Animal-health pharmaceutical products and their associated ingredients are also covered.
The Commerce Department defines an orphan drug as a drug or biological product designated for one or more rare diseases or conditions where all approved indications are for such diseases. The notice also provides definitions for categories including fertility drugs, cell and gene therapies and antibody-drug conjugates.
Importantly for India, the Section 232 pharmaceutical tariffs do not currently apply to generic pharmaceutical products and their associated ingredients. Indian pharmaceutical exports have historically been heavily driven by generic medicines.
India exported drugs and pharmaceutical products worth $30.46 billion in 2024-25, according to the Pharmaceuticals Export Promotion Council of India, with the US among its major pharmaceutical export markets.
The Commerce Department has also created a process allowing companies to seek tariff relief for specialty pharmaceutical products that meet an urgent US health need. Applications must include details such as the product classification, active ingredients, manufacturer, country of origin and medical need. Requests will be reviewed case by case in consultation with the US Trade Representative and the Department of Health and Human Services.
The latest notice also makes technical changes to the US tariff schedule, including clarifying the definition of generic pharmaceutical articles and adding a zero-tariff provision for certain products imported solely for clinical trials, research and development or other non-commercial purposes.