Why in news?
The Union Budget 2026‑27 announced that 17 drugs used to treat various cancers and seven categories of medicines for rare diseases will be exempt from basic customs duty (BCD). The move is meant to lower treatment costs for patients and broaden the list of medicines that can be imported duty‑free. It follows earlier reductions in duty on personal imports and signals continued rationalisation of the customs duty structure.
Background
Basic Customs Duty is a tax levied under the Customs Act, 1962 on goods imported into India. The duty protects domestic industries, regulates trade and generates revenue. When a product enters the country, customs officers classify it according to the tariff schedule, assess its value based on cost, insurance and freight (CIF), and apply the prescribed rate. Over time the government has introduced additional levies—such as countervailing duty, social welfare surcharge and anti‑dumping duty—to address specific concerns like dumping or social welfare.
Recent exemption and other duties
- Cancer and rare disease drugs: The Budget waived BCD on 17 chemotherapy and immunotherapy medicines and expanded duty‑free access to medicines for seven more rare diseases. Previously, imports of 112 lifesaving medicines received relief; the latest addition brings the total to 129 medicines and 58 rare disease categories.
- Tariff rationalisation: The tariff rate for dutiable personal imports was reduced from 20 percent to 10 percent, easing costs for individuals purchasing items from abroad.
- Other customs duties: India imposes several kinds of customs charges. Countervailing duty offsets subsidies granted by exporting countries. Anti‑dumping duty protects domestic producers against below‑cost imports. Safeguard duty is applied when sudden import surges threaten local industries. Additional duties like the Social Welfare Surcharge and National Calamity Contingent Duty help fund welfare programmes and disaster relief.
Significance
- Exempting duty on life‑saving drugs reduces treatment costs for cancer patients and those with rare diseases, making therapies more affordable.
- Widening the list of medicines eligible for duty‑free import reflects India’s commitment to universal health coverage and aligns with global efforts to improve access to affordable treatments.
- Tariff rationalisation simplifies the customs regime and reduces the burden on genuine personal imports, helping individuals and small traders.
Source: TH
