Budget 2026: A defining moment for India’s medical devices and life sciences industry

The Union Budget 2026 marks one of the most strategically consequential policy statements for India’s life sciences and medical devices sector in recent years. At a time when global supply chains are being rearchitected and nations are competing fiercely to attract biopharma and MedTech investments, India has signalled, with unusual clarity, its ambition to become a globally competitive innovation and manufacturing hub. 

The centrepiece of this ambition is the newly announced Biopharma Shakti programme, backed by a ₹10,000crore outlay over five years. For an industry that has long argued for scale, predictability, and targeted support, this initiative represents a watershed moment. By explicitly prioritising biologics, biosimilars, and advanced therapeutic modalities, the government is aligning public investment with the future of global healthcare, where precision, longevity, and affordability converge. 

Biopharma Shakti is not merely a funding announcement; it is a structural intervention. The programme envisions a national biopharma innovation and manufacturing network, the establishment of three new NIPERs, the upgradation of seven existing institutes, and the creation of 1,000 accredited clinical trial sites across the country. These measures address long-standing gaps in India’s innovation-to-commercialisation pipeline: fragmented research capacity, limited translational infrastructure, and insufficient clinical validation ecosystems. 

For the life sciences sector, this is the most comprehensive attempt yet to build an end-to-end ecosystem, from discovery to development to deployment, within India’s borders.   

Regulatory strengthening: A long-awaited reform 

Equally significant is the Budget’s focus on strengthening the Central Drugs Standard Control Organisation (CDSCO). The commitment to expand scientific review capacity, induct domain specialists, and enforce time-bound approvals is a direct response to industry demands for regulatory predictability and global alignment. 

For investors, regulatory efficiency is often as important as fiscal incentives. A modernised CDSCO, equipped with specialised talent and digital workflows, can dramatically reduce approval timelines, improve compliance quality, and enhance India’s credibility as a global supplier of high-quality medical products. This is especially critical as India seeks to expand its footprint in regulated markets across the EU, the U.K., and North America.   

A shift from volume to value 

India’s pharmaceutical industry, now valued at $50 billion and contributing nearly 2.5% to GDP, has historically been driven by scale and cost competitiveness. Budget 2026 reinforces a strategic pivot toward value-driven growth, anchored in innovation, complex generics, biosimilars, and advanced modalities. 

However, to fully unlock this transition, the industry continues to seek restoration of the Weighted R&D Deduction up to 200%, a measure that previously catalysed private-sector innovation. Similarly, expanding PLI support to cover APIs, biosimilars, and high-value complex generics would accelerate domestic manufacturing and reduce import dependence, an imperative underscored by pandemic-era disruptions.   

Medical devices: A parallel opportunity 

While the Budget’s marquee announcements focus on biopharma, the medical devices sector, one of India’s fastest-growing healthcare segments, stands to benefit indirectly from the broader push toward deregulation, compliance rationalisation, and manufacturing competitiveness. 

Historically, incentives such as weighted R&D deductions and PLI benefits have been extended to both pharmaceuticals and medical devices. The industry now hopes for similar continuity, especially as India seeks to reduce its heavy dependence on imported medical equipment, which still accounts for 70-80% of domestic consumption. 

The finance minister’s assurance of deregulation and reduction of compliance burden is particularly relevant for medical device manufacturers, who face a complex web of approvals, standards, and licensing requirements. Streamlining these processes would not only improve ease of doing business but also help Indian manufacturers leverage recently concluded FTAs with the EU, EFTA, and the U.K., where demand for high-quality, affordable medtech solutions is rising.   

Positioning India as a global medtech and biopharma hub 

The Budget’s overarching message is clear: India intends to move up the global value chain. The combination of targeted investment, regulatory strengthening, talent development, and international market access creates a foundation for long-term competitiveness. 

For the medical devices and life sciences sectors, the next phase will depend on execution. Building world-class clinical trial networks, operationalising new NIPERs, and ensuring that CDSCO reforms translate into measurable efficiency gains will require sustained coordination between government, industry, and academia. 

Yet the direction is unmistakable. With Biopharma Shakti as its anchor and a renewed focus on regulatory and manufacturing reforms, Budget 2026 positions India to emerge not just as the “pharmacy of the world,” but as a trusted global hub for biopharma innovation and high-quality value-added medical devices. 

(The author is forum coordinator, Association of Indian Medical Device Industry. Views are personal.)