Budget 2026: India’s push for global biopharma leadership

By Suresh Subramanian

The FY26 Union Budget promises a structural pivot for India’s life sciences and healthcare sectors — transitioning from episodic spending towards long-term capacity building, innovation, and global competitiveness.

Biopharma Shakti signals a pivotal evolution in India’s life sciences agenda — with a ₹10,000 crore outlay aimed at transforming India into a global biopharmaceutical manufacturing and innovation hub. This underscores a clear shift from volume-centric production to value-driven capabilities in biologics, vaccines and advanced therapies. This also aims in catalysing domestic innovation, deepening manufacturing competitiveness, and strengthening global supply chain positioning for high-end biologics and biosimilars.”




Medical devices

Though not detailed as a standalone package for Medical Devices, the overall manufacturing strategy emphasises manufacturing momentum and domestic production, which should translate into stronger demand signals for medical devices and diagnostic technologies, especially where in-country production is incentivised as part of broader industrial policy.

The much talked about feedback from the industry leaders ahead of the budget where they had emphasised GST rationalisation, lower input costs and tech incentives for AI tools in diagnostics, these views remain part of the structural conversation and are perhaps reflected in broader support for innovation and manufacturing.

Healthcare

At an allocation of Rs 1,06,530 plus crore, to build healthcare capacity and infra there is a sustained attempt and commitment to broad health priorities. Creation of five Regional Medical Hubs will be supported in partnership with states and private players is aimed at expanding medical tourism, enhancing tertiary care delivery, and integrating research with clinical services. This is timely aimed at harmonising clinical services, education and research to serve both domestic needs and international patient inflows.

Healthcare allocation reflects deepening prioritisation of health as economic infrastructure and not just social welfare.

The Budget enhanced scheme allocations include:

• Ayushman Bharat / PM-JAY: 9,500 crore, up about ₹500 crore to expand coverage and hospital networks.
• National Health Mission (NHM): 39,390 crore to strengthen primary healthcare, maternal, child and disease control interventions.
• Allied health and caregiver training: 980 crore over three years for key disciplines and geriatric care.
• Human Resources for Health & Medical Education: 1,725 crore to expand medical college and nursing capacity.
• ICMR: 4,000 crore for research and innovation.

• AIIMS and premier institutions: upsize individual allocations to support tertiary and specialised care.
• Ayushman Bharat Digital Mission (ABDM): 350 crore to expand digital health interoperability and telemedicine.

AYUSH & Traditional Medicine

The Government is clearly scaling traditional medicine as part of mainstream policy, pairing clinical credibility with export and global market positioning. As per the budget

• Establishment of three new All India Institutes of Ayurveda.
• Upgrading AYUSH pharmacies and drug testing labs to enhance quality and certification.
• Expanding the WHO Global Traditional Medicine Centre in Jamnagar to support research, training and evidence building.

The Budget emphasised boosting Allied Health Professionals (AHPs) — a foundational change that expands the healthcare workforce beyond doctors and nurses into diagnostics, rehabilitation and tech-enabled care. It provides for strengthening training and credentialing allied health talent is essential, particularly for emerging areas like medical genomics, imaging and data science and will reduce operational bottlenecks across care settings.

The FY26 Budget reinforces AI and digital transformation as core national priorities. We expect accelerated investment in interoperable platforms, federated data governance and AI-assisted tools — which will finally unlock the potential of real-time analytics, clinical decision support and predictive health monitoring. The budget’s focus on technology-led governance and digital services corroborates expectations for enhanced digital health financing including deepening the Ayushman Bharat Digital Mission (ABDM) infrastructure and interoperability stacks. Broader policy shifts toward digitisation, insurance reform and AI adoption will enable private capital participation, expansion of PM-JAY provider networks, and cross-sector innovation.

The PM-JAY outlay increase (~₹9,500 crore) directly backs scheme expansion, hospital network strengthening and beneficiary reach — critical for financial risk protection.

An important takeaway is that through this budget support for PM-JAY not only reflects sustained commitment to universal coverage and financial protection, but also simultaneous investment in primary care and workforce will improve both access and quality.

The government announced plans to overhaul the Central Drugs Standard Control Organisation (CDSCO) to accelerate approvals and strengthen compliance, harmonisation with global standards, a major inflection for regulatory quality and speed.

Way forward

Overall, this budget has with strategic thrusts like Biopharma Shakti, regional medical hubs, and an AI-enabled digital infrastructure projects confidence in the life sciences ecosystem, attracts technology-led investment, and reinforces India’s positioning as a credible global partner in pharmaceuticals, biotech and healthcare solutions and lastly improve PM Jay insurance coverage and build access and quality to improve healthcare delivery and outcomes.

(Suresh Subramanian is National Lifesciences Leader, EY Parthenon India)