Following Finance Minister Nirmala Sitharaman's (Nirmala Sitharaman) announcement regarding reductions in custom duties in the Union Budget 2025-26, it is anticipated that several items will become more affordable. Imported life-saving medications, along with drugs used in the treatment of cancer, rare, and other serious diseases, are expected to witness a price reduction. Additionally, the cost of imported motorcycles is likely to decrease.
However, certain items like interactive flat panel displays (touch screens) and some woven fabrics, imported as complete units, may become more expensive due to an increase in Basic Custom Duties.
'Exemption on 36 Life-Saving Drugs...'
During her budget speech, Nirmala Sitharaman stated, "To provide relief for patients, particularly those suffering from cancer, rare diseases, and other serious chronic illnesses, I propose adding 36 life-saving drugs to the list of medications fully exempt from Basic Custom Duty (BCD)."
She further stated, "I also propose adding 6 life-saving drugs to the list with a preferential tariff of 5%. Complete exemption and preferential duty will apply to bulk drugs used in their manufacture."
The Finance Minister also announced that medications supplied under patient assistance programs operated by pharmaceutical companies are fully free from Basic Custom Duty, provided they are offered to patients at no cost. She added, "I propose including 37 more drugs with 13 new patient assistance programs."
Other Imported Products Also See Duty Reductions
While the government has reduced duties on several imported items like marble, granite, and footwear, the impact has been lessened due to an increase in the Agriculture Infrastructure and Development Cess (AIDC). Similarly, motorcycles with engine capacities of 1,600 cc or more, imported as completely built units (CBUs), will become cheaper as the tariff has been reduced from 50% to 30%.
In the budget, it was announced that the duty on synthetic flavoring essences and mixtures used in the food and beverage industries would be reduced from 100% to 20%. Similarly, jewelry, silverware, and carrier-grade Ethernet switches will also become more affordable.
Certain imported woven fabrics are likely to become more expensive as the custom duty structure on them was changed to 20% or 115 rupees per kilogram.
