Anil Matai, Director General, OPPI:
“As India approaches the upcoming Union Budget, OPPI believes that there is an opportunity to further strengthen the country’s healthcare and life sciences ecosystem with a clear patient-first focus. Sustained policy support over the past few years has laid a strong foundation for innovation, regulatory reforms, and improved access. The forthcoming Budget may have the potential to build on this by prioritising higher and more targeted investment in R&D and healthcare space. This will, in turn, foster a robust intellectual property environment, and enable a streamlined pathways for parallel and faster introduction of new medicines in India.
From a fiscal standpoint, rationalisation of GST on medicines and medical products, clarity on input tax credits, greater targeted customs duty relief for critical raw materials and advanced manufacturing inputs would help ease cost pressures and improve affordability. Reintroducing or strengthening R&D-linked tax incentives and support for fiscal support clinical research can further encourage innovation-led growth and global competitiveness.
We also look forward to measures that improve regulatory predictability, encourage clinical research, and support advanced manufacturing, while ensuring that quality and safety remain paramount. As the industry continues with the ethical business practices in alignment with the UCPMP, a trust-based and collaborative approach between government, industry, and healthcare stakeholders will be key to long-term progress. Ultimately, a patient-first Budget focused on innovation, access, and affordability can help deliver better health outcomes and position India as a globally competitive and responsible healthcare leader.
Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance:
“The Indian pharmaceutical sector is a global leader in providing affordable, quality-assured medicines and has been a cornerstone of India’s economic growth. With a strong track record of resilience and innovation over six decades, the industry is poised to achieve its ambitious target of reaching USD 120–130 billion by 2030, and ultimately USD 450 billion by 2047. Recent global challenges, including US tariffs, supply chain disruptions, and geopolitical uncertainty, underscore the need for strategic support to maintain and strengthen India’s competitive edge.
The Union Budget 2026 presents a key opportunity to reinforce India’s leadership in innovation, manufacturing, and global healthcare access.
Key Recommendations:
- Strengthen R&D and Innovation Incentives
The industry seeks globally competitive R&D incentives that align with India’s innovation ambitions, enhance the scientific ecosystem, and support the transition from a volume-driven model to an innovation-led pharmaceutical sector. Key measures include:
- Restoration of Weighted R&D Deduction (up to 200%)
Historically, this incentive helped build India’s scientific capability. Restoring it under the new Income Tax Act would significantly boost investment in novel drugs, complex generics, biosimilars, and vaccines - Broadened and Strengthened Patent Box Regime
Pharma companies are seeking:- Coverage for patents registered in India and abroad
- Inclusion of embedded IP income, licensing revenues, milestone payments, and capital gains
- Eligibility for Indian residents who conduct R&D through global collaborations
- A competitive tax rate of 5%, in line with global best practice
- Support Manufacturing Competitiveness
- Rationalise the GST Structure: Address the widening inverted duty structure, ensuring smooth GST refunds on both goods and services, to maintain manufacturing viability and affordability
- Reintroduce Concessional Tax Regimes for New Facilities: Incentivise Make in India, backward integration, and foreign direct investment (FDI) in pharma manufacturing
- Simplify Compliance and Regulatory Framework
- Clarify Section 194R: Physician samples and low-value brand reminders should not be treated as taxable benefits, eliminating ambiguity and reducing unnecessary compliance burdens
- Increase Public Healthcare Investment
- Increase government healthcare spending towards the National Health Policy 2017 target of 2.5% of GDP by 2026–27 to strengthen the overall healthcare ecosystem
Mytri Macherla, Vice President & Sector Head, Corporate Ratings, ICRA:
“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.”
Bhavin Mehta, Whole Time Director, Kilitch Drugs & Vice Chairperson, Pharmexcil:
“As we approach the Union Budget 2026, the pharmaceutical sector is looking for deeper policy continuity around PLI-led manufacturing, API self-reliance, and export competitiveness. While schemes such as PLI and PRIP have laid a strong foundation, the next phase must focus on scale, execution, and global cost competitiveness.
Rationalisation of import tariffs on critical raw materials, coupled with targeted incentives for value-added formulations and APIs, will be crucial to offset rising input and compliance costs. We also see a strong case for enhanced tax incentives for R&D, faster depreciation benefits for quality and compliance investments, and easier access to export credit for pharma manufacturers.
