Introduction: Patient-Centric Healthcare Relief
In a significant move aimed at easing the financial burden on cancer patients and families dealing with rare diseases, Finance Minister Nirmala Sitharaman announced on February 1, 2026, that basic customs duty will be fully exempted on 17 cancer drugs and medicines. Additionally, seven more rare diseases have been added to the list eligible for duty-free personal imports of drugs, medicines, and Food for Special Medical Purposes (FSMP) used in their treatment.
The announcement came during Sitharaman’s historic ninth consecutive Union Budget presentation and represents one of the most targeted patient-centric measures in Budget 2026-27, offering tangible financial relief to thousands of families navigating the devastating costs of cancer and rare disease care. By eliminating basic customs duty on these essential imported medicines, the government expects cost savings to be passed directly to patients, addressing one of the largest financial burdens associated with life-threatening illnesses.
The Cancer Drug Relief: 17 Medicines Duty-Free
The Announcement
Presenting the Union Budget in the Lok Sabha, Finance Minister Sitharaman stated: “To provide relief to patients, particularly those suffering from cancer, I propose to exempt basic customs duty on 17 drugs or medicines”.
This exemption removes the basic customs duty that imported oncology medicines currently attract, which contributes significantly to their final retail price. By eliminating this levy, the government anticipates that pharmaceutical companies and importers will pass the cost savings on to patients, making life-saving cancer therapies more affordable and accessible.
Why Cancer Drugs Are So Expensive in India
India has long grappled with the prohibitively high cost of cancer treatment, with imported medicines forming a major component of therapy for several cancer types. Several factors contribute to this burden:
Import Dependency:
Many advanced cancer drugs—particularly newer targeted therapies, immunotherapies, and biologics—are not manufactured domestically and must be imported, attracting customs duties, GST, and markups at each distribution level.
Patent Protection:
Newer cancer medicines under patent protection cannot be manufactured as generics in India, forcing patients to purchase expensive branded imports.
Limited Insurance Coverage:
Most cancer patients in India lack comprehensive insurance coverage, meaning they bear the full cost of treatment out-of-pocket. According to health experts, even marginal reductions in drug prices can translate into substantial savings for families undergoing prolonged treatment cycles that may span months or years.
Expected Impact on Cancer Patients
The customs duty exemption on 17 cancer-related drugs is being seen as a step toward mitigating catastrophic out-of-pocket expenditure for patients, particularly those without insurance.
Potential Savings:
While the government has not publicly disclosed the full list of 17 drugs covered under the exemption, officials clarified that they include widely used and high-cost cancer medicines across multiple cancer types. The basic customs duty rate varies but typically ranges from 10-15% on pharmaceutical imports, meaning the exemption could reduce drug prices by a similar margin if the savings are fully passed through to consumers.
Real-World Example:
For a cancer drug costing Rs 1 lakh after import, elimination of 10% basic customs duty could reduce the price to Rs 90,000—a Rs 10,000 saving per treatment cycle. For patients undergoing multiple cycles over months, these savings accumulate significantly.
Historical Context: Building on Budget 2025
Budget 2026’s cancer drug exemption builds on measures announced in the previous year’s budget.
Budget 2025 Cancer Drug Exemptions:
The Union Budget 2025-26 had already exempted 36 life-saving drugs and medicines from basic customs duty, adding them to an existing list of 114 medicines enjoying zero percent customs duty on imports.
These 36 drugs included 12 medicines to treat various types of cancer, including:
- Asciminib: For chronic myeloid leukemia
- Pegylated liposomal irinotecan: For pancreatic cancer
- Daratumumab: For multiple myeloma
- Teclistamab: For relapsed/refractory multiple myeloma
- Amivantamab: For non-small cell lung cancer
- Alectinib: For ALK-positive lung cancer
- Entrectinib: For NTRK fusion-positive cancers
- Tepotinib: For MET exon 14 skipping mutation NSCLC
- Obinutuzumab: For chronic lymphocytic leukemia and follicular lymphoma
- Polatuzumab vedotin: For diffuse large B-cell lymphoma
- Atezolizumab: For various cancers including lung, breast, and bladder
- Avelumab: For Merkel cell carcinoma and renal cell carcinoma
Budget 2026’s addition of 17 more cancer drugs expands this relief further, potentially covering a broader range of cancer types and newer therapies that have come to market since the previous budget.
Seven More Rare Diseases: Expanded Duty Relief
The Announcement
In addition to cancer drug relief, Finance Minister Sitharaman announced: “I propose also to add 7 more rare diseases for the purposes of exempting import duties on personal imports of drugs, medicines and food for special medical purposes used in their treatment”.
