Competency-based medical education (CBME) is gaining momentum across the globe. The Medical Council of India has described the basic competencies required of an Indian Medical Graduate and designed a competency-based module on attitudes and communication. Widespread adoption of a competency-based approach would mean a paradigm shift in the current approach to medical education. CBME, hence, needs to be reviewed for its usefulness and limitations in the Indian context. This article describes the rationale of CBME and provides an overview of its components, i.e., competency, entrustable professional activity, and milestones. It elaborates how CBME could be implemented in an institute, in the context of basic sciences in general and pharmacology in particular. The promises and perils of CBME that need to be kept in mind to maximize its gains are described.