A Budget that strengthens PLI outcomes, supports green and compliant manufacturing, and aligns trade policy with India’s healthcare diplomacy will help the sector move decisively towards its $120–130 billion ambition by 2030 and reinforce India’s position as the Pharmacy of the World.”
Arpit Bhatia, Director, Laborate Pharmaceuticals:
“As India works towards strengthening its healthcare ecosystem, the upcoming Budget is an opportunity to reinforce the fundamentals of pharmaceutical manufacturing. Greater focus on quality linked incentives, support for domestic API production, and continued investment in compliance driven infrastructure will help Indian pharma companies scale responsibly. For mid sized manufacturers, ease of doing business, faster regulatory clearances, and targeted tax rationalisation can unlock capacity expansion without compromising on standards. A predictable policy environment will be critical for ensuring that Indian medicines remain trusted, accessible, and globally competitive.”
Ritesh Shah, Jt Managing Director, Anuh Pharma:
Budget 2026 comes at a time when the pharmaceutical industry is transitioning from being a cost-efficient producer to a strategic pillar of India’s healthcare and economic growth. The industry does not expect any major announcements on direct or indirect taxes, given the substantial rationalisation undertaken in recent years. Instead, the focus is on calibrated, sector-specific interventions that enhance competitiveness and sustainability.
India’s pharmaceutical sector contributes nearly 6 per cent of total merchandise exports and around 1.7–2 per cent of GDP, making it a strategically vital industry. Beyond these numbers, pharmaceuticals will play a central role in India’s future growth, particularly in biotechnology, medical devices, active pharmaceutical ingredients (APIs) and the broader goal of self-reliance and global supply chain leadership.
The industry’s key expectations from Budget 2026 include
1) Rationalisation of GST and correction of inverted duty structures on raw materials, medicines and medical devices, along with targeted customs duty relief.
2) Restoration of weighted R&D deductions and stronger fiscal support for innovation in complex generics, vaccines and biopharma is also critical.
3)Extension of the PLI scheme, supported by MIP and anti-dumping measures, is needed to safeguard domestic API manufacturing.
4) Additionally, higher public healthcare spending is essential, as nearly 65 per cent of the population lacks adequate access to quality healthcare infrastructure.
5) Finally, targeted incentives for pharma SMEs to comply with the revised Schedule M, through capital subsidies and soft financing, will be crucial to ensure quality, supply continuity and global competitiveness
Rajiv Vasudevan, MD, CEO & Founder, Apollo AyurVAID:
“Over the last few years, the government has made sustained and visible efforts to build awareness and credibility for the Ayush medical system, both within India and globally. MoAyush’s own research initiatives as well as collaborations with WHO, DBT, ICMR, etc. signal a clear intent to move towards evidence-based integration. However, translating this intent into substantial reality shall require dedicated investment commitments of the order of a minimum of INR 500 cr. per year over the next 5 years whereby robust evidence is built for Ayurveda as treatment of choice for select medical conditions starting with conditions such as Diabetes, Parkinson’s, Osteoarthritis-Knee, Lumbar Spondylosis and Sciatica in addition to gut health, sleep health, etc. This provision should be to set up a separate moonshot mission for evidence building fostering strategic public-private partnerships just as DBT has successfully demonstrated in the biotechnology sector over the last 2 decades. Not only shall this reduce healthcare spends for the Government in the medium term with elective surgery and emergency care reduced/obviated, but it will also be welcomed by society at large.
On the demand side, the Government must make a separate budgetary provision for inclusion of Ayurveda-Ayush in the ABPMJAY program. This is an imperative from the public health perspective so that effective secondary and tertiary prevention is covered and out-of-pocket expenses of the common man, currently at an estimated 48% of total spend, is significantly reduced.”
Dr. Seema Pai, President, Indian Society for Clinical Research:
“As we get closer to the Union Budget 2026, we have a strong opportunity to strengthen the clinical research ecosystem of India by increasing investment in academic research, infrastructure, and skill development. Major support for AI-enabled clinical trial data collection and analysis, digital health tool use and collaboration between academia and industry can help in speeding evidence-based healthcare and enable the industry to achieve the target of reaching USD 120-130 billion by 2030 and ultimately USD 450 billion by 2047. Streamlining regulations and incentives for research-led innovation, operational ease of import for technology used in these clinical trials will strengthen India’s position as a trusted global hub for high-quality, ethical clinical research, while ultimately improving patient outcomes. A key pillar of research is a focus on public-private partnerships among academic institutions, policymakers, and patients. This collaboration should aim to ensure evidence-based data generation, leveraging technology and maintaining a strong emphasis on quality.”