This expansion addresses a critical need for patients suffering from rare diseases, who often rely on highly specialized, personalized, or niche therapies that are not manufactured domestically.
What Are Food for Special Medical Purposes (FSMP)?
The duty exemption covers not just drugs and medicines, but also Food for Special Medical Purposes (FSMP). These are specialized nutritional formulations designed for patients with specific medical conditions who cannot meet their nutritional needs through regular food alone.
For rare disease patients—particularly children with metabolic disorders—FSMP products are essential for survival and normal development but are typically expensive imports.
Personal Import Basis: Named Patient Programs
The exemption applies to personal imports of these medicines, which are often brought into the country on a “named patient basis”. This means:
- The medicine is prescribed for a specific patient by name
- It is imported directly for that individual’s treatment
- It may not be commercially available in India
- The patient or their family handles the import process
Named patient imports are common in rare disease treatment because:
- The patient population is too small to justify commercial registration and distribution in India
- The diseases are so rare that Indian pharmaceutical companies don’t manufacture treatments
- Patients need access to cutting-edge therapies approved abroad but not yet in India
Which Rare Diseases?
While the government has not publicly disclosed the specific seven rare diseases added to the duty-free list in Budget 2026, we can reference the approach taken in Budget 2025 for context.
Budget 2025 Rare Disease Exemptions Included:
- Spinal Muscular Atrophy (SMA): Gene therapy (onasemnogene abeparvovec/Zolgensma) and risdiplam (Evrysdi) were exempted
- Type 1 Gaucher disease: Miglustat
- Pompe disease: Miglustat
- Primary hyperlipidemia: Alirocumab
- High LDL cholesterol: Inclisiran
Budget 2026’s addition of seven more rare diseases significantly expands the scope of relief, potentially covering conditions like:
- Rare metabolic disorders
- Genetic neurological conditions
- Ultra-rare immune deficiencies
- Orphan diseases with very small patient populations
The specific diseases will likely be notified through subsequent government circulars once the budget proposals are enacted.
Why This Matters for Rare Disease Patients
Rare disease medicines are among the most expensive pharmaceuticals globally due to:
- Small patient populations: Limited economies of scale
- High R&D costs: Spread across few patients
- Specialized manufacturing: Often requiring unique processes
- Import necessity: Most not produced in India
For families dealing with rare diseases, annual medication costs can run into lakhs or even crores of rupees. Eliminating customs duty—even if it saves 10-15%—can mean the difference between affording treatment and going without.
Broader Healthcare Measures in Budget 2026
The cancer and rare disease duty exemptions were part of a broader healthcare focus in Budget 2026-27, signaling “a decisive shift in policy priorities” with healthcare emerging as a key driver of economic growth.
Emergency and Trauma Care Expansion
Finance Minister Sitharaman announced plans to strengthen emergency and trauma care facilities nationwide, noting that medical emergencies often impose unexpected financial burdens on families, particularly the poor and vulnerable.
Key Initiative:
“We will strengthen and increase these capacities by 50 per cent in district hospitals by establishing emergency and trauma care centres”.
This 50% capacity increase in district-level emergency care aims to:
- Reduce mortality from trauma and acute medical events
- Decrease the need for expensive tertiary care in urban centers
- Provide accessible emergency services in rural and semi-urban areas
Mental Health Infrastructure: NIMHANS-2
Acknowledging a significant geographic gap, Sitharaman announced: “There are no national institutes for mental healthcare in north India. We will therefore set up a NIMHANS-2 and also upgrade National Mental Health Institutes in Ranchi and Tezpur as regional apex institutions”.
NIMHANS-2 Significance:
The National Institute of Mental Health and Neuro-Sciences (NIMHANS) in Bangalore is India’s premier mental health institution. A second NIMHANS in North India will:
- Address the regional imbalance in specialized mental health care
- Serve as a training and research center
- Provide tertiary care for complex psychiatric and neurological conditions
Regional Institute Upgrades:
Upgrading existing institutes in Ranchi and Tezpur as regional apex institutions will create a network of excellence across India’s geography.
Ayurveda and AYUSH Expansion
The budget also emphasized traditional medicine with the announcement of three new All India Institute of Ayurveda institutions to meet rising global demand for Ayurvedic healthcare.
Rationale:
Highlighting post-pandemic global acceptance of Ayurveda, Sitharaman noted that exports of high-quality Ayurvedic products could boost farmer incomes through increased cultivation of medicinal herbs.
