US tariff relief for India: Speciality drugs, gene therapies get 100% duty exemption

Washington: India and 19 other countries and jurisdictions have been exempted from the United States' 100 per cent import tariff on certain patented pharmaceutical products and related components, following a notification by the US Commerce Department.

The exemption covers speciality medicines used to treat rare diseases, fertility treatments, advanced cell and gene therapies, antibody-drug conjugates (ADCs) and veterinary pharmaceuticals. Key components used in manufacturing these products are also eligible for zero-duty treatment.

The list of beneficiaries includes India, 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.

According to official notices, products originating from these countries qualify for the exemption under existing or forthcoming trade and security framework agreements with Washington. The eligible jurisdictions have been listed in a Federal Register notification issued by the Commerce Department.

The move comes as the US implements a 100 per cent tariff on specified patented pharmaceutical products under a directive issued by President Donald Trump in April. The measure was introduced under Section 232 of the Trade Expansion Act, which allows the US to impose duties on imports on national security grounds.

The April 2 proclamation imposed the tariff on certain patented drugs, biologics and related ingredients as part of efforts to boost pharmaceutical manufacturing in the US. The duties took effect on July 31 for companies covered by an initial annex, with the measures extending to additional listed companies from September 29.

Generic medicines and their ingredients, however, remain exempt from the pharmaceutical tariffs under Section 232, the Commerce Department said.

The latest regulatory changes also clarify the scope of the tariff framework. The definition of "generic pharmaceutical articles" has been revised to explicitly include unpatented animal health products.

The department has also clarified that "pharmaceutical articles" refers to finished medicines, active pharmaceutical ingredients and key starting materials.

The World Customs Organisation defines an ad valorem tariff as "a set percentage of the monetary value of the goods to be taxed".