**Title: US Exempts Select Indian Specialty Drugs from 100% Tariff**
India has achieved a significant breakthrough in its trade relations with the United States, as the US has exempted certain specialty drugs and their associated ingredients from a recently expanded 100% tariff on pharmaceutical imports. This decision, which took effect on July 31 for an initial group of companies, was further extended on September 29 to include additional companies under Section 232 of the US Trade Expansion Act.
The exemption specifically applies to specialty medicines used for treating rare diseases, nuclear medicine, plasma-derived therapies, fertility treatments, as well as advanced therapies such as cell and gene therapies, antibody-drug conjugates, and products for animal health. However, it is important to note that generic drugs and their ingredients remain unaffected by the tariff for the time being.
The US is a critical market for Indian pharmaceuticals, accounting for approximately $10 billion in exports during the fiscal year ending March 2025. This figure represents around 35% of India's total pharmaceutical exports, which are predominantly in the form of generic medicines. The Pharmaceuticals Export Promotion Council of India reported that the country exported $24.15 billion worth of generics globally in FY25, solidifying its position as the world's largest exporter of generic drugs by volume.
Despite this partial relief, many patented medicines from India still face the broader tariff unless they qualify for a separate exemption. The US government has indicated that the tariff expansion is part of a strategy to reduce reliance on imported patented medicines and to stimulate domestic production. As of 2025, around 53% of patented pharmaceutical products available in the US were sourced from abroad, while only 15% of patented active pharmaceutical ingredients were manufactured domestically, according to White House data.
The timing of this tariff exemption coincides with the visit of Indian Commerce and Industry Minister Piyush Goyal to Washington, where he is scheduled to meet with US Trade Representative Jamieson Greer. This meeting is part of ongoing efforts by both nations to enhance trade relations and address various trade issues.
Overall, the exemption of select Indian specialty drugs from the US tariff marks a notable development in the pharmaceutical trade landscape, potentially benefiting both countries as they navigate complex trade dynamics.