The exemption would apply to certain first-line and second-line antiretroviral drugs (ARV) used to treat adults and children, as well as to certain diagnostic kits and equipment that are used by National AIDS Control Organisation (NACO) to fight the HIV/AIDS under the National AIDS Control Programme (NACP).

The decision is an effort to cut the prices so as to cope up with the ongoing shortage of drugs and test kits to fight HIV/AIDS at home.

Further, it would help in importing raw materials that are used in making ARVs under the NACP at cheaper rates.

At present, Mylan Inc, a firm of US and Aurobindo Pharma of India supply ARV under the NACP.

More than a third of India’s 2.1 million HIV/AIDS patients depend on getting their daily ARV for free from state-run distribution centers, which have been facing shortages. Moreover, the drugs under exemption make up roughly 95 percent of the ARVs used by India's AIDS patients under the NACP.

About National AIDS Control Programme (NACP)
In 1986 Union Government set up National Aids Committee under the aegis of Union Ministry of Health and Family Affairs after the detection of first case of AIDS in India.

Then in 1992, the first phase of the National AIDS Control Programme (NACP) was launched that covered the period 1992-1999 and NACO was constituted to implement the programme.

At present, the fourth phase of NACP is being implemented that aims to reduce new infections by 50% (2007 Baseline of NACP III). NACP-IV will cover the period 2012 -2017.