Budget 2026: Industry pushes for higher allocations, improved tax structure, better incentives & friendly policies

New Delhi: As the Union Budget 2026 approaches, industry stakeholders across life sciences, healthcare, diagnostics, medical technology and bio-based manufacturing are calling for a decisive shift, from incremental support to mission-driven execution.

Leaders from the life sciences ecosystem believe the Budget 2026 must move beyond India’s traditional strengths in manufacturing and generics to position the country as a global innovation hub.

Healthcare Industry Leaders share their expectations from the Budget 2026:

Ameera Shah, President, NATHEALTH and Executive Chairperson, Metropolis Healthcare Ltd, opined that for India to realise its Viksit Bharat 2047 vision, healthcare must be recognised as a strategic pillar of nation-building. She emphasised that fiscal foresight and innovation-led reforms are essential to building a self-reliant, high-quality healthcare ecosystem that expands access and supports long-term growth, adding that placing healthcare investment at the centre of economic planning will help ensure inclusive and future-ready progress.

Dr. Sangita Reddy, Senior Vice President, NATHEALTH & Joint Managing Director, Apollo Hospitals, added, “This Budget can be a launchpad to reimagine India’s healthcare future at exponential scale. It is time to shift from incremental spending to bold, long-horizon investments in infrastructure, talent, and frontier innovation. India’s healthcare providers have already proven their capability and courage; now we need a powerful fiscal and policy architecture that accelerates capacity-building, unlocks next-gen technologies, and ignites deep public–private collaboration. If we get this right, India won’t just strengthen healthcare, we will build one of the world’s most resilient, future-ready health systems.”

Dr. Simon Thomas, Senior Director – Robotic Joint Replacements & Orthopaedics, Max Super Speciality Hospital, Shalimar Bagh said, The government should aim to prioritize decisive investments in advanced ortho technologies such as robotic joint replacements, AI-powered automation and workflow like predictive imaging, and specialist training, thereby reducing recovery times and expenses incurred on hospitals while embedding Max Healthcare’s promise of frontline, accessible care via ‘Heal in India.”

Shobana Kamineni, Promoter Director of Apollo Hospitals Enterprise Ltd. and Executive Chairperson of Apollo Healthco said, “A Viksit Bharat will be built on a healthy youth and workforce—nearly one billion strong by 2047. A prevention-first healthcare system, powered by mandatory check-ups, digitised records, and UPI-style data portability, can unlock early risk detection, personalised care, and long-term productivity at scale. As India led the world in digital payments, preventive healthcare can be our next global export.”

Dr. M.I. Sahadulla, National President, AHPI, and Chairman & Managing Director, KIMSHEALTH opined, “India’s healthcare spending continues to lag behind that of many developing economies. To build a healthier population and establish India as a global healthcare innovation hub, combined public healthcare expenditure by the Centre and States must be increased to at least 5% of GDP. This should be supported by targeted tax incentives to drive investments into Tier 2 and Tier 3 cities, where access to quality healthcare remains limited. Stronger budgetary support is essential for oncology care, early detection programmes, and preventive health initiatives. The Government should also prioritise incentives for digital health adoption, including EMR systems, AI-driven solutions, and cybersecurity infrastructure. Expanding Public-Private Partnerships, particularly in preventive healthcare such as cancer screening and geriatric care, can significantly accelerate national health outcomes.”

Dr Krishna Prasad Vunnam, Founder & Managing Director, Ankura hospital for women and children said, “The focus on healthcare must move beyond infrastructure expansion to strengthening outcomes for mothers and children. Last year’s increased allocation for health and medical education was a welcome step, but the need now is sharper investment in maternal, neonatal, and paediatric care at the last mile. Greater budgetary emphasis on early antenatal screening, nutrition programmes, high-risk pregnancy management, and neonatal intensive care will directly impact survival and long-term well-being. Equally critical is support for skilled workforce development, digital health systems, and referral networks that ensure timely intervention, especially in tier 2 and tier 3 cities. A budget that prioritises preventive care, quality standards, and continuity of care, from pregnancy to early childhood, will not only reduce avoidable complications but also build a healthier next generation. Strengthening these foundations is essential for a resilient and inclusive healthcare system.”

