As the Union Budget 2026–27 approaches, India’s healthcare sector is closely watching for policies that can strengthen infrastructure, improve access, and drive innovation. From preventive care and early diagnostics to domestic manufacturing of medical technologies and advanced pharmaceuticals, healthcare leaders are highlighting key areas where government support can create long-term impact.
In the run-up to the budget, industry experts—from hospital CEOs and biotech pioneers to pharmaceutical leaders and preventive health advocates—have shared their insights on the initiatives they hope to see, including increased R&D funding, fiscal incentives, digital health investments, and policies that make healthcare more affordable, equitable, and future-ready. Here’s a roundup of their perspectives ahead of Budget 2026.
As the Union Budget approaches, the healthcare sector will be looking closely at how policy continues to support the growing demand for consistent, high-quality and technology-enabled care. A balanced approach that reinforces healthcare infrastructure, technology adoption and supply-side resilience will be critical to strengthening the overall healthcare ecosystem in the years ahead. One of the critical areas to watch will be policy support for domestic manufacturing of advanced medical equipment. Today, a significant share of cutting-edge technology used in hospitals, from imaging systems to surgical platforms, continues to be imported from Western markets and China, even as clinical demand for these technologies is growing rapidly.
If similar equipment were manufactured at scale in India, costs could eventually be materially lower, much like what the automotive sector has demonstrated with domestic production of high-end vehicles. Beyond cost, local manufacturing would also strengthen supply reliability, enhance service support, and enable long-term technology adoption across hospitals.
Further policy incentives to accelerate domestic manufacturing would help build a more resilient medical technology ecosystem, while enabling wider and more affordable access to high-quality care over time.
The Economic Survey 2025 sets a positive backdrop for Budget 2026-27, underlining strong economic fundamentals and sustained public spending priorities. For 2025-26, the Ministry of Health was allocated close to ₹1 lakh crore, reflecting a 10–11% increase and reaffirming the government’s commitment to strengthening healthcare capacity through the expansion of medical colleges, AIIMS, and flagship initiatives such as PM-ABHIM. These efforts are aligned with the National Health Policy’s long-term goal of raising public health expenditure to 2.5% of GDP.
As we look ahead to Budget 2026-27, there is a significant opportunity to build on this momentum by re-orienting healthcare delivery towards prevention, early intervention, and personalized care. Equally important, however, is the judicious utilization of allocated funds and a clear assessment of their on-ground impact on beneficiaries—effective implementation must go hand-in-hand with budgetary planning.
The rising burden of lifestyle and chronic diseases makes a compelling case for greater integration of preventive and alternative systems of medicine, including AYUSH, supported by strong research, evidence generation, and transparent regulatory frameworks. Focused investment in research and development, particularly in homeopathy and other AYUSH disciplines, will enhance credibility, foster wider acceptance among medical professionals, and increase public trust.
We also expect the forthcoming Budget to strengthen insurance coverage and wellness provisions to include long-term preventive care, while accelerating investments in digital health infrastructure and community-based clinics. Such measures can bridge access gaps in Tier-2, Tier-3, and semi-urban regions. Keeping affordability at the core—through targeted tax incentives, employer-led wellness programs, and robust public-private partnerships—will be critical to reducing out-of-pocket expenses and ensuring sustainable, inclusive healthcare growth for India.
Last year’s Union Budget signalled important progress toward improving patient access, particularly through duty exemptions on life-saving medicines and an increased on medical education. This progress is also reflected in the steady rise in public healthcare spending, with the share of government health expenditure in total health spending increasing over the recent years.
As we look ahead to the Union Budget 2026, we hope that this momentum is sustained by strengthening policy and funding support for pharmaceutical R&D and innovation. With diseases on the rise, budgetary support for screening, diagnostics, and healthcare infrastructure will be critical to enable early diagnosis and long-term disease management. Measures that improve affordability such as rationalisation of duties and sustained public health investment can help ensure the translation of scientific progress into better patient outcomes. We look forward to the government building on these steps to further strengthen India’s healthcare ecosystem in the years ahead.
