Mumbai: India’s pharmaceutical and healthcare industry has called for greater support for research and development (R&D) in the upcoming Union budget, according to a survey by ET-PwC.
Three-fourths of the CXOs said that enhanced R&D incentives, including stronger tax credits and greater support stronger tax credits and greater support for drug discovery, should be the top priority to accelerate growth and innovation in the country.
The survey covered 40 CXOs from companies with annual revenue ranging from less than 500 crore to more than 10,000 crore.
Finance minister Nirmala Sitharaman will present the budget for 2026-27 on February 1.
Industry leaders also flagged the need for faster and more efficient risk financing for innovation-driven biotech startups (15%), alongside speedier regulatory pathways and deeper digitalisation to enable quicker approvals and global competitiveness.
About 8% of the companies with revenue of at least ₹10,000 crore and above said that addressing the goods and services tax (GST) inverted duty structure by rate rationalisation could be another key element in accelerating growth and innovation in the pharma industry. About 67% of the companies called for R&D incentives as the key lever for future growth.
As India looks to strengthen its healthcare ecosystem, the upcoming Budge presents an opportunity to move decisively from scale to sustainability. Continued support for domestic pharmaceutical manufacturing-particular APIs and critical intermediates-will be key to building supply chain resilience and reducing external dependencies.
At the same time, targeted investments in healthcare infrastructure, digital health, and R&D can help improve access, affordability, and outcomes. Incentivising innovation, easing regulatory friction, and enabling faster clinical research will be critical for India to strengthen its position as a globa life sciences hub while meeting the evolving healthcare needs of its population.” – Sujay Shetty, Partner and Leader – Health Industries, PwC India
Sudarshan Jain, secretary general of Indian Pharmaceutical Alliance, said that the industry was on course to achieve its target of reaching $120-130 billion by 2030 and $450 billion by 2047. He emphasised the need for strengthening 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,” he said.
This should include restoration of weighted R&D deduction (up to 200%), which would significantly boost investment in novel drugs, complex generics, biosimilars and vaccines, according to him.
“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 (production-linked incentives)-style measures and targeted duty rationalisation to strengthen API self-reliance,” said Sheetal Arora, promoter and CEO of Mankind Pharma.
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Dr Reddy’s Laboratories chairman Satish Reddy called for measures to deepen innovation and R&D in the sector. “India’s pharmaceutical sector has earned global trust through its scale, quality and affordability… expectations from the Union budget 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,” he said.
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“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,” Reddy said.
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Asked about the priority area the Union budget should focus on to strengthen India’s healthcare ecosystem, 65% of the CXOs highlighted the need to accelerate digital and artificial intelligence (AI)-driven health adoption, including the Ayushman Bharat digital mission. About 13% of the business leaders said that the budget should focus on facilitating setting up tertiary hospitals in smaller cities, expanding insurance coverage for outpatients, cap hospital charges and increasing medical and health insurance.
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The ET-PwC survey participants (8%) also highlighted the need to reform Pradhan Mantri Jan Arogya Yojana to expand coverage, services and provider adoption. About 5% said that mission mode initiatives to improve life expectancy and longevity outcomes would be crucial to strengthening the country’s healthcare ecosystem.
Nearly 75% of the survey respondents also said that faster regulatory approvals would be key to position India as a global clinical research hub. They also called for budgetary support for clinical research, acceptance of data generated from developed countries and use of technology to speed up trial approvals.
To another question on how impactful expansion of digital health initiatives (including Ayushman Bharat Digital Mission) would be for healthcare delivery in India, nearly all the respondents said it would be “extremely” or “very” impactful.
“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,” said Shobana Kamineni, promoter director of Apollo Hospitals Enterprise and executive chairperson of Apollo Healthco.
Source : Economictimes