Dr Arun Singhvi, MD & Group CEO, ASG Eye Hospital mentioned, “It will be very beneficial if the government could significantly lower the cost of technology adoption by doing away with the residual 7.5%–10% Basic Customs Duty and the 5% Health Cess on high-precision, non-indigenous technologies. Equipment such as Femtosecond lasers and advanced retinal imaging systems are critical for sight-saving procedures but remain expensive to import. A weighted tax deduction on AI-related capital expenditure and a reduction in duties for diagnostic machines with embedded AI software will go a long way in enabling the healthcare ecosystem. This would incentivize hospitals to deploy automated screening tools in remote areas, significantly reducing the burden of avoidable blindness through technology.”

Sudipta Sengupta, Founder & CEO, The Healthy Indian Project (THIP) opined: “As India prepares its annual budget, my key expectation is clarity and courage in supporting preventive healthcare startups. Global AI platforms like ChatGPT Health will inevitably reshape consumer health information, but without policy support, they risk overwhelming homegrown players who understand India’s realities far better. Preventive health is not just a business opportunity; it is a national necessity. I hope the government creates incentives, grants, and regulatory safeguards that empower Indian startups to innovate responsibly, compete fairly, and build trusted health ecosystems rooted in evidence, ethics, and accessibility.”

Healthcare infrastructure and NCD management are another priority area. Dr G.S.K. Velu, Chairman and Managing Director of Trivitron Healthcare, Maxivision Eye Hospitals and Neuberg Diagnostics, said India is at a crossroads where execution must take centre stage to manage the country’s rising non-communicable disease burden, which accounts for nearly 65% of mortality. He reiterated the long-standing demand to raise public health expenditure beyond 2.5% of GDP and called for targeted fiscal support for primary and secondary infrastructure in Tier 2 and Tier 3 cities. Incentives for diagnostic hubs and comprehensive eye hospitals in underserved regions, through priority sector lending and enhanced viability gap funding, along with AI-driven diagnostics and genomic triage, could help shift healthcare from a reactive to a proactive, preventive model.

Diagnostics companies, meanwhile, are seeking structural reforms to strengthen domestic manufacturing and affordability. Dr Anand K., Managing Director and CEO of Agilus Diagnostics, pointed to the inverted duty regime that often makes importing finished diagnostic products cheaper than sourcing raw materials locally. He said more balanced tax structures, backed by consistent R&D incentives, could reduce import dependence and make diagnostics more affordable, while regulatory clarity around AI-enabled tools will be essential to maintain quality and trust. According to him, a patient-centric, forward-looking Budget can position diagnostics as a strategic pillar of preventive and outcome-driven care.

Budget expectations from the MedTech Industry Leaders:

Koji-Wada, Managing Director, FUJIFILM India, said that as India looks ahead to Budget 2026–27, sustained policy continuity and long-term visibility will be critical for companies building long-term capabilities in the country. He noted that continued emphasis on high-quality manufacturing, technology-led innovation and skills development can deepen India’s industrial base while supporting stable and inclusive growth.

Wada added that healthcare and medical technology are becoming central to India’s development agenda, and investments in diagnostics, medical imaging and devices can improve efficiency, enable early detection and deliver better patient outcomes. He called for strengthening collaboration between industry, academia and healthcare institutions.

Pavan Choudary, Chairman, Medical Technology Association of India (MTaI), said, “India is responding to a shifting global environment through well-negotiated FTAs that move beyond tariffs to enable deeper technology transfer and research collaboration in healthcare. For patients to benefit, public health financing must advance alongside it. The ₹5-lakh Ayushman Bharat–PM-JAY cover for senior citizens has already widened access to hospital care. Expanding insurance to include more effective procedures will strengthen patient outcomes and encourage responsible medical innovation.”

Sanjay Bhutani, Managing Director, Bausch & Lomb & Director, MTaI stated, “A larger and clearly protected allocation within the health budget should be directed towards strengthening primary care and diagnostic capacity, particularly in Tier 2, Tier 3 and rural geographies. Investment in preventive services, point-of-care diagnostics and integrated referral systems delivers high economic returns by reducing avoidable hospitalisation and long-term care costs.”

Dev Tripathy, Head of Finance, Philips Indian Subcontinent, commented, “Delivering quality healthcare to the last mile is crucial for India, and this can only be achieved by leveraging AI. AI enables early diagnosis and consolidates data points, helping clinicians make accurate decisions and bridge the supply-demand gap. India has the talent to drive AI-led innovation, and incentives for AI innovation, job creation, and high-end service exports through Global Capability Centres (GCCs) must be prioritized. This will foster innovation and position India as a competitive global player. To establish India as a medical device export hub, we need a sustainable ecosystem for MedTech manufacturing. New PLI schemes should encourage holistic development, ensuring comprehensive growth across the industry. Finally, with ongoing geopolitical instability and currency pressures, rationalized duty structures are essential to make healthcare more affordable and accessible for all.”