Jashan bhumkar, Director, Soujanya Group:
“India’s pharmaceutical sector is at a critical inflection point. While we have built global credibility in generics, the next phase of growth must focus on manufacturing depth and innovation-led scale-up. The upcoming Budget should prioritise easier access to long-term capital, faster environmental and regulatory clearances, and targeted incentives for complex APIs, fermentation-based products, probiotics, enzymes, and specialty excipients. Support for pilot plants, technology transfer, and first-of-kind commercialisation will be key if India is to move from volume-driven growth to high-value, IP-backed pharmaceutical manufacturing.”
Shweta Rai, Managing Director India and Country Division Head South Asia, Bayer Pharmaceuticals:
“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.”
Sandeep Verma, Head of South Asia for Bayer’s Consumer Health business:
“Building on the government’s continued commitment to inclusive growth, nutrition, and maternal and child health, we hope the Union Budget 2026 sustains its focus on strengthening programmes that improve maternal and overall nutrition outcomes across life stages. Budgetary prioritisation of preventive healthcare can play a vital role in improving everyday health and increase productivity. We look forward to working alongside the government to advance responsible self-care and contribute to the shared goal of health for all.”
Duraisamy Rajan Palani, Founder & CEO, Archimedis Digital:
“The life sciences sector stands at a pivotal moment where AI-led regulatory readiness and compliance transformation will define global competitiveness. Indian pharma has made significant progress in digital quality and data integrity; however, sustaining this momentum will require targeted policy support — from incentives for AI adoption in compliance systems to investments in digital infrastructure and regulatory harmonisation. Our State of Digital Transformation in Pharma report has also shown that one-third of Indian pharma organisations have already achieved significant or full digital transformation, underscoring the sector’s readiness for a deeper evolution of AI-led compliance. Looking ahead to the upcoming Union Budget 2026, we believe that policy measures that promote AI adoption, digital skilling, and interoperable regulatory frameworks will further scale automation, enhance trust, accelerate speed-to-market, and strengthen India’s position in global pharmaceutical value chains.”
Priyanka Chigurupati, Executive Director, Granules India:
“As India’s role in global pharmaceutical supply chains continues to expand, this is a critical moment to strengthen our manufacturing and innovation ecosystem. In a global environment driven by supply chain de-risking and diversification, the right policy support can help India emerge as the preferred long-term alternative. A forward-looking Union Budget that improves ease of doing business, enhances manufacturing competitiveness, supports innovation ecosystem, and sharpens export-oriented policies, will reinforce India’s credibility as a reliable source of affordable medicines.”
Sheetal Arora, Promoter & CEO, Mankind Pharma:
“As India finalises the Union Budget 2026–27, the pharmaceutical sector stands at a pivotal juncture expanding healthcare access at home while strengthening India’s position as a global supplier of affordable medicines. With pharma exports crossing US$30 billion in FY25 and India contributing nearly 20% of global generic medicine volumes, the industry’s scale and strategic importance are well established.
As government health allocations, digital health initiatives and public healthcare schemes continue to drive demand for affordable therapies, this budget presents a timely opportunity to deepen support through enhanced R&D tax incentives, including the restoration of globally competitive weighted R&D deductions, expanded PLI-style measures and targeted duty rationalisation to strengthen API self-reliance. Building on the GST rationalisation measures introduced in 2025, we also look forward to a stable and predictable GST framework that addresses inverted duty structures, recognises the unavoidable nature of medicine expiry, quality and safety requirements, and enables smoother cost pass-through across the pharma value chain.
Fast-tracking capacity creation for regulated markets such as the US and EU, supported by customs duty rationalisation for advanced manufacturing and quality compliance infrastructure, will further unlock export growth and high-quality employment, while collectively helping secure supply chains, drive innovation and reduce the cost of medicines for millions of patients across India.”
Arushi Jain, Director, Akums Drugs & Pharmaceuticals:
“India has earned global recognition as a reliable, large-scale supplier of affordable medicines, yet our investment in research and development remains disproportionately low. While the country spends roughly $3 billion on pharma R&D, the United States invests close to $50–60 billion and China nearly $15–20 billion. This gap is not just numerical—it reflects a wider innovation deficit that limits India’s ability to create breakthrough therapies, build future-ready technologies, and strengthen long-term healthcare resilience. The upcoming Budget presents a crucial opportunity to change this trajectory by placing pharma innovation at the centre of national priorities.
