Why Execution is Critical to Making Budget 2026's Healthcare, Pharma Push a Success

India is renowned as the world’s pharmacy, but that label often carries with it the notion that the country’s pharmaceutical role is limited to being an important supplier of generic drugs. The country is now trying to change that. In the Union Budget 2026, announced steps towards “making India a global bio-pharma manufacturing hub.”

At the centre of this shift is Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation), a ₹10,000-crore, five-year mission designed to build domestic capacity in biologics and biosimilars, a segment that accounts for a growing share of global drug spending but where India remains structurally dependent on imports. 

Biologics are complex medicines made from living organisms for treating serious diseases, while biosimilars are identical to biologics but available at a lower cost.

The biologics market alone is estimated to exceed $500 billion globally, according to Scorpius Biologics, driven by cancer, autoimmune and chronic disease therapies. Indian firms have made recent inroads in biosimilars, with Biocon becoming the first Indian company to launch a biosimilar insulin in Japan in 2016 and also commerciaising two biosimilars in the US. However, their growth has been constrained by manufacturing scale, regulatory capacity, and clinical research infrastructure have remained constraints. 

Pharmaceutical Push

The government now wants to address these gaps simultaneously.

Under Biopharma SHAKTI, it plans to establish three new National Institutes of Pharmaceutical Education and Research (NIPERs) and upgrade seven existing ones, while also creating a network of 1,000 accredited clinical trial sites across the country. Regulatory strengthening, including aligning the Central Drugs Standard Control Organisation (CDSCO) closer to global standards, is expected to reduce approval timelines and improve India’s credibility as a destination for complex trials.

“This Budget advances a clear capacity and competitiveness agenda for healthcare,” Sunil Thakur, partner at Quadria Capital, tells AIM, noting that the emphasis is less on immediate incentives and more on building infrastructure that supports globally competitive therapies and biosimilars. The approach, he says, reflects a “capacity-first” strategy that could attract long-term private investment.

For companies operating in research, testing and compliance, the focus on quality infrastructure is critical. “The creation of 1,000 clinical trial sites and the move to strengthen CDSCO to global standards demonstrate a deep understanding of what it takes to build a globally competitive biopharmaceutical industry,” notes Saurabh Arora, managing director, Auriga Research. 

He adds that emphasis on R&D and testing facilities would also strengthen India’s inspection and certification ecosystem, which is becoming increasingly important as Indian manufacturers target regulated markets such as the EU.

Industry leaders said the focus is timely, given India’s changing disease profile and the rising importance of complex therapies.

“The acknowledgement that non-communicable diseases such as cancer, diabetes and autoimmune disorders are now the dominant healthcare challenge, and the focus on biologics through affordable biosimilars as the new standard of care, is important. Strengthening regulatory capacity through a dedicated scientific review cadre at CDSCO is critical to meeting global benchmarks,” notes Shreehas Tambe, CEO and MD of Biocon Biologics.

Equipping Healthcare Workforce

Manufacturing, however, is only one side of the healthcare equation. India faces a shortage of trained healthcare workers, particularly caregivers and allied health professionals. Excluding AYUSH doctors, India’s doctor-to-patient ratio is 1:1,700—well above the WHO target of 1:1,000, according to the National Institutes of Health. This issue is expected to compound as demand for healthcare workers rises due to ageing populations, lifestyle diseases, and wider health insurance coverage that has brought more patients into the formal healthcare system.

The Budget proposes to train 1.5 lakh multi-skilled caregivers in the coming year, supported by NSQF (National Skills Qualifications Framework)-aligned programmes that combine core care with allied skills such as wellness practices and operating medical assistive devices. Over the next five years, one lakh allied health professionals are expected to be added across 10 disciplines, including radiology, anaesthesia, operating theatre technology, applied psychology, and behavioural health.

For clinicians, the emphasis on workforce depth can have tangible effects on patient outcomes. Dr Kanika Batra Modi, gynaecological oncologist at the Max Institute of Cancer Care, says, “The caregiver training push would significantly strengthen maternal and women’s healthcare support systems, especially in tier-2, 3 and rural areas.” She also highlights the expansion of emergency and trauma care facilities at district hospitals as critical for safer pregnancies and reproductive healthcare.

Another pillar of the Budget is medical value tourism, a sector estimated to generate $13–15 billion annually by 2026 if infrastructure and facilitation improve, according to FICCI. Sitharaman proposed a scheme to support states in setting up five regional medical hubs in partnership with the private sector. These hubs are envisioned as integrated healthcare complexes that combine hospitals, education and research facilities, diagnostics, post-care and rehabilitation infrastructure, AYUSH centres, and medical tourism facilitation units.

Caveats

Healthcare providers see potential but caution against uneven execution. 

Lt Gen (Retd) Dr Vimal Arora, the chief clinical officer at Clove Dental, describes the proposal as a progressive step, particularly in creating jobs and expanding advanced care beyond metros. However, he stresses that expanding medical education and digital health access in tier-2 and tier-3 cities would be key to ensuring these hubs reduce, rather than reinforce, the rural-urban divide.

Affordability remains a critical pressure point in a system where out-of-pocket expenditure still accounts for a large share of healthcare spending. As per National Health Accounts Estimates 2021-22, the out-of-pocket expenditure was 39.4% of total health expenditure in 2021–22, even though it was a decline from 48.8% in 2017–18. 

The Budget proposes to exempt basic customs duty on 17 cancer drugs and add seven more rare diseases to the list eligible for duty-free personal imports of medicines and special medical foods.

While limited in scope, clinicians say the relief is meaningful. “The duty exemptions on critical cancer drugs will improve treatment affordability and patient access,” notes Dr Modi, though adding a caveat that sustained public investment would be required to strengthen infrastructure in underserved regions.

From an innovation standpoint, the focus on healthcare in the Budget—with the allocation for the sector up 10% from last year—puts India at an inflection point. Sateesh Andra, founder and Managing Director of Endiya Partners, notes the shift is from assembly-led incentives to full-stack innovation spanning IP creation, advanced manufacturing and research infrastructure.

For venture investors, the coherence of the policy stack matters more than individual schemes. Clinical trial networks, skilling pipelines and manufacturing incentives together reduce execution risk for founders operating in capital-intensive sectors such as biologics, diagnostics, and medtech. But Andra cautions that outcomes will depend on how quickly these policies translate into accessible infrastructure and skilled talent on the ground.

“Not all concerns are addressed”, Surjeet Thakur, founder and CEO of health tech company TrioTree Technologies, also notes. While he welcomes the focus on innovation and advanced healthcare infrastructure, he adds that a sharper increase in public healthcare spending could have strengthened last-mile access, particularly in rural and underserved regions.

Still, Budget 2026 positions healthcare from a consumption-led sector to one embedded in India’s manufacturing, services export, and employment strategy. As Quadria’s Thakur observes, no single measure is transformational on its own, but the cumulative direction points towards long-term capacity building.