Dipu Bose, Head, Medical Technology, ZEISS India & Neighboring Markets, said, “We are optimistic that the upcoming Union Budget will introduce transformative reforms to address critical gaps in India’s healthcare access and infrastructure. The focus should be on reducing tax burdens, expanding incentives for innovation, and significantly increasing public health spending to build a more inclusive and robust healthcare system that benefits every citizen, regardless of income or location. Expanding Production Linked Incentive (PLI 2.0) schemes for medical devices is vital to fostering innovation and reducing import reliance. Complementing this with phased manufacturing programs (PMP) and globally-aligned incentives for biosimilars, novel therapies, and research and development (R&D) will strengthen India’s healthcare ecosystem and bolster global competitiveness.”

K. Anindith Reddy, Managing Director, Wadi Surgicals Private Limited, said: “As Union Budget 2026 approaches, India’s nitrile gloves sector, which primarily relies on imports, needs regulatory control of substandard imports and manufacturing incentives. The government should swiftly impose anti-dumping duties on imports from Malaysia and Thailand, alongside the implementation of the Quality Control Order (QCO) by the Department of Pharmaceuticals, making BIS mandatory. We seek concessions on repo rates and extension of moratorium for those companies that started in Covid under the Atmanirbhar Bharat scheme to help us support expansions. We further recommend customs duty rationalisation and reversal of inverted duty structures, capital subsidies for machinery upgrades and R&D grants for newer technology and product developments.”

The Budget is also being seen as a key inflection point for India’s transition from reactive healthcare to preventive and predictive wellness. Dr Sajeev Nair, Founder and Chairman of Vieroots, said stronger policy and fiscal support is needed for AI-driven health platforms, digital diagnostics and personalised wellness solutions leveraging genomics, biomarkers and real-time health data. According to him, incentives for health-tech startups working at the intersection of AI, data science and preventive care can significantly reduce long-term healthcare costs through early risk detection. He added that integrating wearables, remote monitoring and digital therapeutics into insurance frameworks and public–private partnerships will be critical for large-scale adoption, alongside investments in data infrastructure and ethical AI frameworks.

Budget 2026 expectations from Biotech Industry Leaders

Shreehas Tambe, CEO & Managing Director, Biocon Biologics called the budget a srategic opportunity to accelerate this transition and strengthen India’s position in the global pharmaceutical value chain. “The Government’s announcement of the Rs 1 lakh crore Research, Development and Innovation (RDI) Fund is a significant and welcome step. To fully realise its potential for the pharmaceutical sector, this initiative must be supported by enabling fiscal and regulatory measures that improve investment viability, reduce input costs, and incentivise high-risk research,” said Tambe.

The industry leader further elaborated on his budget expectations, “The Union Budget 2026 is an opportunity for the government to prioritize certain key interventions. It must restore weighted tax deductions for pharmaceutical R&D to stimulate sustained investment in novel drugs, biologics, biosimilars, peptides, complex generics, and platform technologies. It should provide targeted customs duty relief on critical APIs, intermediates, reagents, analytical instrumentation, and process equipment to enhance cost competitiveness and supply chain resilience. It must rationalise inverted GST structures impacting APIs, formulations, and clinical research services to improve cash flows and pricing efficiency. The budget could introduce focused incentives for advanced pharmaceutical manufacturing, including biosimilars, peptides, biologics, cell and gene therapies, continuous manufacturing, and green chemistry–based production. These measures will catalyze private investment, accelerate the translation of research into commercial therapies, and support the development of globally competitive pharmaceutical manufacturing capabilities in India.

Ashok Nair, MD, RPG Life Sciences welcomed continued government support for innovation, competitiveness, and sustainability and further called for incentives and weighted tax deductions for R&D investments in complex generics, injectables, and biosimilars.

