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Prescription For Growth: Pharma, Health Sectors Seek R&D Boost, Higher Spending From Budget 2026
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Industry leaders say Budget 2026 is a crucial moment to shift from a volume-driven healthcare economy to one anchored in innovation, prevention and long-term resilience
Calling for higher public health spending, the corporate honchos & healthcare lobbies have asked for targeted tax incentives for research and manufacturing, regulatory reforms to support innovation and affordability. Representational image
India’s pharmaceutical and healthcare sectors have pitched for a strong policy push in the Union Budget to raise health spending, revive R&D incentives and reform regulations to strengthen global competitiveness.
Calling for higher public health spending, the corporate honchos & healthcare lobbies have asked for targeted tax incentives for research and manufacturing, regulatory reforms to support innovation and affordability.
Industry leaders told News18 that while India has emerged as a global supplier of affordable medicines and medical devices, mounting pressures from geopolitical uncertainty, tariff barriers, supply-chain disruptions and rising non-communicable diseases (NCDs) require sustained fiscal and policy support.
The coming Budget on Sunday, they argue, is a crucial moment to shift from a volume-driven healthcare economy to one anchored in innovation, prevention and long-term resilience.
At the core of the demands are calls to revive incentives for pharmaceutical research and development, address tax and GST anomalies affecting manufacturing, strengthen domestic MedTech production, and expand public healthcare financing in line with national health targets. Healthcare providers, meanwhile, are seeking reforms in insurance coverage, reimbursements and preventive care as disease patterns shift sharply towards chronic illnesses.
Pharma: R&D push, tax reforms and manufacturing competitiveness
Pharmaceutical companies have urged the government to reinforce India’s innovation ecosystem through globally competitive R&D incentives and a stable policy environment.
According to Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance, the lobby of the domestic pharma companies, including Sun Pharma, Cipla, Glenmark and IPCA Labs, “The industry seeks globally competitive R&D incentives that align with India’s innovation ambitions, enhance the scientific ecosystem, and support the transition from a volume-driven model to an innovation-led pharmaceutical sector.”
The industry is seeking restoration of the weighted R&D tax deduction of up to 200% and a strengthened patent box regime with a competitive 5% tax rate to support innovation in complex generics, biosimilars, vaccines and novel drugs. Companies have also flagged the need to rationalise GST structures to correct inverted duty anomalies that strain manufacturing viability.
Satish Reddy, chairman of pharma giant Dr Reddy’s Laboratories, believes that as the 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”. He added that expectations from the budget centre on structured funding frameworks to deepen R&D and enable translation of advanced research into high-value therapies.
“With the sector poised to play a pivotal role in realising the vision of Viksit Bharat and its ambition of becoming a $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&D across the country. This would enable the companies to translate advanced research into complex, high-value therapies while improving patient access,” he suggested.
The MedTech industry echoed similar concerns, particularly regarding taxation and domestic capability-building.
“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,” Himanshu Baid, managing director at medtech firm, Poly Medicure. He flagged the inverted GST duty structure, where finished devices attract lower tax rates than inputs, leading to working capital pressures.
Global technology players also emphasised the role of artificial intelligence and exports. Dev Tripathy, head of finance, Philips (Indian Subcontinent), said, “Delivering quality healthcare to the last mile is crucial for India, and this can only be achieved by leveraging AI.”
Tripathy explained that AI will enable “early diagnosis and consolidate data points, helping clinicians make accurate decisions and bridge the supply-demand gap”. “India has the talent to drive AI-led innovation, and incentives for AI innovation, job creation, and high-end service exports through global capability centres (GCCs) must be prioritised,” he said.
Health: NCD burden, insurance gaps and preventive care
On the healthcare delivery side, hospital leaders and diagnostics players highlighted the growing dominance of non-communicable diseases and the need to pivot from episodic treatment to prevention-led care.
Ameera Shah, promoter and executive chairperson at diagnostic lab chain Metropolis Healthcare, said that India stands at a defining moment in its healthcare transition. “With non-communicable diseases projected to account for nearly 75 per cent of morbidity and mortality by 2030 and the economic cost of NCDs estimated at USD 6 trillion over the next decade, the country must urgently pivot from episodic care to comprehensive, holistic care, which is prevention-led, viable and resilient healthcare systems—an essential pillar of the Viksit Bharat vision,” said Shah, president, NATHEALTH, an apex healthcare body serving as a credible and unified voice in improving access and quality of healthcare.
Hospitals have also flagged pressure points in insurance coverage and reimbursements. Dr Purshotam Lal, director-interventional cardiologist and chairman, Metro Group of Hospitals, expects the government to widen Ayushman Bharat–Pradhan Mantri Jan Arogya Yojna (PMJAY). He added that with rising diabetes, hypertension, cardiovascular disease and cancers — especially among younger populations — India needs an insurance model that prioritises preventive healthcare.
