The US has implemented its 100% tariff on specified patented pharmaceutical products and their associated ingredients today, but qualifying specialty medicines from India will be eligible for zero duty. According to Business Standard, the US Commerce Department has formally notified eligible countries and product categories through the Federal Register, offering potential relief to parts of the pharmaceutical industry. The Nifty Pharma index gained more than 1% on Tuesday, significantly outperforming the benchmark Nifty 50, which declined 0.55% intraday. The Nifty Pharma index has gained around 18% in 2026 so far, outperforming Nifty 50, which has fallen around 13% at the same time, though pharma stocks have seen sharp upswings and downswings amid Trump's constant tariff flip-flops throughout the year.
The US Commerce Department has published a list of countries exempted from a 100% tariff on specialty pharmaceutical imports as part of President Trump's April proclamation. According to Mint, the zero-tariff exemption covers medicines and related products used for rare diseases, infertility treatments, cancer and other specialised conditions, along with key components used to manufacture these products. The exemption takes effect September 29, 2026, covering patented pharmaceuticals and associated ingredients from the exempted countries. The exemption covers a range of speciality pharmaceuticals, including rare-disease drugs for which all approved uses are designated as orphan indications, nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapies, and antibody-drug conjugates. It also includes medical countermeasures for chemical, biological, radiological and nuclear threats, along with animal health products, with the exemption extending to ingredients used in these products.
Besides India, the other countries in the zero tariff rate category are 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. As reported by Mint, goods from these jurisdictions qualify for a 0% tariff if they are covered by an existing or forthcoming trade and security framework agreement with the US. The exemptions are part of the implementation of Trump's April proclamation adjusting imports of pharmaceuticals and pharmaceutical ingredients under Section 232 of the Trade Expansion Act. The Commerce Department notice specifically states that India is among 20 countries and jurisdictions included in the zero-tariff list, with the exemption applying specifically to eligible speciality pharmaceutical products and not covering all medicines imported from India.
Dr Reddy's Laboratories led the pharma sector gains with shares trading at ₹1,243.20, up 1.82%, followed by Sun Pharma at ₹1,853.90, up 0.87%, and Lupin at ₹2,076.00, up 0.68%. According to ET Now, of the 20 stocks under the Nifty Pharma index, 17 stocks traded in the green, while only three stocks witnessed a decline. The Nifty Pharma was among the top-performing sectors on September 29, with Wockhardt at ₹2,199.00, up 0.52%, Laurus Labs at ₹2,020.70, up 0.50%, and Cipla at ₹1,390.00, up 0.46% also posting significant gains. Other notable performers included Torrent Pharma at ₹4,884.50, up 0.32%, Biocon at ₹376.05, up 0.31%, Zydus Lifesciences at ₹1,217.60, up 0.21%, Glenmark Pharmaceuticals at ₹2,330.40, up 0.20%, and Divi's Laboratories at ₹9,562.00, up 0.13%. The strong market response reflects investor confidence in the tariff exemption benefits for Indian pharmaceutical companies.
According to The Economic Times, India has the most at stake among generic drug exporters with the US importing $213 billion worth of pharmaceutical products in 2025. India exported $25.8 billion of pharmaceuticals worldwide in 2025, out of which $9.7 billion, or nearly 38%, went to the US, making America India's largest pharmaceutical export market. Indian companies supply 47% of all generic prescriptions dispensed in the US, making India the country's largest source of affordable generic medicines. The exemption provides relief to Indian pharmaceutical companies that have been facing uncertainty due to Trump's tariff policies throughout 2026, though the tariff is mainly relevant to covered patented medicines and associated ingredients rather than generic drugs. As reported by Mint, generic medicines will not face the new Section 232 tariffs, with the exemption also covering ingredients used to make these drugs, offering additional protection to Indian pharma companies.