India stands at a pivotal moment as it evolves from being a global supplier of affordable generics to a leading hub for pharmaceutical innovation and advanced manufacturing. The Union Budget 2026 offers a strategic opportunity to accelerate this transition and strengthen India’s position in the global pharmaceutical value chain.
The Government’s announcement of the ₹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. The Union Budget 2026 is an opportunity for the government to prioritize certain key interventions:
1. Restore weighted tax deductions for pharmaceutical R&D to stimulate sustained investment in novel drugs, biologics, biosimilars, peptides, complex generics, and platform technologies;
2. Provide targeted customs duty relief on critical APIs, intermediates, reagents, analytical instrumentation, and process equipment to enhance cost competitiveness and supply chain resilience;
3. Rationalise inverted GST structures impacting APIs, formulations, and clinical research services to improve cash flows and pricing efficiency;
4. 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.”
As India looks ahead to Union Budget 2026, one critical gap in healthcare planning continues to go unaddressed: oral health still does not feature as a dedicated priority within the national budget. This oversight is particularly concerning at a time when the government has rightly emphasised cancer care in 2025 as a key focus area.
Oral cancer is the most common cancer among Indian men and contributes to a disproportionately high share of the country’s overall cancer burden. India accounts for nearly one-third of global oral cancer cases, with outcomes severely affected by late diagnosis and limited access to early screening, especially in rural and underserved regions. Yet oral healthcare remains folded into the broader healthcare and oncology budgets, without targeted investment in prevention or early detection.
While overall healthcare spending continues to remain close to 2% of the total budget below the 2.5% target set by the National Health Policy, how this allocation is prioritised is just as important as the quantum itself. Budget 2026 presents an opportunity to recognise oral health as a standalone public health category, with focused funding for screening, awareness, and primary-level intervention. Strengthening oral healthcare is not an add-on to cancer policy; it is essential to making cancer care more effective, equitable, and sustainable.
As India builds its ambition to become a global hub for next-generation biotherapies, Union Budget 2026–27 can play a defining role in improving access, affordability and innovation in cell and gene therapy. Broader rationalisation of GST on manufacturing materials and targeted import duty relief on critical raw materials will be key to lowering production costs and expanding patient access. Equally important is the creation of insurance frameworks that recognise the long-term value of potentially curative, one-time treatments such as CAR-T cell therapy. The introduction of innovative financing mechanisms, including outcome-based and annuity-style payment models, can help align affordability with sustainability for patients. Incentivising global technology partnerships will further accelerate knowledge transfer, co-development, and localisation of globally benchmarked therapies in India to ensure quality, safety and timely adoption without compromising patient outcomes, we also expect a clear, predictable regulatory pathway aligned with international standards.
India’s health system has made significant progress in prevention, diagnostics, and treatment. Fertility care now needs to be formally integrated into this framework as part of comprehensive family health planning.
Budget 2026 has an opportunity to enable earlier and more efficient fertility care through practical measures. Integrating fertility screening into preventive health programmes and extending insurance coverage to diagnostics and early stage interventions would allow people to seek care sooner, when treatment is more effective and costs are better controlled.
Access must be matched with quality. National standards for fertility laboratories, structured training for embryologists, and consistent clinical protocols are essential to delivering safe and reliable outcomes across the country.
These are targeted investments with long term returns. Strong fertility care infrastructure supports family formation, demographic stability, and a more resilient healthcare system, making it a logical inclusion in India’s health and economic planning.
2025 has been a year of steady progress and purposeful engagement for India’s medical devices sector. We commend the Government of India for its continued focus on strengthening the MedTech ecosystem through sustained policy dialogue and the growing recognition of medical devices as a strategic pillar of healthcare delivery and economic resilience. This year witnessed deeper engagement on the Medical Devices Policy 2023, alongside constructive discussions on regulatory predictability, domestic manufacturing capacity, and the urgent need to reduce import dependence in critical device segments.
