Budget 2025: Industry welcomes customs duty exemptions on 36 life-saving drugs and medicines
Policy

Budget 2025: Industry welcomes customs duty exemptions on 36 life-saving drugs and medicines

The Union Budget 2025-26 strengthens India's healthcare sector with an allocation of Rs. 99,858.56 crore, marking a 9.78% rise from Rs. 90,958.63 crore in 2024-25

  • By IPP Bureau | February 01, 2025

The Union Budget 2025-26 strengthens India's healthcare sector with an allocation of Rs. 99,858.56 crore, marking a 9.78% rise from Rs. 90,958.63 crore in 2024-25.  The Budget comes as a big relief to patients, particularly to those suffering from cancer, rare diseases and other severe chronic diseases.

The Budget proposes to add 36 life-saving drugs and medicines to the list of medicines fully exempted from Basic Customs Duty. The Budget also proposes to add 6 life-saving medicines to the list attracting concessional customs duty of 5%. Full exemption and concessional duty will also respectively apply on the bulk drugs for manufacture of the above.

Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies are fully exempt from Basic Customs Duty, provided the medicines are supplied free of cost to patients. The Budget proposes to add 37 more medicines along with 13 new patient assistance programmes to the list.

The Budget 2025 has given a strong push to healthcare by expanding cancer center, strengthening medical education, offering customs duty exemptions, and prioritizing the development of General Clinical Centers.

With a strong focus on expanding healthcare access, infrastructure, and research, this budget reinforces the government's commitment to building a healthier and more resilient India.

IPP collates industry leader's opinion on Union Budget 2025-26:

Satish Reddy, Chairman, Dr. Reddy’s Laboratories

“Union Budget 2025-26 takes strong steps towards nation-building through structural reforms such as investment in technology and infrastructure, simplification of tax slabs and duties, and announcements in critical areas such as tax relief for the salaried class, inclusive growth, climate action, agriculture, among others. It has also provided for resilience in the healthcare infrastructure of the country through cancer day centres, medical education, further custom duty exemptions for life-saving drugs, and encouragement to medical tourism and ‘Heal in India’. The continued focus on the investment in private sector-driven research, development and innovation announced last year is welcome, as are measures for digital education, fostering scientific curiosity and innovation among youth, and Centres of Excellence for skilling to support ‘Make for India, Make for the World’ manufacturing. We look forward to studying the detailed proposals.”

Dr Krishna Prasad, Chigurupati, CMD, Granules India

“Exempting 36 life-saving pharmaceuticals from basic customs duty and adding six essential medicines under a concessional 5 per cent duty will significantly enhance access to critical therapies. Extending full exemption and concessional tariffs to bulk drugs used in their manufacturing will further improve affordability and availability.

The expansion of medical education with 10,000 additional seats and the establishment of 200 daycare cancer centers in FY 2025-26 will strengthen healthcare infrastructure, enabling early diagnosis and treatment. Additionally, the establishment of five National Centers of Excellence for Skilling, along with global skilling collaborations, will equip India’s workforce with the expertise needed to drive pharmaceutical innovation and manufacturing.

These strategic initiatives reinforce India’s commitment to providing accessible and cost-effective healthcare solutions.”

Arjun Juneja, COO, Mankind Pharma

“The Union Budget 2025-26 lays a solid foundation for India’s pharma sector and enhances healthcare accessibility. The exemption of Basic Customs Duty on 36 life-saving drugs makes critical treatments, especially for oncology and rare diseases, more affordable, aligning with the government’s vision of a self-reliant India. The establishment of Day Care Cancer Centres and expansion of Patient Assistance Programs (PAPs) will further improve patient access to essential treatments.

The budget’s focus on 5 per cent concessional duties on essential medicines and bulk drug exemptions will optimise production costs, boost domestic manufacturing, and drive innovation. The commitment to adding 75,000 medical college seats and the creation of a Centre of Excellence in AI further strengthens the healthcare ecosystem.

The ‘Heal in India’ initiative, combined with streamlined medical tourism policies, positions India as a global healthcare hub, driving demand for high-quality, affordable medicines. These reforms are a significant step toward making India a global leader in pharmaceuticals, and we at Mankind Pharma are excited to support and contribute to this transformation.”

