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Washington: The United States has decided to exempt certain medicines and pharmaceutical products imported from India and 19 other countries from percentage-based tariffs. The move comes as Washington prepares to impose a 100% tariff on certain patented pharmaceutical drugs and related products.
The US Department of Commerce has published a list in the Federal Register identifying countries whose eligible pharmaceutical products will receive a 0% tariff treatment. India is among the 20 countries on the list, alongside Argentina, Bangladesh, Cambodia, Ecuador, the European Union, Indonesia, Japan, South Korea, Switzerland, the United Kingdom and Vietnam.
The tariff exemption assumes significance for the Indian pharmaceutical industry as the US prepares to impose higher duties on certain patented medicines and pharmaceutical products from September 29.
Which Medicines Will Get 0% Tariff?
According to the US notification, several categories of pharmaceutical products have been kept outside the new tariff regime.
These include medicines used to treat rare diseases, drugs used in fertility treatment, cell therapies, gene therapies and antibody-drug conjugates (ADCs). Certain ingredients and components used in these products will also qualify for the zero-tariff treatment.
Some veterinary medicines have also been included in the exemption.
The decision means companies exporting eligible products to the US will not face the additional tariff on those specified categories.
Why Is the Decision Important for India?
India is one of the world’s major manufacturers of generic medicines, while the US remains an important export market for Indian pharmaceutical companies.
The US Department of Commerce has also clarified that generic drugs and certain pharmaceutical inputs used in their production are not covered by the new pharmaceutical tariffs under Section 232.
The latest exemption applies to specified products originating from countries with existing or proposed trade and security arrangements with the United States.
Move Linked to US Push for Domestic Pharmaceutical Production
The US decision follows a proclamation issued by President Donald Trump on April 2 aimed at strengthening domestic production of patented medicines and pharmaceutical products.
While the United States is preparing higher tariffs on certain patented pharmaceutical products, the exemption for specific medicines and pharmaceutical categories provides relief to exporters dealing in those products.
For Indian pharmaceutical companies, the impact will therefore depend on the type of medicines and pharmaceutical inputs they export to the US, as the tariff treatment varies across product categories.
