The United States has announced that certain speciality medicines and the ingredients used to make them from India and 19 other partner jurisdictions will face zero import duty.
The decision comes as the US moves ahead with a 100 percent tariff on certain patented pharmaceutical products.
The US Commerce Department has published an official list in the Federal Register naming the countries and jurisdictions whose eligible pharmaceutical products can get the zero-tariff treatment.
Which medicines are covered?
The zero-tariff treatment does not apply to all medicines. It is limited to certain speciality pharmaceutical products. These include medicines used to treat rare diseases, as well as nuclear medicines, plasma-derived therapies and fertility drugs.
The waiver also covers cell and gene therapies, antibody-drug conjugates (ADCs) and some medicines used to respond to chemical, biological, radiological and nuclear threats. Certain animal medicines are also included, according to reports.
The Commerce Department defines an orphan drug as a drug or biological product that has been designated for one or more rare diseases or conditions, where all approved uses of the drug are for those diseases or conditions.
The ingredients and other key components used to make these medicines are also covered by the zero per cent tariff.
What is the 100% tariff on pharmaceutical products?
The US had announced a 100 per cent ad valorem tariff, meaning a tariff based on the value of the product, on certain licensed pharmaceutical products and their ingredients.
The tariff was announced under Section 232 of the Trade Expansion Act.
It took effect on July 31 for companies listed in one annex to Trump’s announcement. For other companies covered by the measure, the tariff is scheduled to apply from September 29.
However, the Commerce Department has clarified that the Section 232 pharmaceutical tariffs do not currently apply to generic medicines and their associated ingredients.
According to the Pharmaceuticals Export Promotion Council of India, India exported $30.46 billion worth of drugs and pharmaceutical products in 2024-25, with the US among its biggest markets.
India among 20 countries and jurisdictions
The Commerce Department’s Bureau of Industry and Security said the speciality products can qualify for a zero tariff if they come from countries that have, or are expected to have, a trade and security agreement with the US.
India has been included along with Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, the United Kingdom and Vietnam.
The World Customs Organisation defines an ad valorem tariff as “a set percentage of the monetary value of the goods to be taxed”.
The Commerce Department has also created a route for companies to seek tariff relief for speciality medicines that are needed to address an urgent health need in the US.
Companies applying for such relief have to provide details including the product’s classification, active ingredients, manufacturer, country of origin and the medical need involved.
The Commerce Department will consider these requests case by case, in consultation with the US Trade Representative and the Department of Health and Human Services.