India specialty pharma zero tariff treatment will apply to qualifying medicines and pharmaceutical ingredients entering the United States under new Commerce Department rules. India is among 19 eligible jurisdictions as Washington prepares to apply a 100% Section 232 tariff to many covered patented drugs from September 29.
Specialty drugs
The Commerce Department’s Bureau of Industry and Security has defined several categories that can receive a zero tariff when they meet the required conditions.
They include orphan drugs used for rare diseases, nuclear medicines, plasma-derived therapies, fertility treatments, cell therapies, gene therapies, antibody-drug conjugates and medical countermeasures for chemical, biological, radiological and nuclear threats. Animal-health pharmaceutical products are also covered.
The exemption is not automatic for every medicine exported from India. A qualifying product must come from an eligible jurisdiction with a current or forthcoming US trade and security framework agreement, or Commerce must determine that it meets an urgent US health need.
Section 232
President Donald Trump’s April 2 proclamation imposed a 100% ad valorem tariff on specified patented pharmaceutical products and associated ingredients under Section 232 of the Trade Expansion Act.
The duty began on July 31 for companies listed in the proclamation’s annex and takes effect on September 29 for other covered companies. Some countries and companies qualify for reduced or zero rates under separate provisions.
Washington says its objective is to reduce dependence on foreign patented medicines and active pharmaceutical ingredients while encouraging more domestic pharmaceutical manufacturing.
Generic drugs
Generic medicines remain outside the Section 232 pharmaceutical tariffs for now. The exemption also covers associated generic ingredients and biosimilar products.
That distinction is particularly important for India because the country is a major supplier of lower-cost generic medicines to the US market. The Commerce Department can review the treatment of generics in the future, but they are not currently subject to the new 100% duty.
India exports
India appears on the Commerce Department’s eligible-jurisdiction list 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.
For Indian pharmaceutical exporters, the change creates an important exception within an otherwise much tougher tariff regime. Companies supplying qualifying specialty treatments may retain zero-tariff access even while other patented products face substantially higher duties.
However, the benefit should not be described as a blanket pharmaceutical exemption for India. Eligibility depends on the specific product category and the conditions established by Commerce.
Urgent health
Commerce has also created a process for companies to seek zero-tariff treatment when a pharmaceutical product meets an urgent US health need.
Applicants must provide information including the medicine involved, its tariff classification, manufacturer, country of origin and the medical reason the product is needed. Commerce will review each request with the US Trade Representative and the Department of Health and Human Services.
The policy creates a two-track system: Washington is imposing steep tariffs on many patented medicines to encourage US production, while protecting access to specialized treatments where alternative supplies may be limited.
For India, that means the September 29 tariff change brings both pressure and opportunity. Ordinary covered patented medicines could face much higher duties, while qualifying specialty pharmaceuticals, generics and certain approved products remain protected from the 100% rate.
