Proposal seeks higher GST on reserve antibiotics to tackle antimicrobial resistance

A proposal calling for a restructuring of the Goods and Services Tax (GST) on antibiotics has been submitted to Union Finance Minister Nirmala Sitharaman ahead of the Union Budget 2026–27.

In a letter dated January 13, Ranga Reddy Burri, president of the Infection Control Academy of India (IFCAI), based in Hyderabad, described antimicrobial resistance as a ‘perpetual pandemic’ that is already undermining routine medical care across the country. “Rising resistance among common pathogens is leading to prolonged hospitalisation, higher treatment costs and declining clinical outcomes, with implications for surgeries, cancer care, intensive care and even childbirth,” he said.

Mr. Burri played a key role in Telangana’s adoption of the Action Plan to combat antimicrobial resistance, with the State becoming the seventh in the country to roll out the policy in October 2024.

The letter notes that while India has a strong strategic framework through the National Action Plan on Antimicrobial Resistance 2.0, implementation at the State level remains uneven. Only a limited number of States and Union Territories have operationalised State Action Plans, largely due to the absence of predictable and dedicated financing mechanisms. “The existing market incentives often encourage misuse, with high-end antibiotics frequently cheaper than basic diagnostic tests, making empirical escalation economically attractive despite clinical risks,” the letter added.

To correct this imbalance, the proposal suggests a progressive GST structure based on the World Health Organisation’s (WHO) Access, Watch and Reserve classification (AWaRe) framework. Under this model, Access antibiotics, which are first and second line treatments for common infections, would continue to attract a low GST rate of around 5% to ensure affordability. Watch antibiotics, which carry a higher resistance potential, would be taxed at 12%, while Reserve antibiotics, meant strictly for confirmed multidrug-resistant infections, would attract a GST rate of 24% or higher.