Industry Leaders Demand Structured Funding Framework Ahead of Union Budget 2026
As India prepares for the Union Budget 2026, prominent voices from the pharmaceutical and medical technology sectors are advocating for a comprehensive funding structure to accelerate innovation and research and development activities. Industry executives emphasize that such measures are crucial for realizing the nation's ambitious Viksit Bharat vision and transforming the healthcare landscape.
Strategic Transition from Volume to Value
Dr Reddy's Laboratories Ltd Chairman Satish Reddy highlighted that India's pharmaceutical industry is undergoing a significant strategic shift from volume-led expansion to value-driven growth. He stressed that closer collaboration between scientific research, policy formulation, and industrial implementation is essential to foster innovation across the entire value chain.
"With the sector positioned to play a pivotal role in achieving the Viksit Bharat vision and its target of becoming a $500 billion industry by 2047, expectations from the Union Budget 2026 focus on establishing a structured funding framework to deepen innovation and R&D nationwide," Reddy stated, as reported by news agency PTI.
MedTech Sector Calls for Policy Support and Funding
Poly Medicure Ltd Managing Director Himanshu Baid echoed similar sentiments, emphasizing that India requires a policy approach that reduces cost disadvantages, nurtures local innovation, and facilitates faster market access to build a competitive MedTech ecosystem. Baid proposed the creation of a dedicated Rs 1,000-crore MedTech R&D and clinical validation fund to support indigenous product development and enhance global competitiveness.
Baid also raised concerns about the inverted duty structure affecting the sector, where many finished medical devices attract 5 percent GST while their inputs are taxed at 18 percent, creating working-capital pressures for manufacturers.
Customs Duty Rationalization and Simplified Governance
ZEISS India CFO Dhaval Radia emphasized that further rationalization of customs duties and streamlined governance would be key to improving cost competitiveness and enabling long-term investment planning. These measures would help domestic manufacturers compete more effectively in both domestic and international markets.
Focus on AI and Preventive Healthcare
Philips Indian Subcontinent Head of Finance Dev Tripathy suggested that new Production Linked Incentive schemes should support holistic MedTech growth. He emphasized the need for incentives targeting AI-led innovation, job creation, and Global Capability Centres to position India as a significant global player in the healthcare technology sector.
Apollo Hospitals' Shobana Kamineni advocated for a prevention-first healthcare model, describing preventive healthcare as India's next potential global export. Meanwhile, Rainbow Children's Medicare Chairman Ramesh Kancharla sought tax deductions of up to Rs 10,000 per child for essential diagnostics and annual check-ups to promote early intervention and cultivate a healthier future generation.
Building a Competitive Healthcare Ecosystem
The collective recommendations from industry leaders underscore several critical areas for budgetary attention:
- Establishing structured funding mechanisms for pharmaceutical and MedTech innovation
- Addressing inverted duty structures to alleviate working-capital pressures
- Rationalizing customs duties and simplifying governance processes
- Creating incentives for AI-driven healthcare solutions and preventive care models
- Supporting indigenous product development through dedicated R&D funds
As India moves toward its Viksit Bharat goals, the pharmaceutical and MedTech sectors are positioning themselves as crucial contributors to economic growth and healthcare advancement. The Union Budget 2026 presents an opportunity to implement policies that could transform India into a global healthcare innovation hub while improving domestic healthcare outcomes.
