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The upcoming Union Budget 2025 is poised to be a turning point for India’s healthcare and pharmaceutical sectors, with experts urging the government to introduce measures that drive innovation, boost manufacturing, and enhance export competitiveness. Finance Minister Nirmala Sitharaman is set to present the budget in the Lok Sabha on February 1, 2025.
India’s healthcare and pharma industries, which aim to achieve a $130 billion market size by 2030, are anticipating transformative policies to sustain their growth trajectory. Over the years, initiatives like the Production Linked Incentive (PLI) schemes and enhanced focus on research and development have laid a strong foundation. However, stakeholders believe the next phase requires deeper reforms to align with global dynamics.
“This year’s expectations revolve around incentivising research, streamlining taxation frameworks, and fostering regulatory ease to bolster the sector’s growth and resilience in an evolving global landscape,” said Garima Malhotra, Associate Partner, Healthcare and Lifesciences at Praxis Global Alliance.
Key Demands from the Budget
Experts have highlighted several critical areas that need government attention:
- Research and Development: Increased investment in drug development parks, research institutes, and stronger academia-industry partnerships are seen as vital steps.
- Tax Incentives: Industry leaders are advocating for additional tax deductions, such as 1.25x incentives for expenditures on skill development and training initiatives.
- Financing Solutions: Proposals include tax benefits, extended loan repayment periods, public-private partnerships, and the establishment of dedicated innovation zones.
Focus on Affordability and Inclusivity
Munira Loliwala, VP-Strategy and Growth at TeamLease Digital, stressed the importance of expanding access to affordable healthcare. “Expanding import duty exemptions on life-saving drugs and oncology treatments will significantly reduce costs and enhance access. A commitment to increase public health spending to 2.5% of GDP by 2025, alongside investments in rural healthcare infrastructure and a unified GST framework, will improve affordability across the system,” she said.
Aligning Fiscal Policies with Demographics
Poonam Muttreja, Executive Director of the Population Foundation of India, underscored the need for demographic-sensitive policies. “By investing in the health and education of youth, advancing gender equality, and preparing for an ageing population, India can lay the foundation for inclusive and sustainable development,” she said.
The healthcare and pharma sectors have also called for streamlined regulatory frameworks to encourage innovation, faster approvals, and policies to facilitate the import of refurbished medical devices.
Conclusion
As India’s healthcare and pharmaceutical industries strive to become global leaders, the Union Budget 2025 presents a critical opportunity to introduce reforms that promote innovation, inclusivity, and resilience. With the right measures, experts believe India can secure its position as a hub for advanced healthcare solutions and pharmaceutical excellence.
