The United States has announced a zero per cent tariff on certain speciality pharmaceutical products and their associated ingredients imported from India and 19 other countries. This decision comes as Washington prepares to impose a 100 per cent tariff on specified patented pharmaceutical products and ingredients from September 29. The exemption covers medicines used for rare diseases and several other specialised treatments.

The move is part of the US administration's wider changes to pharmaceutical imports under Section 232 of the Trade Expansion Act. A zero tariff means eligible medicines from India will not face an additional percentage-based import duty. However, the exemption applies only to specified categories and should not be understood as a blanket waiver for all Indian medicines. Generic medicines and their associated ingredients are also outside the scope of the Section 232 pharmaceutical tariffs at present.

What Is An Ad Valorem Tariff?

An ad valorem tariff is an import tax calculated as a percentage of the value of a product. For example, a 10 per cent ad valorem tariff on a medicine worth $1,000 would mean an additional $100 in tariff. In this case, the US has set the ad valorem tariff rate at zero per cent for eligible speciality pharmaceutical products from the listed countries. This means qualifying products will not attract the additional percentage-based tariff when imported into the US.

Which Medicines Are Eligible For Zero Tariff?

The US Commerce Department's notice identifies several categories of speciality pharmaceutical products that can qualify for the zero tariff rate. These include:

  • Rare disease medicines: Drugs where all approved indications are designated for rare diseases or conditions.
  • Fertility treatments: Certain medicines used in infertility treatment.
  • Cell therapies: Specialised treatments that use cells as part of medical treatment.
  • Gene therapies: Treatments that work by modifying or using genetic material.
  • Antibody-drug conjugates (ADCs): Targeted medicines that combine antibodies with drug components.
  • Plasma-derived therapies: Treatments made using components obtained from blood plasma.
  • Animal health products: Certain medicines and biological products used to diagnose, treat or prevent diseases in animals.

Associated ingredients used in these eligible products can also receive the zero per cent tariff treatment.

India Is Among 20 Eligible Countries

India is one of 20 jurisdictions listed by the US Commerce Department for the zero-tariff treatment. The list also includes 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.

According to the Commerce Department, the qualifying products from these jurisdictions can receive the zero tariff because the countries have current or forthcoming trade and security framework agreements with the US.

Why Is The US Imposing A 100% Pharmaceutical Tariff?

The zero-tariff announcement comes against the backdrop of a broader US policy aimed at changing pharmaceutical imports and encouraging greater drug manufacturing within the country. On April 2, 2026, President Donald Trump issued a proclamation covering imports of pharmaceuticals and pharmaceutical ingredients. It provided for tariffs on certain patented pharmaceutical products and associated ingredients, with the measures taking effect for specified companies from July 31 and for other covered companies from September 29.

The policy is linked to efforts to boost domestic pharmaceutical production and address US economic and national security concerns.

What About Generic Medicines?

Generic pharmaceutical products and their associated ingredients are not currently subject to the Section 232 pharmaceutical tariffs. This distinction is relevant for India because the country's pharmaceutical industry has a major presence in the global generic medicines market. Therefore, the new tariff framework does not mean that all medicines exported from India to the US will suddenly face a 100 per cent duty.

The Commerce Department has also clarified definitions within the pharmaceutical tariff framework, including what qualifies as a pharmaceutical article and a generic pharmaceutical product.

The exemption means eligible Indian speciality medicines can enter the US without the additional ad valorem tariff. This could reduce the potential tariff-related cost burden for companies exporting qualifying products to the American market.

However, the relief is limited to products and ingredients that meet the specified conditions. It does not provide a blanket exemption to India's entire pharmaceutical sector.

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