For Indian manufacturers, particularly MSMEs, 2025 has laid the groundwork for a more balanced and enabling operating environment—one that prioritises quality, affordability, and trust while encouraging innovation and global competitiveness. At AiMeD, our efforts have remained centred on advocating a level playing field, ethical procurement practices, and policy frameworks that support sustainable growth across the value chain.
As we step into 2026, the focus must shift decisively towards consistent policy execution and deeper industry–government collaboration. Key steps include raising tariffs to 10–15% from the current 7.5% to support domestic manufacturing, adopting quality‑based criteria in public procurement with preference for ICMED certification over foreign approvals, updating labelling norms to disclose domestic content percentages, and incentivising suppliers with over 50% local value addition. These reforms, coupled with measures to enhance global competitiveness, can help India translate its capability, capacity, and credibility into lasting outcomes—positioning our nation as a leading global MedTech hub.
The Indian pharmaceutical sector is at the cusp of a new era. As our portfolios shift towards complex generics and biosimilars, margin profiles will improve, boosting India’s position as a global hub for affordable pharmaceuticals.
Today global companies are seeking more CDMOs in search of efficiency, with AI-assisted discovery and documentation, even as key markets like US are focusing on robust compliance and regulation. Indian pharma exports growth in the near future is likely to come from a mix of US and fast-growing emerging markets.
To support export growth and regulatory excellence, targeted government support to rationalize logistics costs, and faster approvals are essential. Expedited CDSCO approval timelines and a single-window mechanism for clinical trials, exports related clearances, and plant clearances will accelerate market access domestically and internationally.
RPG Life Sciences welcomes continued government support for innovation, competitiveness, and sustainability. Incentives and weighted tax deductions for R&D investments in complex generics, injectables, and biosimilars will be key to develop cutting-edge therapies.
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.
As we approach the Union Budget 2026–27, India stands at a crossroad where execution must take centre stage to manage our nation's soaring Non-Communicable Disease (NCD) burden, which accounts for a mortality rate of ~65%. We urge the government to fulfil the long-standing industry recommendation of raising public health expenditure to over 2.5% of GDP to build a truly resilient and future-ready ecosystem.
Although the radical GST reform in 2025 that reduced taxes on diagnostic kits and medical devices to a mere 5% charge was a historic achievement for health equity, it is now imperative for the coming budget to correct the inverted duty structure, which has been pressurising domestic manufacturers. There is scope to review and harmonise certain GST rates, like Radiation Protection Apparels being charged at 18% - the same should be brought under 5% GST rate for consistency. I strongly recommend aligning the GST bracket to eliminate the inverted duty structure. Such alignment would reduce operational inefficiencies, streamline compliance, and ensure that the cost savings are passed on to consumers.
We must now ensure self-sufficiency and reduce our massive import dependency of 80% on imported devices by adopting 'Buy India' initiatives or boosts in research incentives like the PRIP scheme, to migrate from volume in manufacturing to depth in R&D. At the same time, reduced import duties and GST on essential ophthalmic equipment, will give a boost to preventive eye health, supported by intensive screening programmes and public-private partnerships.
The budget should provide targeted fiscal support for primary and secondary infrastructure in Tier 2 and 3 cities. In order to make affordable healthcare care accessible across Tier 2, Tier 3, and rural India, the budget should incentivise setting up of diagnostic hubs and comprehensive eye hospitals in these underserved regions through priority sector lending and enhanced Gap Viability Funding.
By integrating AI-driven diagnostics and IoT-enabled monitoring, we can transform eyecare from a reactive model to a proactive one, identifying vision impairments decades earlier. By incentivizing the integration of 'Actionable AI' and genomic triage into routine diagnostics, the government can help us transition from a reactive service model to a proactive, preventive healthcare system.
Only by combining high-end technology with local manufacturing and strategic infrastructure spending can we ensure that world-class quality healthcare reaches the most remote corners of the country.