US Exempts India, 19 Other Nations From 100% Tariff on Select Specialty Drugs

New Delhi, Sep 29 (KNN) The United States has exempted certain specialty pharmaceutical products and associated ingredients imported from India and 19 other countries from a planned 100 per cent ad valorem tariff, providing relief for qualifying medicines used to treat rare and specialised medical conditions.

The US Commerce Department published the relevant country list as the new Section 232 pharmaceutical tariff framework takes effect. The 100 per cent tariff applies to specified patented pharmaceuticals and associated pharmaceutical ingredients, with different treatment provided for certain products and jurisdictions, PTI reported.

Rare Disease And Specialised Medicines Exempted

Products eligible for the zero tariff include medicines designated for rare diseases, fertility drugs, cell and gene therapies, antibody-drug conjugates and certain other specialty pharmaceuticals. Animal health pharmaceutical products are also covered.

The other jurisdictions listed alongside India are Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, the UK and Vietnam.

The exemption applies where qualifying products originate in jurisdictions with a current or forthcoming trade and security framework agreement with the US, subject to the conditions specified under the Section 232 framework.

Generic Drugs Outside Tariff Scope

The US Commerce Department has clarified that generic pharmaceutical products and their associated ingredients are not subject to the Section 232 pharmaceutical tariffs at present.

The broader tariff framework stems from a presidential proclamation issued on April 2 under Section 232 of the Trade Expansion Act of 1962. 

The proclamation imposed a 100 per cent tariff on specified patented pharmaceutical imports and associated ingredients, with the measure applying to additional covered companies from September 29.

Implications For Indian Pharmaceutical Exporters

The zero-tariff treatment could help Indian pharmaceutical companies supplying qualifying specialty medicines and ingredients to the US avoid the additional Section 232 duty.

However, the exemption is product- and jurisdiction-specific and does not cover all pharmaceutical exports. Indian exporters will therefore need to determine whether individual products meet the definitions and eligibility conditions under the US framework.

The Commerce Department has also issued technical clarifications to the tariff rules, including definitions covering pharmaceutical products, active pharmaceutical ingredients and key starting materials.

(KNN Bureau)