India Pharma Outlook Team | Wednesday, 30 September 2026
India is positioned to gain sharply as the US zeroes the tariff on key specialty drugs and their components.
Washington grants India and 19 other countries a full exemption from the new 100 percent duty on selected patented pharmaceuticals.
The zero-tariff window covers rare disease medicines, fertility treatments, cell and gene therapies, antibody-drug conjugates, and veterinary products, plus the critical ingredients.
This move creates a clear cost edge for Indian manufacturers just as the Commerce Department rolls out broader Section 232 tariffs aimed at boosting domestic production.
Indian contract manufacturers now see fresh openings in high-growth, high-margin areas while US patients secure continued access to limited-supply therapies.
The US Commerce Department notifies the exemption through the Federal Register as it prepares to enforce the 100 percent tariff on certain patented drugs and biologics.
Eligible products from India and the listed partners qualify for zero percent duty when they fall under an existing or forthcoming trade and security framework agreement with the United States.
Covered categories include:
One notice also lists nuclear medicines, plasma-derived therapies, and certain medicines that address chemical, biological, radiological, or nuclear threats. Generic medicines and their ingredients remain outside the Section 232 tariffs entirely.
Also Read: Why Global Pharma is Moving to India: The 2026 India CDMO Boom and Market Outlook
Antibody-drug conjugates and advanced cell and gene therapies rank among the fastest-growing, highest-margin segments in global pharma. Indian contract development and manufacturing organizations already expand capacity in these complex areas.
The zero-tariff treatment now applies to both finished products and the specialized components that go into them. This dual coverage lowers landed costs for shipments into the United States and strengthens India’s competitive position against producers in non-exempt jurisdictions.
Manufacturers that supply ADCs or cell and gene therapy intermediates can quote more aggressively while still protecting margins. The exemption therefore rewards the very capabilities Indian CDMOs have built over the past decade.
Orphan drugs and gene therapies often rely on only a handful of global suppliers. The Commerce Department carves these products out of the 100 percent tariff under Section 232 of the Trade Expansion Act. Officials cite both national-security considerations and the need to maintain health continuity for American patients who depend on these limited-supply therapies.
Keeping the duty at zero for goods originating from India and the other listed partners, the United States protects patient access while still pushing broader domestic manufacturing goals for ordinary patented medicines.
Companies may also apply case-by-case for tariff relief when a specialty product meets an urgent US health need; Commerce reviews those requests in consultation with the Trade Representative and the Department of Health and Human Services.
India’s overall pharmaceutical exports reached USD 30.46 billion in 2024-25, with the United States remaining a major market. Because the bulk of those shipments consists of generics that stay fully exempt, the new specialty-drug waiver adds a targeted upside rather than a broad overhaul.
Indian firms that already operate in ADCs, cell and gene therapies, or rare-disease manufacturing now hold a concrete cost advantage as the 100 percent tariff takes effect for non-exempt sources.
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