Budget 2026: Tax removed on 17 cancer drugs, brings relief to patients

At least 17 cancer drugs will become cheaper after the government, in the Union Budget 2026-27, removed basic customs duty tax on these medicines, offering direct cost relief to patients dependent on imported therapies.

“To provide relief to patients, particularly those suffering from cancer, I propose to exempt basic customs duty on 17 drugs or medicines,” Finance Minister Nirmala Sitharaman said while presenting the Union Budget 2026-27 in Parliament on February 1.

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The exemption applies to a set of high-cost cancer medicines commonly used in advanced and complex stages of the disease, including targeted therapies and biologic drugs that form a large part of a patient’s monthly treatment bill. Many of these medicines are imported and have limited domestic manufacturing alternatives.

Most of the cancer drugs covered under the exemption are manufactured by large multinational pharmaceutical companies based in the United States and Europe, including Roche, Novartis, Bristol Myers Squibb, Merck & Co and Johnson & Johnson. These medicines include targeted therapies, immunotherapies and cell- or gene-based treatments used in late-stage and difficult-to-treat cancers.

In India, such medicines are imported either directly by multinational subsidiaries or through authorised distributors and supplied to tertiary hospitals and specialised cancer centres. While Indian drugmakers are global leaders in generics and biosimilars, domestic production of complex oncology biologics and cell therapies remains limited due to high development costs, regulatory complexity and long development timelines.

Treatment costs remain steep. Industry and hospital estimates show that advanced cancer medicines can cost between ₹2 lakh and ₹10 lakh per month, depending on the therapy and indication, while some cell and gene therapies can cost several tens of lakhs of rupees for a single course. For many families, medicines form the single largest component of total cancer treatment expenses.

Basic customs duty tax on imported medicines, which can be as high as 10 per cent, adds directly to the price paid by hospitals and patients. By removing this tax, the government, in the Union Budget 2026–27, has ensured that these 17 cancer drugs will now cost less than before, providing immediate and direct financial relief to patients and families managing long-term treatment.

Cancer care in India continues to be largely financed through out-of-pocket spending. According to the Indian Council of Medical Research, India records more than 14 lakh new cancer cases every year, and high drug costs remain a major reason why treatment is delayed, interrupted or discontinued. Projections suggest cancer incidence could rise to nearly 20 lakh cases annually by 2040, increasing demand for advanced therapies.

The Budget also widened customs duty relief for patients with rare diseases. “I also propose to add seven 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,” Sitharaman said.

Rare diseases are typically chronic, genetic or life-threatening conditions that affect a small number of people but often require lifelong treatment. Many patients depend on imported medicines or specialised nutritional products due to the absence of domestic manufacturing.

The seven additional rare diseases covered under the expanded exemption include Congenital Hyperinsulinemic Hypoglycemia, Familial Homozygous Hypercholesterolemia, Alpha Mannosidosis, Primary Hyperoxaluria, Cystinosis, Hereditary Angioedema and Primary Immune Deficiency Disorders, as notified by the government.

Government estimates suggest that more than 7 crore people in India live with one of the recognised rare diseases, with families frequently bearing the full cost of treatment due to limited insurance coverage and high import dependence.

The Union Budget 2026–27 builds on earlier measures taken by the government to ease access to life-saving medicines. In previous Budgets, including 2023–24, customs duty exemptions were extended to select cancer drugs, medical devices and treatments for rare diseases. The latest move expands the scope of that relief by covering a wider set of oncology medicines and additional rare disease conditions.

Industry leaders said the measure addresses both patient affordability and long-term healthcare priorities. “Recognising the rising burden of non-communicable diseases, particularly cancer, the Budget provides direct relief for patients by removing basic customs duty on 17 cancer drugs and extending duty exemptions to additional rare diseases,” said Satish Reddy, Chairman, Dr. Reddy’s Laboratories.

From a clinical perspective, Dr. Mandeep Singh Malhotra, Director – Surgical Oncology at CK Birla Hospital, Delhi, said, “High treatment costs often limit access to specialised therapies for patients with advanced and rare cancers. Removing the customs duty tax will help ease financial stress during prolonged treatment journeys and support better clinical outcomes.”

Highlighting the scale of the challenge, Dr. Ashish Joshi, Director, Co-founder and Medical Oncologist at M|O|C Cancer Care and Research Centre, said, “With India reporting over 14 lakh new cancer cases every year and incidence projected to rise further, lowering financial barriers to essential treatment is critical, particularly for patients dependent on imported therapies.”