Key Takeaway:
- India gets a 0% U.S. tariff exemption for Indian drugs, including specified specialty drugs and ingredients.
- Covered products include rare-disease drugs, fertility medicines, cell and gene therapies, and ADCs.
- Generic drugs remain exempt from the 100% Section 232 tariff, protecting a major part of India’s U.S. drug exports.
The United States is granting India and 19 other jurisdictions a zero tariff on specified specialty pharmaceuticals and ingredients as a 100% Section 232 duty takes effect on other covered imports.
U.S. Exempts Key Specialty Medicines
The U.S. Commerce Department’s latest notice provides a U.S. tariff exemption for Indian drugs, with zero tariff for qualifying specialty medicines from India, including orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody-drug conjugates and certain medical countermeasures. Animal-health pharmaceuticals are also covered.
The exemption also applies to associated pharmaceutical ingredients. The White House proclamation defines orphan drugs as medicines approved for rare diseases or conditions.
The Commerce Department said zero-tariff treatment is available for products from jurisdictions with current or forthcoming trade and security framework agreements with the United States. Products that Commerce determines are needed to address an urgent U.S. health need can also qualify.
100% Duty Targets Patented Drugs
The new rules come as the United States begins applying a 100% ad valorem tariff to specified patented pharmaceuticals and associated ingredients for companies not covered by other tariff arrangements. The measure took effect July 31 for companies listed in an earlier annex and applies to other covered companies from Sept. 29.
President Donald Trump’s April proclamation said the U.S. tariff exemption for Indian drugs was intended to address what the administration described as a national security risk from reliance on imported pharmaceuticals. The White House said the policy seeks to strengthen U.S. pharmaceutical manufacturing and supply chains.
The proclamation states that the United States is “heavily reliant on imports” of patented pharmaceuticals and notes that about 53% of patented pharmaceutical products distributed domestically were produced outside the country as of 2025.
Generic pharmaceuticals, including associated ingredients, are not currently subject to the Section 232 tariffs. The Commerce Department’s notice also clarifies the definition of generic pharmaceutical products and establishes zero-tariff treatment for certain medicines imported solely for clinical trials, research, development, or other noncommercial uses.
India Joins 19 Other Jurisdictions
India is among 20 jurisdictions listed for the specialty-drug exemption. The group also includes 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.
Companies can separately seek tariff relief when a specialty pharmaceutical meets an urgent U.S. health need. Applications must provide information including the product classification, active ingredients, manufacturer, country of origin, and the medical need supporting the request. Commerce will assess such applications individually with the U.S. Trade Representative and the Department of Health and Human Services.
The policy is significant for India’s pharmaceutical sector, particularly following the U.S. tariff exemption for Indian drugs, which exported $30.46 billion in drugs and pharmaceutical products during fiscal 2024-25, according to the Pharmaceuticals Export Promotion Council of India. The United States is among India’s major pharmaceutical export markets.
The White House said the tariff policy is intended to make U.S. pharmaceutical manufacturing “safe, secure, and healthy,” while the new Commerce rules preserve zero-tariff access for specified specialty products from eligible jurisdictions.
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