Budget 2026 expectations: The healthcare industry believes that Budget 2026 will indicate how the sector is positioned within India's growth priorities amid large patient volumes, uneven capacity, and high dependence on imported medical equipment.

Sudarshan Jain, Secretary General of Indian Pharmaceutical Alliance noted that with pharma sector facing global challenges such as Donald Trump's tariffs, supply chain disruptions, and geopolitical uncertainty, there is increased need for strategic support to maintain and strengthen India's competitive edge.

Dr Mukesh Batra, Founder-Chairman Emeritus of Dr Batra's Healthcare, stressed on the importance of judicious use of allocated funds, adding, "As we look ahead to Budget 2026-27, there is a significant opportunity to build on sector momentum by re-orienting healthcare delivery towards prevention, early intervention, and personalized care."

Here are the key demands from Budget 2025

Expansion of medical infrastructure

Dr Sabine Kapasi, CEO at Enira Consulting pointed to expansion of hospitals and medical colleges in Tier 1 and Tier 2 cities as a priority, because these regions already carry a significant share of patient load. Besides this, workforce expansion projects must include faculty, nurses, and allied health professionals to ensure quality outcomes, she added.

Dr Ramesh Kancharla, Founding Chairman of Rainbow Children's Medicare added that there is need for increased focus on child health. He noted that while share of child-welfare in the Budget has risen to 2.29%, its share of GDP has slipped to 0.33%. "For a country with such a vast paediatric population, this is simply inadequate. India must set a long-term goal of raising child-focused expenditure towards 5% of GDP with a significant proportion of that investment channelled directly into child healthcare," he said.

But Dr Batra is optimistic that Economic Survey 2025 "sets a positive backdrop", while the NHP reaffirms the government's "commitment to strengthening healthcare capacity through the expansion of medical colleges, AIIMS, and flagship initiatives such as PM-ABHIM".

Domestic Manufacturing

Dr Kapasi also feels that domestic manufacturing deserves sharper focus. Here, "a redesigned PLI that supports R&D-led medical technology manufacturing can improve affordability, strengthen supply security, and build export capacity," she said.

Satish Reddy, Chairman of Dr Reddy's Laboratories concurred, noting that it is critical that the pharma industry also undertakes a strategic shift from volume-led expansion to value-driven growth, closer alignment between science, policy and industry.

Dev Tripathy, Head of Finance at Philips Indian Subcontinent added that artificial intelligence can help bridge the supply-demand gap. "There is a need for sustainable ecosystem for MedTech manufacturing. New PLI schemes should encourage holistic development ensuring comprehensive growth across the industry," he added.

Access to healthcare

Dr Batra called for strengthened insurance coverage and wellness provisions to include long-term preventive care. He also feels that accelerated investments in digital health infrastructure and community-based clinics can bridge access gaps in Tier-2, Tier-3, and semi-urban regions.

Dr Kancharia noted the need to expand DNB seats in paediatrics and paediatric super-specialities to ensure that every child, regardless of location, has access to skilled and timely care. "Allowing tax deductions for essential diagnostics and annual health check-ups up to ₹10,000 per child will ease the financial burden and help embed a culture of early intervention," he added.

"Rationalized duty structures are essential to make healthcare more affordable and accessible for all," added Tripathy.

Healthcare expenses: For patients and companies

Dr Batra also suggests reducing out-of-pocket expenses and ensuring sustainable, inclusive healthcare growth for India through targeted tax incentives, employer-led wellness programs, and robust public-private partnerships.

According to Jain, pharma companies are seeking coverage for patents registered in India and abroad, a competitive tax rate of 5%, in line with global best practice, and support for competitive manufacturing by widening inverted duty structure, incentives for Make in India, backward integration, and foreign direct investment (FDI) in pharma manufacturing.

Himanshu Baid, MD of Poly Medicure added that for India to be truly competitive, the sector needs a policy approach that reduces cost disabilities, nurtures local innovation and enables faster market access and the Budget offers an opportunity to help close these critical gaps.

"The inverted duty structure where many finished devices are taxed at 5% while most inputs and input services attract 18%, will lead to large Input Tax Credit accumulations and increased working-capital pressures for manufacturers. Addressing this imbalance is essential," he added.

Further, Baid feels that aligning the job-work GST rate for medical devices with the concessional 5% applied in the pharmaceutical sector and revising the refund formula to include ITC on input services and capital goods, would offer immediate relief and bring greater parity across the healthcare manufacturing ecosystem.

R&D support

According to Reddy, creation of a structured funding framework to deepen innovation and R&D across the country "will enable pharma companies to translate advanced research into complex, high-value therapies while improving patient access".

"Building a supportive ecosystem that ensures sustained financing for pharmaceutical innovation. Reforms in regulation, particularly to encourage greater participation from start-ups, would be a significant step forward in strengthening India's life sciences innovation landscape," he added.