Zero Tariff for Orphan Drugs: US Grants India, 19 Others Relief Ahead of Sept 29 Deadline

India is among 20 nations spared from a sweeping US tariff on patented pharmaceuticals taking effect September 29

September 29, 2026

100% Tariff, Key Exemptions: What's Changing for Indian Pharma

Big Relief for Indian Pharma: US Exempts Rare-Disease Drugs From New Tariff Regime

The United States will not charge any ad valorem tariff on certain specialty drugs and associated ingredients used to treat rare medical conditions when imported from India and 19 other countries, even as a sweeping 100 per cent tariff on patented pharmaceutical imports takes effect from September 29.

The US Commerce Department published the list of exempted countries in the Federal Register as it prepares to enforce the broader tariff on patented pharmaceuticals and their associated ingredients. Besides India, the zero-tariff category includes 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.

What qualifies for the exemption

Eligible products under the zero per cent tariff rate include drugs designated for rare diseases, infertility treatments, cell therapies, gene therapies, antibody-drug conjugates and animal pharmaceuticals, along with the components used to manufacture them. The stated goal is to prevent disruption to domestic healthcare supply chains for critical therapies such as orphan drugs, nuclear medicines and gene therapies, while maintaining supply-chain security.

Background: the broader pharma tariff push

The exemption traces back to a proclamation President Donald Trump issued on April 2, imposing tariffs on patented pharmaceuticals, biologics and associated ingredients as part of a push to encourage domestic drug manufacturing in the US. That 100 per cent tariff took effect on July 31 for companies named in an initial annex and expands to cover other listed companies from September 29. Generic pharmaceutical products and their associated ingredients remain entirely outside the scope of these Section 232 tariffs.

What this means for India

The relief comes as a notable positive for Indian drugmakers, whose specialty and generic pharmaceutical exports form a significant part of India-US trade. India exports roughly USD 8.7 billion worth of pharmaceutical products to the US against roughly USD 800 million in US pharma imports into India, according to earlier industry figures, with Indian companies supplying a substantial share of prescriptions filled in the US. The exemption follows a February 2026 framework agreement between the two countries on an interim trade deal, under which the US had committed to removing tariffs on select Indian goods, including pharmaceuticals, subject to national security review.

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