Industry demands targeted reforms to drive pharma industry growth and enhance global competitiveness

As India’s pharmaceutical and healthcare industries brace for the Union Budget 2025, key stakeholders highlight the need for targeted reforms to drive pharma industry growth, enhance global competitiveness, and improve healthcare access.
Simplifying compliance via a single-window reporting mechanism would ease operations for manufacturers, while investing in pharma parks with centralized utilities—such as power, water, and steam—could significantly lower project costs. Tax reforms, including lower corporate tax rates, would further boost India’s global competitiveness. Moreover, greater export support for MSMEs through reimbursement of regulatory inspection fees could encourage new players to establish world-class facilities, states Mridul Dhanuka, director, Orchid Pharma, while underscoring the importance of expanding the production-linked incentive (PLI) scheme to include active pharmaceutical ingredients (APIs) that depend on imported starting materials.
This move would enhance India’s self-reliance in critical drug manufacturing. Additionally, incentivizing R&D through success-based fee support can foster cost-efficient processes, green manufacturing, and drug innovation, ensuring long-term sustainability.
Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance (IP Alliance), envisions India’s pharmaceutical sector reaching USD 120–130 billion by 2030 and USD 450 billion by 2047. Achieving this goal requires at least 10% of the National Research Fund allocated to life sciences, reinstating 200% weighted R&D deductions, and expanding the patent box regime to include overseas income from patents. Removing Section 194R related to marketing samples would also improve ease of doing business.
Additionally, incentivizing AI-driven pharmaceutical research would complement the AI Centres of Excellence and medical device training initiatives introduced in Budget 2023. These measures would enhance India’s innovation ecosystem, fostering global leadership in life sciences.
According to Hitesh Sharma, partner and life sciences leader – tax, EY India, reinstating a 200% tax deduction for R&D investments—especially for novel drugs—would be a game-changer. Developing API and medical device manufacturing infrastructure is also critical to reducing import dependence. Furthermore, AI-driven drug discovery remains underdeveloped in India, and government incentives in this area could unlock significant potential.
The government must prioritize healthcare funding, aiming for the 2.5% GDP allocation set by the National Health Policy (2017). Reintroducing the 15% concessional tax rate for new manufacturers and exempting customs duties on life-saving medicines would enhance accessibility and affordability.
Sachidanand Upadhyay, managing director, Lord’s Mark Industries Limited, envisions a favourable budget that supports affordability, market accessibility, and innovation. Increasing the health budget to expand infrastructure and coverage, introducing a uniform tax structure, and enhancing PLI schemes for pharmaceutical exports are key demands to reinforce India’s position in the global value chain.
Abhay Soi, president, NATHEALTH and chairman & managing director, Max Healthcare Institute Limited, stresses that India’s healthcare system is at a crossroads. Addressing systemic gaps, such as the shortage of medical specialists, rising cancer care costs, and hospital infrastructure deficits, is crucial. Strategic reforms in hospital capacity expansion, reimbursement frameworks, and medical education will not only solve current challenges but also secure India’s global healthcare leadership.
Ameera Shah, promoter and executive chairperson, Metropolis Healthcare Ltd., emphasizes the pivotal role of diagnostics in early disease detection and treatment planning. Standardizing practices through mandatory NABL accreditation for all laboratories, introducing 0% GST on diagnostic services, and increasing tax exemptions for preventive health check-ups from Rs. 5,000 to Rs. 10,000 would significantly benefit the sector.
Enhanced R&D incentives for diagnostic technology could position India as a global leader in healthcare advancements.
Himanshu Baid, managing director, Poly Medicure Ltd., calls for standardizing the GST rate at 12% across all medical devices to simplify taxation. Expanding export incentives under RoDTEP to 2-2.5% would boost the global presence of Indian medical device manufacturers. Extending the PLI scheme by 2-3 years would further support local players in scaling production and reducing import dependency.
He also advocates for curbing the reuse of single-use medical devices, which would improve patient safety and quality standards. An increase in healthcare spending to 2.5-3% of GDP is necessary for sustained industry growth.
With a strategic policy push, India is well-positioned to lead in affordability, innovation, and global healthcare excellence.
Source: Pharmabiz