India among 20 jurisdictions exempted from US tariff on speciality drugs

India is among 20 jurisdictions that will be eligible for a zero per cent US tariff on certain speciality pharmaceutical products and associated ingredients, according to a notice issued by the US Commerce Department.

The exemption comes as Washington prepares to impose a 100 per cent tariff on certain patented pharmaceutical products and related ingredients from September 29 under Section 232 of the Trade Expansion Act. The measure was introduced by US President Donald Trump in an April 2 proclamation aimed at adjusting pharmaceutical imports.

The Commerce Department’s Bureau of Industry and Security said products covered by the exemption can receive a zero tariff when they originate in jurisdictions with a current or forthcoming trade and security framework agreement with the US. The exemption can also apply to products that Commerce determines meet an urgent US health need.

India is listed alongside 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.

Which drugs are covered

The tariff exemption is targeted at speciality medicines rather than the broader pharmaceutical trade.

The Commerce Department’s notice includes drugs where all approved indications are for orphan diseases, as well as nuclear medicines, plasma-derived therapies and fertility drugs.

It also covers cell therapy products, gene therapy products and antibody-drug conjugates. Certain medical countermeasures related to chemical, biological, radiological and nuclear threats are included as well.

More from Business

Animal-health pharmaceutical products are also covered by the zero-tariff provision. Associated ingredients used in these products are eligible under the same framework.

The notice 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. It also sets out definitions for categories such as fertility drugs, cell and gene therapies and antibody-drug conjugates.

100% tariff takes effect for other covered products

Trump’s April proclamation imposed a 100 per cent ad valorem tariff on certain patented pharmaceutical products and associated ingredients.

The tariff took effect on July 31 for companies listed in one annex of the proclamation. For other covered companies, it is scheduled to take effect on September 29.

The Commerce Department said the Section 232 pharmaceutical tariffs do not currently apply to generic pharmaceutical products and their associated ingredients. This distinction is particularly relevant for India, whose pharmaceutical exports to the US have historically been driven heavily by generic medicines.

The Indian pharmaceutical industry exported drugs and pharmaceutical products worth $30.46 billion in the 2024-25 financial year, according to the Pharmaceuticals Export Promotion Council of India. The US is among India’s major pharmaceutical export markets.

Companies can seek relief for urgent health needs

The Commerce Department has also created a process under which companies can seek tariff relief for speciality pharmaceutical products that meet an urgent US health need.

Applications must provide details including the product’s classification, active ingredients, manufacturer, country of origin and the medical need involved. Commerce will review such requests on a case-by-case basis 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. These include 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.