Nair added: “We advocate for an expansion of Production-Linked Incentives to cover critical intermediates and biosimilars, alongside strategic encouragement of domestic API manufacturing to reduce import reliance and strengthen supply chains. Furthermore, a strong emphasis on digital health, pharmacovigilance, and digital-first quality systems can be transformative for the sector’s future readiness. Sustainability commitments such as energy efficiency, solvent recovery, and green chemistry are increasingly becoming standard priorities across the industry. Companies are also strengthening global regulatory compliance for USFDA and EU markets, while near-shoring supply chains and localizing API production to mitigate systemic risks. As we look ahead, the Indian pharmaceutical industry is poised to lead not just in scale, but in complexity, quality, and innovation. With the right policy interventions in the upcoming Union Budget, the sector can accelerate its journey toward global leadership in healthcare.”

Siddharth Daga, Managing Director, VINS Bioproducts Limited said, “With India’s Union Budget on the horizon, it’s time to wield fiscal tools for lasting public health resilience and economic multipliers. Champion public health experts’ push for progressive GST on antibiotics: slash rates on essential first-line drugs while hiking them for sparingly used, higher-generation ones. This decisive step curbs antimicrobial resistance and safeguards future treatment pipelines. Following NATHEALTH’s lead, introduce tax deductions for routine preventive screenings. These incentives drive early intervention, slashing long-term curative costs and boosting workforce productivity. Define healthcare as core infrastructure to unlock lower-cost financing and infrastructure funds for hospitals, diagnostics expansion, and domestic manufacturing under Atmanirbhar Bharat. Most critically, commit to public health spending of at least 2.5% of GDP. This fortifies pandemic preparedness, bridges access gaps, and delivers affordable, quality care nationwide—propelling India’s health sovereignty and sustainable growth.”

The pharmaceutical manufacturing sector is also looking for continuity and scale in existing schemes. Bhavin Mehta, Whole Time Director at Kilitch Drugs and Vice Chairperson, Pharmexcil, said the industry expects deeper policy continuity around PLI-led manufacturing, API self-reliance and export competitiveness. While PLI and PRIP have laid a strong foundation, he said the next phase must focus on execution, cost competitiveness and scale. Key asks include rationalisation of import tariffs on critical raw materials, enhanced R&D tax incentives, faster depreciation for quality and compliance investments, and easier access to export credit, to help the sector move towards its $120–130 billion ambition by 2030 and reinforce India’s position as the Pharmacy of the World.

Venkat Nelabhotla, Co-Founder, President and CEO of Vyome Holdings, Inc., urged the government to place life sciences and biotech at the heart of the bioeconomy. He proposed a dedicated Life Sciences & Biotech Innovation Mission with an allocation of over Rs 50,000 crore focused on R&D incentives, translational research, clinical development and global regulatory readiness, backed by measurable targets around new molecular entities, biologics, vaccines, cell and gene therapies, IP creation and global approvals. Nelabhotla also pitched the idea of a Life Sciences Sovereign Innovation Zone, a globally competitive special economic region for novel pharma, biotech companies, CROs, CDMOs and deep-tech healthcare startups, supported by streamlined tax structures, global capital access and talent-friendly visa policies to attract overseas experts and bring back Indian professionals.

Surajit Chakrabartty, CFO, MedGenome Labs Ltd said, “We appreciate the government recognizing the role of genomics in enhancing healthcare outcomes, which is reflected through initiatives such as government-led, large-scale genome sequencing projects and targeted initiatives in therapy areas like sickle cell anemia, tuberculosis, etc. This budget should aim to build on past initiatives and increase support for improving awareness, affordability and accessibility. Government’s support for research projects and on-ground initiatives in collaboration with Indian companies should also be encouraged. Budgetary support for investments in research, infrastructure, and public–private partnerships will strengthen India’s healthcare ecosystem, give an advantage to Indian Companies to compete with their international peers, and boost the economy.”

In advanced therapies, cell and gene therapy (CGT) players are looking for policy measures that improve affordability without diluting innovation. Amit Mookim, Board Director and CEO of Immuneel Therapeutics, said Union Budget 2026–27 can play a defining role by rationalising GST on manufacturing materials and offering targeted import duty relief on critical raw materials to lower production costs. He also highlighted the need for insurance frameworks that recognise the long-term value of potentially curative, one-time treatments such as CAR-T therapies. Innovative financing models, including outcome-based and annuity-style payments, along with incentives for global technology partnerships and predictable, internationally aligned regulatory pathways, would be key to expanding patient access while ensuring quality and safety.

