New Delhi: In a matter of good news for Indian medicine suppliers, the United States has decided to exempt India and 19 other nations from ad valorem tariffs on specialty drugs and active ingredients used for rare medical conditions, ahead of a sweeping 100 percent tariff on patented pharmaceutical imports taking effect September 29, 2026. In the recent development, the US Commerce Department published the list of eligible nations in the Federal Register, confirming zero-duty treatment for critical therapies, such as orphan drugs, nuclear medicines and gene therapies to prevent domestic healthcare disruptions and maintain supply chain security.
Policy Background & Trade Framework
The exemption arrives amid broader US trade measures designed to onshore drug manufacturing and curb import dependence on foreign pharmaceutical products. Under a presidential proclamation invoking trade expansion provisions, Washington scheduled a 100 percent tariff on foreign patented medicines and associated inputs beginning September 29, 2026. However, to safeguard access to vital life-saving treatments, the US Commerce Department carved out specific non-taxable categories for trusted trade partners.
President Donald Trump’s proclamation to impose tariffs
On April 2, President Donald Trump issued a proclamation to impose tariffs on imports of patented pharmaceuticals, biologics, and associated ingredients into the US as part of efforts to encourage domestic production.
Eligible products for the zero per cent tariff rate include all drugs designated for rare diseases, infertility treatments, cell therapies, gene therapies, antibody-drug conjugates (ADCs), and animal pharmaceuticals. Components of these drugs are also subject to a zero per cent tariff rate.
Which are the other countries in the zero tariff rate category?
Besides India, the other countries in the zero tariff rate category are Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, Britain and Vietnam.
The notice said qualifying products from these jurisdictions could receive a zero per cent tariff because they have a current or forthcoming trade and security framework agreement with the US, a report by PTI news agency said.
The exemptions are part of the implementation of Trump’s April proclamation adjusting imports of pharmaceuticals and pharmaceutical ingredients under Section 232 of the Trade Expansion Act. The proclamation imposed a 100 per cent tariff on specified patented pharmaceuticals and ingredients.
(With inputs from agencies)
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