Sanjiv Navangul, MD & CEO, Bharat Serums and Vaccines 

The Union Budget 2025 reinforces India's commitment to innovation, healthcare accessibility, and women’s empowerment. Strengthening R&D and fostering industry collaboration will accelerate biotech and pharmaceutical advancements, making India a global hub for healthcare innovation. However, the wait for the PRIP schemes is getting longer than expected. The focus on nutrition and maternal health through targeted programs is a crucial step in building a healthier future. Additionally, improving access to lifesaving drugs and streamlining regulatory pathways will enhance affordability and availability of critical treatments. A strong push towards policy and infrastructure support will further drive healthcare transformation, ensuring equitable and sustainable impact.

Nikhil Chopra, CEO & Whole Time Director, JB Pharma

“This year’s budget sets a clear direction for India’s pharmaceutical and healthcare sectors, with a strong focus on manufacturing, innovation, and building infrastructure for the future. I believe this is a transformative moment. The government's push for Make in India—combined with expanded customs duty exemptions on lifesaving medicines—is poised to lower costs and increase access to essential treatments. The creation of comprehensive cancer care centres nationwide, along with enhanced healthcare infrastructure, will ensure more equitable access to early and advanced treatments across India.

The recommendation to allow up to 100% FDI in insurance can be a complementary to the focus on enhancing access to cancer care. With the relaxation of guardrails for foreign investment, the insurance sector can now support new healthcare models that align with the government's vision of building a self-reliant, globally competitive healthcare industry.

Equally important is the focus on domestic manufacturing and technological advancements. The National Manufacturing Mission is set to strengthen India’s production capabilities, while the Centres of Excellence for skilling aim to cultivate a future-ready workforce. Moreover the investments in AI-driven education have the potential to accelerate healthcare innovation. A crucial aspect of this budget is the focus on simplifying the customs tariff structure and addressing duty inversion. Streamlining cargo clearance processes will hopefully help ease the supply chain challenges that the pharmaceutical industry has faced for years.

The budget’s emphasis on health in India, with enhanced private sector partnerships and streamlined medical travel, positions India as a premier destination for high-quality, affordable treatments. This will not only benefit our domestic patients but also attract international medical tourism, showcasing our healthcare sector’s growth potential.

Lastly, I applaud the budget’s continued focus on building rural prosperity and middle-class consumption, which is progressively laying the groundwork for inclusive growth and medium to long-term national growth.”

Saransh Chaudhary, President, Global Critical Care, Venus Remedies and CEO, Venus Medicine Research Centre

“The Union Budget 2025 has brought several positive developments for the pharma industry, including full exemption from basic customs duty on 36 lifesaving drugs and concessional duty of 5 per cent on 6 more. The government’s decision to fully exempt specified drugs under Patient Assistance Programmes (PAPs) and add 37 new medicines along with 13 additional PAPs will significantly improve access to critical medicines and reduce treatment costs for patients in need.

The announcement to set up Day Care Cancer Centres in all district hospitals over the next three years—starting with 200 in 2025-26—is a commendable step in strengthening cancer care infrastructure. This initiative will provide patients with first-hand assistance from healthcare professionals while easing the burden on tertiary hospitals and ensuring timely treatment closer to home.

While these are welcome steps, we had hoped for a stronger push towards pharma R&D. Increasing allocation beyond the current 1 per cent of GDP, raising the weighted tax deduction for R&D expenditure from 100% to 200%, and swiftly rolling out the Research Linked Incentive scheme remain critical to fostering drug innovation. We urge the government to consider these priorities to further bolster research in India’s pharma industry and healthcare ecosystem.”

Dr. Azad Moopen, Founder & Chairman, Aster DM Healthcare 

“The Union Budget 2025 strengthens India’s commitment to a more resilient and inclusive healthcare system, ensuring accessibility, affordability, and quality care for all. The addition of 75,000 new medical seats will address the long-standing healthcare workforce shortage. This effort will help close access gaps in underserved areas, ensuring both the availability and quality of care are improved. The establishment of 200 cancer daycare centres in district hospitals represents a proactive move towards decentralising cancer treatment, making care more accessible. These centres will not only enhance accessibility but also improve outcomes by enabling timely interventions while customs duty exemptions on cancer drugs and 36 life-saving medicines will make critical treatments more affordable. 

Further, the decision to exempt 36 life-saving medicines from basic customs duties, along with reduced duties on six additional medicines, is a decisive action aimed at removing financial barriers to essential treatments. This initiative is particularly beneficial for patients suffering from chronic and rare diseases, reinforcing the government’s commitment to making healthcare more affordable for the most vulnerable. 

