Full Breakdown
U.S. Grants Zero Tariff on Select Specialty Drugs from India and 19 Other Nations
By Drooid · · How we work
Core Policy Change: Zero-Tariff Treatment for Designated Specialty Pharmaceuticals
The U.S. Department of Commerce announced a zero-percent ad valorem tariff for specified specialty medicines and their ingredients when they originate in India or any of 19 other jurisdictions. The exemption covers drugs limited to rare diseases, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody-drug conjugates, certain medical-countermeasure products, and animal-health pharmaceuticals, as well as the active pharmaceutical ingredients and key starting materials used to produce them.
Background & Context
President Donald Trump issued a proclamation on April 2 directing Section 232 of the Trade Expansion Act to raise duties on imported patented pharmaceuticals, biologics, and related ingredients, imposing a 100 % ad valorem tariff. Generic medicines and their ingredients were excluded.
Timeline
- April 2 – Proclamation announcing 100 % tariff on selected patented pharmaceuticals.
- July 31 – Initial 100 % tariff applied to companies named in the first annex.
- September 23 – BIS published a notice outlining the zero-tariff eligibility criteria.
- September 29, 2026 – Tariff regime takes effect for most companies not covered by the initial annex.
Eligible Jurisdictions and Product Categories
The zero-tariff list includes the following 20 jurisdictions:
- Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, United Kingdom, Vietnam
Products qualifying are those used to treat rare diseases, infertility, cell and gene therapies, ADCs, nuclear and plasma-derived medicines, and animal-health drugs, as well as related ingredients.
Data & Statistics
- The Pharmaceuticals Export Promotion Council of India reported Indian exporters shipped $30.46 billion of drugs and pharmaceutical products in FY 2024-25, with the United States among the top markets.
- In 2025, India’s pharmaceutical exports to the United States totaled $9.7 billion, about 38 % of India’s total pharma export value.
Official Statements & Responses
The Commerce Department’s Bureau of Industry and Security said the zero-tariff provision applies to products from jurisdictions that have a current or forthcoming trade and security framework agreement with the United States. Companies may request tariff relief for specialty drugs that address an urgent U.S. health need, providing product classification, active ingredients, manufacturer, country of origin, and the specific medical need. Requests are reviewed case-by-case with the USTR and HHS.
Impact on the Indian Pharmaceutical Industry
The exemption offers tariff-free access for Indian manufacturers of the listed specialty products, protecting cost competitiveness in the U.S. market. The relief is limited to the specified categories and does not extend to the broader portfolio of generic medicines that constitute the bulk of India’s U.S. exports.
Conflicting Reports & Gaps
Sources describe the zero-tariff eligibility criteria and jurisdiction list but do not disclose how many Indian firms are expected to qualify under the specialty-drug definition, nor timelines for reviewing urgent-need applications. Information on the administrative burden for companies seeking exemptions is absent.
What’s Next
Companies can submit applications for zero-tariff status for products that meet an urgent U.S. health need. The department will evaluate each request with the USTR and HHS. The broader tariff regime, including the 100 % duties on other patented pharmaceuticals, will be fully operational for most companies as of September 29, 2026.