However, innovation in pharmaceuticals cannot exist in silos. Alongside R&D funding, there is an urgent need to support advanced manufacturing, workforce skilling, quality digitization, and technology-driven compliance systems that strengthen trust across the healthcare value chain. Fiscal support that encourages automation, digital traceability, anti-counterfeiting solutions, and global regulatory alignment will help Indian companies move up the value curve—from volume-led manufacturing to precision-driven, quality-first delivery.
Equally important is strengthening the institutional capacity of government departments responsible for drug approvals, licensing, and quality monitoring. Adequate budgetary allocation toward regulatory infrastructure, skilled manpower, and review systems can significantly enhance the speed and predictability, of approval timelines—particularly for innovative and complex therapies. Empowering regulators with advanced tools will not only enable timely evaluation of new products but also reinforce robust enforcement of quality standards. A well-resourced, technology-enabled regulatory ecosystem will foster greater industry confidence, encourage innovation-led investments, and ensure that patient safety and quality excellence remain central to India’s pharmaceutical growth story.
Targeted tax incentives for R&D-led companies, dedicated funding for high-risk early-stage research, and policies that promote industry–academia collaboration will be critical. At the same time, strengthening the role of CDMOs as long-term innovation partners—rather than just manufacturing backends—can accelerate drug development, enable faster technology transfer, and support the scaling of complex and regulated therapies. A forward-looking budget that integrates research, manufacturing excellence, skill development, and digital quality infrastructure will determine how competitive and resilient India’s healthcare ecosystem remains in the decades to come.”
Shivani Wagh, Joint MD, Supriya Lifescience:
“The Union Budget 2026–27 comes at a crucial juncture as India’s healthcare and life sciences ecosystem looks to move beyond cost-driven growth towards a sharper focus on innovation, preventive healthcare, and export competitiveness. The policy choices made this year will play an important role in shaping how the sector scales over the coming decade. India today accounts for nearly 20% of the world’s generic medicine supply and over 60% of global vaccine production, with pharmaceutical exports crossing USD 30 billion. However, as global markets become increasingly complex, sustaining growth will depend more on strengthening advanced manufacturing and research capabilities than on volumes alone. In this context, expanding and fine-tuning Production-Linked Incentive (PLI) schemes to include additional APIs, biopharmaceuticals, and export-focused products can enhance supply resilience and global competitiveness. The API segment, expected to grow from Rs 1.07 trillion in 2023 to Rs 1.82 trillion by 2030, will require continued policy backing through PLI expansion, GST rationalisation, and targeted customs duty relief on critical inputs. Such measures can help reduce import dependence while improving cost efficiencies across the value chain.
Innovation funding also remains a key priority. With industry R&D investments projected to reach Rs 170 billion by FY2028, restoring R&D-linked tax incentives and providing fiscal support for clinical research will be important. Programmes such as the Research, Development and Innovation (RDI) outlay and the Bio-RIDE scheme have laid a strong foundation, and further scaling can strengthen startups, MSMEs, and biomanufacturing capabilities. From a broader healthcare perspective, a stronger focus on preventive care is essential. The rising burden of non-communicable diseases, mental health concerns, and an ageing population underscores the need for sustained investments in early diagnosis, digital health infrastructure, and primary care. Expanding insurance coverage through targeted tax incentives can further improve access and risk protection. By aligning innovation incentives, manufacturing support, preventive healthcare investments, and GST simplification, Budget 2026–27 has the potential to reinforce India’s health economy and accelerate its journey towards becoming a globally competitive life sciences hub.”
Satish Reddy, Chairman, Dr. Reddy’s Laboratories:
“India’s pharmaceutical sector has earned global trust through its scale, quality and affordability. As the industry undertakes a strategic shift from volume-led expansion to value-driven growth, closer alignment between science, policy and industry will be critical to advancing innovation across the value chain. With the sector poised to play a pivotal role in realising the vision of Viksit Bharat and its ambition of becoming a USD 500 billion industry by 2047, expectations from the Union Budget 2026 centre on the creation of a structured funding framework to deepen innovation and R&D across the country. This would enable the companies to translate advanced research into complex, high-value therapies while improving patient access.
Equally important is the need to build 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.”