The United States has exempted certain specialty pharmaceutical products and their associated ingredients imported from India from its new 100% tariff regime, providing relief to Indian drugmakers even as Washington imposes steep duties on specified patented medicines.
The zero-tariff treatment covers selected medicines used for rare diseases, infertility treatments, cell therapies and gene therapies, along with antibody-drug conjugates and certain animal pharmaceuticals. The exemption also extends to qualifying ingredients and components used to make these products.
India is among 20 countries and jurisdictions included in the US list eligible for the exemption. The list also includes Japan, South Korea, the UK, Switzerland, Thailand, Vietnam and members of the European Union.
The move comes as the US expands a 100% additional tariff on certain patented pharmaceutical products and associated ingredients from September 29. The tariff regime was introduced under Section 232 of the US Trade Expansion Act, with the stated aim of encouraging greater pharmaceutical manufacturing in the United States.
The latest exemption is not a blanket waiver for Indian pharmaceutical exports. It applies only to specific categories identified under the US rules. Patented medicines outside those categories can remain subject to the 100% tariff unless they qualify for another exemption or tariff arrangement.
A key point for Indian pharmaceutical companies is that generic medicines are not covered by the Section 232 pharmaceutical tariffs under the US Commerce Department’s guidance. This means India’s large generic drug exports to the US are not directly affected by this particular 100% duty.
The exemption is particularly relevant for specialty medicines, which are generally more complex and expensive to develop and manufacture than conventional drugs. These include treatments for rare diseases, fertility-related medicines, advanced cell and gene therapies and targeted cancer treatments such as antibody-drug conjugates.
The US rules also cover certain nuclear medicines, plasma-derived therapies and medical countermeasures for chemical, biological, radiological and nuclear threats. Eligible ingredients used in qualifying medicines also receive zero-tariff treatment.
The tariff changes stem from a presidential proclamation issued in April that introduced additional duties on patented pharmaceuticals, biologics and related ingredients. The policy was designed to encourage companies to increase production within the US and reduce dependence on overseas pharmaceutical supply chains.
The new duties initially took effect on July 31 for companies covered under one category of the proclamation. From September 29, the tariff regime expanded to other companies and products falling within its scope.
The exemption provides some relief to India’s pharmaceutical industry, which has a major presence in the US market. Indian drugmakers supply a large volume of medicines to American patients, particularly in the generic segment. Several Indian companies also have growing businesses in specialty pharmaceuticals, complex generics and advanced therapies.
Industry representatives have welcomed the exemption but have also indicated that it may not provide complete long-term certainty for exporters. Concerns remain over the possibility of future tariff changes and the broader trade relationship between India and the US. Industry groups are also seeking greater clarity and stability in the rules governing pharmaceutical exports.
The immediate impact is being closely watched by investors and pharmaceutical companies with significant exposure to the US market. Shares of several Indian drugmakers gained attention after the exemption was announced, while the Nifty Pharma index also outperformed the broader market during trading on September 29.
The US decision is also significant from a healthcare perspective. Specialty medicines often treat conditions affecting relatively small patient populations, including rare diseases, and can involve high research, manufacturing and treatment costs. Avoiding an additional import duty can help prevent further pressure on the cost structure of such medicines entering the US market.
At the same time, the exemption does not remove all trade-related risks for Indian pharmaceutical companies. Products must meet the specific classifications and conditions set out by US authorities to qualify for zero additional duty. Companies exporting patented medicines outside the exempt categories will continue to assess the impact of the new tariff framework.
The Commerce Department’s September 23 guidance provides the classification framework for pharmaceutical products and ingredients covered by the new rules. US Customs and Border Protection has subsequently issued instructions to importers, brokers and filers on how the new tariff provisions should be applied.
The latest policy creates a mixed picture for Indian pharma. Generic exports remain outside the new Section 232 tariffs, while several important specialty medicine categories have received zero-tariff treatment. Certain patented pharmaceutical products, however, remain exposed to the 100% duty.
The exemption therefore offers targeted relief rather than a broad removal of US pharmaceutical tariffs. Indian drugmakers will continue to monitor the rules closely as they assess pricing, production locations, supply chains and investment plans in the US market.
