The finance ministry is unlikely to accede to the demand for zero duty on all life saving drugs, as recommended by the ministry of chemicals and fertilisers and industry bodies.
Finance ministry officials told Business Standard the issue would continue to be examined on a case-by-case basis in the absence of any comprehensive life saving drugs list.
The revenue department has identified 126 drugs that are given customs duty exemption.
On 88 of these drugs, however, it imposed a 5 per cent customs duty in 2002-03 arguing these drugs were also being produced locally.
The 2003-04 Budget had exempted 'life saving drugs', attracting 0 or 5 per cent customs duty, from excise duty also.
In cases where domestic manufacturers have to pay an excise duty, countervailing duties are imposed on imported drugs in order to make Indian industry more competitive.
Other than the revenue departments list, there is the essential drug list of the health ministry, to guide government procurement, and this takes into account the country's public health concerns.
However, this list is also not acceptable as a proxy, as industry sources argue about 25 per cent of medicines on the list are irrelevant today.
The issue of what a life saving drug is extremely contextual, and it would not be feasible to draw up a separate list, finance ministry officials said.
The present system of reviewing drugs once a year for inclusion in the duty exempt list would therefore continue, they added.