The e-Shram healthcare insurance for gig workers and increased investment in medical research and genetic studies demonstrate a forward-thinking approach to public health. Additionally, easing visa norms for medical tourism under the ‘Heal in India’ initiative strengthens India's position as a global healthcare destination, benefiting both patients and the economy. 

These initiatives mark a significant step toward building a future-ready healthcare system that prioritizes both immediate needs and long-term advancements.” 

Shaunak Amin, Managing Director, Alembic Pharmaceuticals

“The government’s commitment to strengthening pharmaceutical production, particularly for critical drugs like those for cancer and rare diseases, is a decisive step toward a healthier India and reinforces the country’s position as the ‘Pharmacy of the World.’ The duty exemptions on 36 life-saving medicines and bulk drugs, along with concessions on six more essential medicines, will further bolster the industry and enhance collaboration between healthcare providers, policymakers, and manufacturers.

Additionally, the government has allocated Rs. 98,311 crore for developing, maintaining and improving the country’s healthcare system, the announcement of 200 new daycare cancer centers in FY2025-26, as part of a broader initiative to establish such facilities in every district hospital over the next three years, will significantly improve access to specialized oncology care. This will ensure timely treatment and the availability of high-quality medicines, bringing much-needed cancer care closer to patients.”

Beyond access to medicines, the government’s strong push for medical tourism under the ‘Heal in India’ initiative will further position India as a global healthcare hub. With enhanced medical infrastructure, more international patients will be drawn to India for high-quality, cost-effective treatments. This presents a significant opportunity for the pharmaceutical sector to support hospitals and healthcare providers with world-class drugs and innovations tailored to diverse patient needs.

Moreover, the establishment of National Centres of Excellence for skill development is a pivotal step toward building a future-ready pharmaceutical and healthcare sector. A highly skilled workforce is the backbone of innovation, and investing in talent across research, drug development, and advanced manufacturing will further strengthen India’s leadership in the global pharmaceutical industry.”

Shweta Rai, MD, India and Country Division Head for South Asia, Bayer’s Pharmaceuticals

“The government has laid a strong emphasis on healthcare with multiple measures from increasing medical insurance coverage at the individual level to promoting Global Capability Centers in tier 2 cities.

We applaud the exemption of 36 life-saving drugs from Basic Customs Duty (BCD) and the addition of six more medicines under concessional duty will provide significant relief to patients, particularly those suffering from cancer, rare diseases, and other chronic conditions. The expansion of Patient Assistance Programs, with new medicines and additional programs, will ensure that more patients can access vital treatments.

The government’s focus on increasing PG and UG in medical colleges will improve the patient to HCP ratio and thereby the access and quality of care. These efforts are highly appreciated and we look forward to continued collaboration with the government to enhance healthcare access for all.”

Swapnil Shah, Managing Director, Senores Pharmaceuticals

"The exemption of basic customs duty on 36 life-saving drugs and the reduction of duties on six others is a significant step toward making critical treatments more accessible and affordable for patients battling cancer, rare diseases, and chronic conditions. Additionally, the extension of full exemption and concessional duty on bulk drugs used in manufacturing these medicines will further strengthen the healthcare ecosystem. Full exemption for patient assistance programs ensures free therapies reach those in need. With 37 new medicines and 13 additional programs, this initiative reflects the government’s commitment to making healthcare more equitable and accessible for all."

Malavika Kaura Saxena, CMO, Rusan Pharma 

“The scale-up of cancer care centres in Budget 2025 is a transformative step toward improving accessibility and easing the burden on overstretched healthcare infrastructure. We urge policymakers to ensure these centres integrate pain management and palliative care, which are critical to holistic cancer treatment. The tax exemptions for life-saving drugs and rare disease therapies is a move in the right direction, as they will enhance affordability and availability for patients. These measures align with Rusan's mission to prioritize patient-centric, accessible healthcare solutions. Rusan Pharma remains committed to supporting initiatives that bridge gaps and foster equitable health outcomes.”

Prof Dr Raj Nagarkar, MD & Chief of Surgical Oncology & Robotic Services, HCG Manavata Cancer Centre

“The reduction in drug prices for chronic diseases, including cancer and efforts to bring down the cost of medical equipment are positive steps toward making healthcare more accessible. However, the proposal to increase medical seats to 10,000 per year and 75,000 over five years, raises concerns. Expanding medical education must be accompanied by adequate infrastructure, trained faculty and a strong focus on maintaining the quality of education. Simply increasing numbers without addressing these factors could dilute the training and preparedness of future doctors.

