Budget 2026: Pharma and MedTech Industries Advocate for Enhanced Funding Support for R&D and Innovation
Industry leaders in the pharmaceutical and MedTech sectors are advocating for a structured funding framework ahead of the Union Budget 2026. They believe that enhancing innovation and research and development (R&D) is crucial for achieving India’s vision of a developed nation, known as Viksit Bharat. Key figures, including Dr. Satish Reddy of Dr. Reddy’s Laboratories, emphasize the need for a shift from volume-driven growth to value-driven strategies, aligning science, policy, and industry to foster innovation.
Call for Structured Funding Framework
As India aims to transform its pharmaceutical industry into a $500 billion sector by 2047, industry leaders are urging the government to establish a structured funding framework. Dr. Satish Reddy highlighted that the industry is transitioning towards value-driven growth, which necessitates a closer collaboration between scientific research, policy-making, and industrial practices. He stated that such alignment is essential for advancing innovation throughout the pharmaceutical value chain. The expectations from the upcoming Union Budget focus on creating an environment that supports deeper innovation and R&D efforts across the country, which is seen as vital for realizing the broader vision of Viksit Bharat.
MedTech Sector Needs Policy Support
In the MedTech sector, leaders are echoing the call for a supportive policy framework that addresses cost disadvantages and fosters local innovation. Himanshu Baid, managing director of Poly Medicure Ltd, proposed the establishment of a dedicated Rs 1,000-crore fund aimed at R&D and clinical validation to bolster indigenous product development. He raised concerns regarding the inverted duty structure, where finished medical devices are taxed at a lower rate compared to their inputs, creating financial strain on manufacturers. Additionally, Dhaval Radia, CFO of ZEISS India, emphasized the importance of rationalizing customs duties and simplifying governance to enhance cost competitiveness and facilitate long-term investment planning in the MedTech space.
Focus on AI and Preventive Healthcare
The integration of artificial intelligence (AI) and a focus on preventive healthcare are also gaining attention from industry leaders. Dev Tripathy, head of Finance at Philips for the Indian subcontinent, advocated for new Production-Linked Incentive (PLI) schemes that would support comprehensive growth in the MedTech sector. He stressed the need for incentives that promote AI-driven innovation, job creation, and the establishment of Global Capability Centres, positioning India as a significant player in the global market. Meanwhile, Shobana Kamineni from Apollo Hospitals called for a shift towards a prevention-first healthcare model, suggesting that preventive healthcare could become a major export for India. Ramesh Kancharla, chairman of Rainbow Children’s Medicare, proposed tax deductions for essential diagnostics and annual check-ups for children, aiming to encourage early intervention and foster a healthier future generation.
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