New Delhi, Jan 22 (PTI) A structured funding framework to deepen innovation and R and D across India is needed to drive advanced research in the pharma and MedTech sectors, which are poised to play pivotal
roles in realising the vision of Viksit Bharat, industry players said ahead of the Union Budget.
As India's pharmaceuticals 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, Dr Reddy's Laboratories Ltd Chairman Satish Reddy said.
"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 and D across the country," he noted.
This would enable companies to translate advanced research into complex, high-value therapies while improving patient access, Reddy said, adding equally important is the need to build a supportive ecosystem that ensures sustained financing for pharmaceutical innovation.
Expressing similar views, Poly Medicure Ltd Managing Director, Himanshu Baid, said for India to build a truly competitive MedTech manufacturing ecosystem, the sector needs a policy approach that reduces cost disabilities, nurtures local innovation and enables faster market access.
The upcoming Budget offers an opportunity to help close these critical gaps.
"Alongside tax rationalisation, the sector also needs focused public investment in R and D and quality infrastructure. A dedicated Rs 1,000-crore MedTech R and D and clinical-validation fund would support indigenous product development and the evidence generation required for global competitiveness," he said.
Baid pointed out that while the government has already taken steps to rationalise GST rates to improve affordability, the resulting inverted duty structure, where many finished devices are taxed at 5 per cent while most inputs and input services attract 18 per cent, will lead to large input tax credit accumulations and increased working-capital pressures for manufacturers.
ZEISS India CFO Dhaval Radia said, “As we look ahead to the upcoming Union Budget, there is a strong expectation around further rationalisation of customs duties, particularly for the core growth sectors such as healthcare and high-end and precision manufacturing.”
Addressing inverted duty structures and ensuring a more predictable import and simplified governance framework will be critical for improving cost competitiveness and long-term investment planning.
Philips Indian Subcontinent, Head of Finance, Dev Tripathy said, "To establish India as a medical device export hub, we need a sustainable ecosystem for MedTech manufacturing. New PLI schemes should encourage holistic development ensuring comprehensive growth across the industry..
He further said delivering quality healthcare to the last mile is crucial for India, and this can only be achieved by leveraging AI and the country has the talent to drive AI-led innovation.
Incentives for AI innovation, job creation, and high-end service exports through Global Capability Centres (GCCs) must be prioritised, Tripathy said, adding "this will foster innovation and position India as a competitive global player".
Apollo Hospitals Enterprise Ltd Promoter Director and Executive Chairperson of Apollo Healthco, Shobana Kamineni drew attention of the government towards supporting preventive healthcare.
"A Viksit Bharat will be built on a healthy youth and workforce -- nearly one billion strong by 2047. 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," she said.
Kamineni further said, "As India led the world in digital payments, preventive healthcare can be our next global export."
Rainbow Children's Medicare Ltd Founding Chairman Ramesh Kancharla said, "If India is to build a healthier and more resilient generation, the Budget FY 2026-27 must place children firmly at the centre of its priorities with investment that is bold, compassionate and truly commensurate with the promise of our young population."
Allowing tax deductions for essential diagnostics and annual health check-ups up to Rs 10,000 per child will ease the financial burden and help embed a culture of early intervention, he noted. PTI RKL MR