Additionally, the challenges faced by hospitals under Government health schemes remain unaddressed. While initiatives like Ayushman Bharat are widely promoted, many private hospitals have been waiting months for pending payments, making it increasingly difficult to sustain services. In States like Chhattisgarh and Maharashtra, delays in reimbursements for schemes such as CGHS, ECHS, ESIC and MJPJAY put immense financial strain on private healthcare providers, which form the backbone of these programs.

Rather than focusing solely on expansion, the priority should be ensuring timely payments under Government schemes and improving healthcare quality. A structured approach to addressing financial bottlenecks and strengthening medical education will create a more sustainable and effective healthcare system.” 

Yatharth Tyagi, Director- Yatharth Group of Hospitals

"The Union Budget 2025-26 is a well-thought and strategic move, laying a transformative foundation for an inclusive and resilient healthcare ecosystem. The establishment of 200 daycare cancer centers with a three-year district hospital rollout plan is a welcome intervention. This initiative, along with customs duty exemption on 36 life-saving drugs and 13 new patient assistance programs, will improve access to specialized treatment and reduce the financial burden of cancer care. The commitment to add 10,000 medical seats, aiming for 75,000 in five years, and the establishment of five National Centers of Excellence for skilling are strategic steps to address critical workforce gaps in healthcare delivery. "

Hari Chereddi, CEO, HRV Global Life Sciences

"I wholeheartedly welcome the government's decision today to exempt Basic Customs Duty (BCD) on 36 life-saving drugs and extend concessional duty benefits to additional critical medicines. This progressive move will significantly improve access to essential treatments for patients battling cancer, rare diseases, and other chronic conditions. 

At HRV Global Life Sciences, we have advocated innovation in the niche and orphan drug segments with the aim of making life-saving medicines accessible & affordable. This policy of ours towards improving global health access, shows that committed pharma innovation will help improve patient outcomes worldwide." 

Siddarth Daga, CEO, VINS Bio 

“The Union Budget 2025-26 marks a progressive step for the healthcare and pharmaceutical sectors, with an allocation of Rs. 99,858.56 crore, an increase of Rs. 2,445 crore from the previous year’s Rs. 90,958.63 crore. This enhanced investment underscores the government’s focus on accessibility, affordability, and strengthening medical infrastructure.   

The customs duty exemptions on 36 lifesaving drugs, concessional duty on six additional medicines, and relief on bulk drugs used in their manufacturing will help reduce costs and improve patient access to critical treatments. The inclusion of 37 more medicines under exemptions and the introduction of 13 new patient assistance programs are also noteworthy efforts to ease healthcare expenses for patients.   

A key highlight is the expansion of medical education, with 75,000 new medical seats planned over five years, including 10,000 additional seats next year. This move will help bridge the doctor-patient gap and strengthen India’s healthcare workforce. The establishment of Day Care Cancer Centres will improve accessibility to cancer treatment, addressing a major healthcare need.   

However, while the budget emphasizes infrastructure and affordability, more dedicated incentives for R&D in pharmaceuticals and biotechnology would have been beneficial. The expansion of research facilities in IITs and the creation of five National Centres of Excellence for skilling are positive steps, but targeted funding for drug discovery and innovation remains an area for further growth.   

Overall, this budget sets the stage for a stronger, more self-reliant healthcare ecosystem, and at VINS Bio, we remain committed to driving innovations that align with these national priorities.” 

Amit Srivastava, Founder and Chief Catalyst of Nutrify Today

“The Union Budget 2025-26, despite its mixed impact on healthcare, heralds a significant opportunity for the nutraceutical sector. The Indian government's unwavering focus on research and innovation, particularly through initiatives like the National Institute of Food Technology and increased R&D incentives, sets a strong foundation for the development of high-value intellectual property (IP) in India. This will upscale the nutraceutical sector, drive exports, and contribute to better healthcare solutions for Indian citizens.

Furthermore, the investment in supply chain efficiencies and transparency will bolster ingredient reliability from India, helping to position the country as a trusted source for the global supplement market. With enhanced traceability and quality assurance, Indian nutraceuticals are poised to make a significant impact in international markets, solidifying the nation’s standing as a responsible nutrition and wellness innovation leader.”

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