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In the Union Budget 2026, Union Finance Minister Nirmala Sitharaman has announced a slew of bold initiatives for the pharmaceutical and healthcare sectors in the country. The epicentre of the pharmaceutical roadmap announced by the Finance Minister in her record breaking ninth consecutive budget presentation was the unveiling of the Biopharma SHAKTI initiative. With a massive five-year outlay of Rs.10,000 crore, the scheme is designed to position India as a global manufacturing hub for biologics and biosimilars. No doubt, it sends a strong and credible signal of India’s commitment to building a globally competitive life-sciences ecosystem. In the budget, Sitharaman has also proposed establishment of three new NIPERs and upgradation of seven existing institutes, a nationwide network of 1,000 accredited clinical trial sites, besides strengthening the Central Drugs Standard Control Organisation (CDSCO). As a predictable and efficient regulation is as crucial for industry growth as capital support, the focus on strengthening of drug regulator, CDSCO, will result in faster approvals, stronger safeguards and alignment with global standards. All these measures will address the long-standing structural gaps across the innovation-to-manufacturing continuum. For the country’s $50-billion pharmaceutical industry, which contributes nearly 2.5 per cent to GDP, the Budget 2026 reinforces the shift from volume-led growth to value- and innovation-driven leadership. Complementing these initiatives with restoration of weighted R&D deduction up to 200 per cent and expansion of PLI support to advanced modalities, APIs, biosimilars, and complex generics would further accelerate domestic manufacturing, reduce import dependence, and position India as a trusted global supplier of high-quality, affordable biopharmaceutical solutions.
Of course, in her budget Sitharaman has unveiled a series of bold measures aimed at strengthening infrastructure, accelerating innovation and expanding access to quality care. The budget has provisions to transition India from a volume-driven ‘pharmacy of the world’ to an innovation-led global health hub. The creation of 1,000 clinical trial sites will directly address long-standing gaps in research infrastructure and scale. This can materially improve trial quality, speed and geographic reach, while making India a more reliable destination for global clinical development. The focus on workforce development is also commendable. The workforce crisis in healthcare was addressed with a phased plan to train one lakh allied health professionals (AHPs) and 1.5 lakh geriatric caregivers over the next five years. It is definitely a thoughtful approach to improving healthcare quality and resilience. In another laudable initiative, the Finance Minister announced the setting up of NIMHANS-2 in North India and the upgradation of mental health institutes in Ranchi and Tezpur, marking a decisive step toward addressing the nation’s growing mental health challenges. In yet another good initiative, the Finance Minister has exempted basic customs duty on 17 medicines for cancer and exempted seven more rare diseases from import duties on personal imports of medicines. Exempting duty on 17 critical medicines clearly signals the government’s intent to improve access pathways for patients who depend on advanced treatments. The expanded support for rare disease therapies is also noteworthy, given how limited treatment options can be for these conditions. Easing duty-related barriers will help create an environment where scientific progress can reach patients more effectively. In order to promote Ayush sector, the Centre will be setting up three new Ayurveda institutes, and upgrade Ayush pharmacies and drug testing labs. Over all, the Budget 2026 is a step in right direction for the pharmaceutical and healthcare sectors in the country. As some experts say, it is a structurally positive, execution-focused budget that rewards compliance, supports innovation and gives long-term investors greater confidence in India’s policy direction.
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