US exempts India and 19 nations from 100% tariff on certain speciality drugs: Report

The United States will not impose an ad valorem tariff on certain speciality drugs and related ingredients imported from India, even as Washington prepares to levy a 100% tariff on specified patented pharmaceutical products from September 29, PTI reported on Monday.

An ad valorem tariff is a tax charged as a fixed percentage of the monetary value of imported goods.

The zero-tariff treatment covers drugs used to treat rare diseases and infertility, as well as cell therapies, gene therapies, antibody-drug conjugates (ADCs) and animal pharmaceuticals.


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Components used in these products will also qualify for the zero tariff, the report said.

The exemption is part of the implementation of US President Donald Trump's April proclamation imposing tariffs on imports of patented pharmaceuticals, biologics and associated ingredients under Section 232 of the Trade Expansion Act.

The measure is aimed at encouraging greater pharmaceutical production in the US.

India is among 20 countries and jurisdictions included in the US Commerce Department's zero-tariff list. The list was published in the Federal Register as the department prepares to implement the 100% tariff on specified patented pharmaceutical imports and their associated ingredients.

Other jurisdictions eligible for the zero tariff include 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 Commerce Department notice said qualifying products from these jurisdictions could receive the zero tariff because the countries have a current or forthcoming trade and security framework agreement with the US, as per the report.

The exemption applies specifically to eligible speciality pharmaceutical products and does not cover all medicines imported from India. Generic pharmaceutical products and their associated ingredients are not subject to the Section 232 pharmaceutical tariffs, according to the Commerce Department notice.

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Trump's April proclamation introduced the 100% tariff on specified patented pharmaceuticals and ingredients, with the measure taking effect on July 31 for companies named in one annex. It will apply to other covered companies from September 29.

The latest notice also makes technical corrections to the original proclamation. These include an amendment to the definition of “generic pharmaceutical articles” to explicitly include unpatented animal health products.

It also clarifies that “pharmaceutical articles” covers finished pharmaceutical products, their active pharmaceutical ingredients and the key starting materials used to make those ingredients.