Budget 2026: No Custom Duty On Cancer Drugs, Import Exemptions for Rare Diseases - What Gets Cheaper?

Union Finance Minister Nirmala Sitharaman announced customs duty relief for cancer drugs on Sunday, February 1. Specifying the custom exemption on 17 essential cancer treatment drugs and medicines, this decision by the government aimed at reducing the cost of purchasing drugs.

In addition to Cancer drugs, the government also proposed to exempt customs duty on seven more rare diseases, which would give more financial support to patients suffering from such diseases. 

Also Read | Union Budget 2026: New Income Tax Act to Be Implemented from April 1, 2026.

"To provide relief to patients particularly those suffering from cancer, i proposed to exemption customs duty on 17 drugs or medicines," said FM Sitharaman during her 9th budget speech at the Parliament on Sunday.

दिल्ली: केंद्रीय वित्त मंत्री निर्मला सीतारमण ने कहा, "...पर्सनल इस्तेमाल के लिए इम्पोर्ट किए गए सामान पर कस्टम ड्यूटी स्ट्रक्चर को तर्कसंगत बनाने के लिए, मैं पर्सनल इस्तेमाल के लिए इम्पोर्ट किए जाने वाले सभी ड्यूटी वाले सामान पर टैरिफ दर को 20% से घटाकर 10% करने का प्रस्ताव करती… pic.twitter.com/nkK0rz3jeR

— IANS Hindi (@IANSKhabar) February 1, 2026

"I also to add 7 more rare dieseases for the purposes of exeptiom on import duties on personal impots of drugs, mediciens and food for special medical purposes use for their treatment," said.

The Union Budget further proposes to revise provisions governing baggage clearance during international travel to address genuine concerns of passengers. The revised rules will enhance duty-free allowances and provide clarity in temporary carriage of goods brought in or taken out. Furthermore, the honest taxpayers will now be able to settle their dues and close cases by paying an additional amount in lieu of penalty, the Budget added.

What Gets Cheaper?

1. Cancer Treatment: FM Nirmala Sitharaman announced to reduce rates of drug and medicine use for the treatment of Cancer disease by exemption of basic customs duty on 17 essential cancer drugs.

2. Rare Disease Treatment: Though the Finance Minister has not taken names of these rare diseases, but said drugs, medicines and food use to treat such diseases are expected to become cheaper.

3. Foreign Tour Packages: Going on holiday will become cheaper as the government plans to reduce the TCS rate on the sale of overseas tour packages from the current 5% and 20% to 2% without any stipulation of amount.  

"I propose to reduce the TCS rate for pursuing education and medical purposes under the liberalised remittance scheme from 5% to 2%," Sitharaman said.

4. Microwave Ovens: Making cakes and pastries now costs less as the prices on kitchen appliance Microwave Ovens will be lower. The government exempts basic customs duty on specified parts used in the manufacture of the key kitchen appliance.

5. Leather Goods: Products made up of leather material are also expected to get cheaper. The government will allow duty-free imports of certain specified inputs for promoting the country's leather industry.

The Budget proposes  to  enhance  duty  deferral  period  for Tier 2 and Tier 3 Authorised Economic Operators, known as AEOs, from 15 days to 30 days. The Budget further proposes to provide eligible manufacturer-importers the same duty deferral facility, thereby encouraging them to get themselves accredited as a full-fledged Tier 3- AEO in due course.

The Union Budget also proposes to extend validity period of advance ruling, binding on Customs, from the present 3 years to 5 years. Government agencies will be encouraged to leverage AEO accreditation for preferential treatment in clearing their cargo, the Budget stated. Regular importers with trusted longstanding supply chains will be recognized in the risk system, so that the need for verification of their cargo every time can be minimized. Export cargo using electronic sealing will be provided through clearance from the factory premises to the ship, the Budget stated. For import of goods not needing any compliance, filing of bill of entry by a trusted importer, and arrival of goods will automatically notify Customs for completing their clearance formalities.

FM Nirmala Sitharaman further announced that the Customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit. These reforms will move away from the current system of officer-dependent approvals, and reduce transaction delays and compliance costs, she added.