Quality Infrastructure:
The budget proposed upgrades to:
- AYUSH pharmacies
- Drug testing laboratories
- WHO Global Traditional Medicine Centre in Jamnagar
These improvements aim to enhance quality standards and availability of skilled personnel in traditional medicine.
Budget 2025 Healthcare Baseline
The healthcare initiatives in Budget 2026 build on substantial allocations made in the previous year:
Budget 2025 Health Allocations:
- Total health sector: Rs 99,858.56 crore (10% increase from previous year’s Rs 90,958.63 crore)
- Medical college seats: 75,000 additional seats over five years, including 10,000 in FY26
- Day-care cancer centres: 200 centres in district hospitals
- R&D initiative: Rs 20,000 crore for private-sector-led research, development and innovation
Customs Duty Rationalization: Personal Use Imports
Beyond healthcare-specific relief, Budget 2026 also announced a broader customs duty rationalization that will benefit all personal imports.
General Personal Import Relief:
“To rationalize the customs duty structure for goods imported for personal use, the government has reduced the tariff rate on all dutiable goods imported for personal use from 20 per cent to 10 per cent”.
This 50% reduction in personal import tariffs:
- Makes international shopping and gifts more affordable
- Reduces incentives for under-declaration and smuggling
- Simplifies customs processing for travelers and recipients
- Aligns India’s personal import duties more closely with global norms
For patients importing medicines under named patient programs, this general reduction complements the specific duty exemptions on cancer and rare disease drugs.
Implementation and Next Steps
Timeline for Relief
The customs duty exemptions announced in the Budget typically take effect from April 1, coinciding with the start of the new financial year. However, for urgent patient needs, the government may issue interim notifications allowing earlier implementation.
Which Drugs Specifically?
The government has not yet publicly disclosed the complete list of 17 cancer drugs or the 7 rare diseases covered under the new exemptions. These details will likely be notified through:
- Finance Ministry circulars
- Central Board of Indirect Taxes and Customs (CBIC) notifications
- Updates to the Customs Tariff Schedule
Patients, advocacy groups, and pharmaceutical importers will be watching closely for these official notifications to understand which specific medicines qualify.
Patient Advocacy and Industry Response
Patient advocacy organizations have long campaigned for duty relief on life-saving medicines, arguing that taxes on essential health treatments impose an unfair burden on the critically ill.
The Budget 2026 announcements represent a significant victory for these advocacy efforts, though patient groups will continue monitoring to ensure:
- Savings are actually passed to patients, not retained by importers
- The list of covered drugs expands as new therapies emerge
- Implementation is smooth and accessible to patients in practice
Balancing Affordability and Self-Reliance
The customs duty exemptions on imported cancer and rare disease drugs create a tension with India’s broader “Atmanirbhar Bharat” (self-reliant India) policy, which generally seeks to encourage domestic manufacturing through protective tariffs.
The Pragmatic Approach
By targeting duty relief specifically at medicines not manufactured domestically—particularly advanced cancer drugs and ultra-rare disease treatments—the government has struck a balance:
- Immediate patient needs: Duty-free imports provide urgent relief where no domestic alternative exists
- Domestic industry protection: Medicines manufactured in India continue to receive tariff protection
- Long-term capacity building: Parallel investments in domestic biopharma R&D aim to reduce future import dependency
Finance Minister Sitharaman framed the measure as aligning “with the government’s broader focus on healthcare affordability, alongside initiatives to strengthen domestic pharmaceutical manufacturing and rationalise customs duties where imports remain unavoidable”.
Conclusion: Tangible Relief for the Most Vulnerable
Budget 2026’s exemption of basic customs duty on 17 cancer drugs and expansion of rare disease import duty relief to seven additional conditions marks a compassionate, patient-centric policy intervention at a time when healthcare costs continue to rise.
For thousands of families grappling with cancer diagnoses and rare disease challenges, the announcement offers the promise of tangible, if partial, financial relief. While duty elimination alone cannot solve the broader crisis of healthcare affordability in India—where comprehensive insurance remains limited and out-of-pocket expenditure dominates—reducing the cost of essential imported medicines represents a meaningful step toward making life-saving therapies accessible to more patients.
As the specific drugs and diseases covered under these exemptions are formally notified in coming weeks, patients, doctors, and advocacy organizations will be watching to ensure the savings materialize in practice and that the government continues expanding this list as new therapies and needs emerge. For now, Budget 2026’s healthcare measures signal that patient welfare remains a policy priority even amid competing demands for revenue mobilization and fiscal consolidation.