Budget 2026 slashes customs duties on 17 cancer drugs, eases baggage rules

The Budget 2026-27 has simplified customs regime by rationalising exemptions, waiving customs duty on 17 cancer drugs, while easing baggaing rules and reducing duty to 10% on goods imported for personal use.

Finance Minister Nirmala Sitharaman on Sunday (February 1, 2026) unveiled a “trust-based” customs regime, which will have a single window system for cargo clearances, lesser verification for regular importers with trusted longstanding supply chains, easier duty payment norms for Authorised Economic Operators (AEOs) and use of AI in scanning at ports.

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Ms. Sitharaman also announced that honest taxpayers can settle customs disputes by payment of an additional amount, in lieu of penalty, and promised to roll out a Customs Integrated System (CIS) in two years for all Customs processes.

She also announced that the advance ruling will be binding on customs authorities for five years, up from three years currently.

He further said the Customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit.

Ms. Sitharaman in her Budget speech said that the Customs proposal “aim to further simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct inversion in duty”.

The “reforms will move away from the current system of officer-dependent approvals, and reduce transaction delays and compliance costs”, she said.

The Budget proposed to revise provisions governing baggage clearance during international travel to address genuine concerns of passengers. The revised rules will enhance duty-free allowances in line with the present day travel realities and provide clarity in temporary carriage of goods brought in or taken out.

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Under the Baggage Rules 2016, Indian residents and foreigners residing in India arriving from countries other than Nepal, Bhutan, or Myanmar can bring ₹50,000 worth of duty-free goods.

With regard to import of goods for personal use, the Budget proposes to reduce the tariff rate on all such dutiable goods from 20% to 10%.

The personal use goods would exclude motor vehicles, alcohol and tobacco.