Dr. Seema Pai, President, Indian Society for Clinical Research, said that as India moves closer to the Union Budget 2026, there is a strong opportunity to strengthen the country’s clinical research ecosystem through higher investment in academic research, infrastructure and skill development. She noted that greater support for AI-enabled clinical trial data collection and analysis, digital health tools, and deeper collaboration between academia and industry can accelerate evidence-based healthcare and help the life sciences sector progress towards its $120–130 billion target by 2030 and $450 billion by 2047.

Leading industry stakeholders shared their views:

Beyond healthcare, bio-based manufacturing and sustainable chemicals are emerging as new Budget priorities. Dr Sangeeta Srivastava, Executive Director of Godavari Biorefineries, said that after achieving E20 blending ahead of schedule, India now faces a productive ethanol surplus that requires urgent demand-side policy innovation. She said Budget 2026 should incentivise E100-ready infrastructure and accelerate mandates for Sustainable Aviation Fuel to absorb excess capacity, while supporting a strategic shift towards ethanol-to-chemicals and high-value bio-based derivatives. According to her, the right fiscal framework can help India transition from fuel blending to global leadership in the sustainable chemicals economy.

Mohan Jain, Director – Naprod Life Sciences stated, “The pharmaceutical sector looks forward to policy measures that strengthen India’s position as a global hub for high-quality, specialty medicines. Continued focus on advanced manufacturing—particularly in complex therapy areas like oncology, injectables, and critical care—will be pivotal for sustaining India’s trust capital across regulated and emerging markets.From an industry standpoint, the biggest lever is to make compliance-led manufacturing easier to scale—through sharper support for technology upgradation, quality infrastructure, and R&D.”

“A meaningful step would be to strengthen innovation incentives, including a more competitive R&D tax framework, while also expanding manufacturing-linked support to critical inputs such as APIs to improve supply-chain resilience. Equally important is improving export competitiveness by easing structural friction points—faster trade facilitation and a GST/ITC framework that reduces working-capital lock-ups for export-oriented manufacturers. Better access to affordable credit and continued momentum on export credit support can further enable responsible capacity expansion without diluting quality benchmarks,” Jain added further.

Bhavin Bhagat, Chief Financial Officer, CORONA Remedies Limited called the budget 2026–27 a critical opportunity to reinstate and strengthen R&D-linked incentives, including enhanced weighted deductions, which can meaningfully accelerate innovation-led growth for Indian companies. “Additionally, as advanced technologies such as artificial intelligence become integral to drug development, manufacturing efficiency, and quality outcomes, targeted policy support and fiscal incentives for AI adoption will be essential. Enabling access to these technologies will empower Indian pharmaceutical companies to fully leverage the country’s technological capabilities and compete at the global forefront of science-driven healthcare.”

Padmaja Ruparel, Co-founder, IAN Group said, “The recent government thrust on deeptech and the abrogation of the angel tax have had a catalytic effect on the Indian startup ecosystem. It has enabled investments in far riskier startups with patient capital. Budget 2026 is a great opportunity to further consolidate this momentum by strengthening the policy framework that promotes innovation, patient capital, and long-term value creation. Apart from funding, high-quality talent is the need for startups to build globally competitive innovation and businesses. Hence for startups, which are not cash rich to attract such talent, ESOPs are critical.”

“Another area that is equally important is providing clarity on exits, secondary markets, and AIF structures, especially in the context of early-stage investors and angel funds that form the building blocks of new businesses. As India grows its deeptech ecosystem, there is also a need to revisit the definition of a ‘startup’ that does not account for innovation cycles that are longer in duration. A forward-looking Budget that provides clarity and promotes risk-taking will help India transition from a startup nation to a value creation nation,” added Ruparel.

Mytri Macherla, Vice President & Sector Head, Corporate Ratings, ICRA LIMITED  stated, “The upcoming budget is likely to focus on preventive healthcare given the significant rise in non-communicable and lifestyle diseases in the country. To boost investments in the sector, tax incentives for private sector investments in modernising medical facilities, especially in tier-2 and tier-3 cities and developing greenfield hospitals in rural areas will be a welcome step. Further, given the low doctors to people and nurses to people ratio, increased allocation towards training medical personnel would be highly beneficial. The pharma sector seeks rationalisation of GST rates on key raw materials to address the inverted duty structure, restoration of tax incentives on R&D spend, and expansion of PLI schemes to strengthen API self-reliance. Increased public healthcare spending and targeted incentives for biopharma innovation are critical to sustain growth.”