Moreover, operational sustainability remains another concern, according to Dr Sanjeev Gupta, medical director, Sri Balaji Action Medical Institute and Action Cancer Hospital, New Delhi, who pointed to delayed reimbursements under government schemes. He said that “timely settlement of dues and clearer pricing frameworks are essential to maintain quality healthcare delivery”, adding that periodic review of package rates was necessary to keep pace with advances such as robotic surgeries and new therapies.
“In an era of rapid innovation, including robotic-assisted surgeries and advanced therapeutics, several government schemes have limited coverage for such procedures, along with capping on certain critical drugs. Periodic review of package rates is therefore essential to keep policies aligned with evolving clinical practices,” said Dr Gupta.
Together, industry leaders argue that Budget 2026 must balance affordability with innovation, strengthen domestic manufacturing, and reorient healthcare delivery towards prevention and early diagnosis — a shift they say is essential to protect both public health and long-term economic growth.
January 30, 2026, 20:13 IST
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UK inflation held steady at 3% in February before the impact of an energy shock linked to war in the Middle East, official figures have revealed.
Economists have said data showing flatlining inflation highlights “the calm before the storm”, with inflation expected to accelerate again in the coming months.
The rate of Consumer Prices Index (CPI) inflation was unchanged from the level reported in January, the Office for National Statistics (ONS) said.
It was in line with predictions from economists.
However, the steady picture for inflation does not yet reflect the impact of the conflict in the Middle East on the cost of living, with the first attacks taking place at the very end of February.
Oil and gas prices have jumped in recent weeks due to the conflict and other goods prices could also be affected by disruption to shipping through the Strait of Hormuz.
Economists said inflation could lift as high as 4% in the third quarter of 2026 due to the projected surge in energy costs.
ONS chief economist Grant Fitzner said: “After last month’s slowdown, annual inflation was unchanged in February as various price movements offset each other.
“The largest upwards driver was the price of clothing, which rose this month but fell a year ago.
“This was offset by falls in petrol costs, with prices collected before the start of the conflict in the Middle East and subsequent rise in crude oil prices.”
The February data showed clothing and footwear prices contributed to inflation, with prices up 0.9% for the month – its highest level since March 2025 – after previously staying flat in January.
However, this upward impact on inflation was cooling inflation in other areas.
Inflation across the services sector eased slightly to 4.3% for the month, dipping to its lowest level for almost four years.
Slower alcohol and tobacco price rises were also a drag on inflation, easing to 3.6% for the month – the lowest since February 2022.
The slowdown was driven by falling inflation for the prices of beers, wines and spirits over the month.
Elsewhere, motor fuel inflation also eased back, with the average price of petrol falling by 1.6p per litre between January and February.
However, petrol and diesel prices have risen significantly since the latest data after the price of crude oil jumped due to the conflict in the Middle East.
Economists said on Wednesday that inflation is now set to accelerate over the coming months as the impact of the conflict feeds into the price of goods.
Stuart Morrison, research manager at the British Chambers of Commerce, said: “For businesses across the UK, today’s inflation data represents the calm before the storm.
“UK firms are particularly exposed to the economic impact of the crisis in the Middle East as our electricity prices are tightly tethered to global gas prices.
“This will feed directly into higher costs and renewed inflationary pressure in the months to come.”
Luke Bartholomew, deputy chief economist at Aberdeen, said: “Today’s inflation report is little more than a relic of the world before the Iran conflict.
“While the February report was broadly in line with expectations, and confirms that inflation was on a path back to 2%, the outlook for inflation has radically changed.”
Experts also indicated previous expectations that interest rates would be cut further this year have been scuppered, with many predicting the Bank of England will continue to hold them at 3.75% in an effort to diminish further price rises.
Matt Swannell, chief economic adviser to the EY ITEM Club, said: “With the growth outlook weak, unemployment high and rising, and policy already restrictive, we think a prolonged hold for bank rate is the most likely outcome.”
Chancellor Rachel Reeves said: “In an uncertain world we have the right economic plan, taking a responsive and responsible approach to supporting working people in the national interest.
“We’re taking £150 off energy bills and providing targeted support for those facing higher heating oil costs.
“We’re also acting to protect people from unfair price rises if they occur, bring down food prices at the till, and cut red tape to boost long-term energy security – building a stronger, more secure economy.”
Prices of gold and silver witnessed a significant increase in both the global market and Pakistan’s local bullion market, reflecting continued volatility in precious metals.
According to market data, the price of one tola of gold surged by Rs15,200, reaching Rs479,262, while the rate for 10 grams of gold increased by Rs13,031 to settle at Rs410,889.
In the international market, gold prices also recorded a substantial rise, climbing by $152 to reach $4,565 per ounce, indicating strong global demand and investor interest in safe-haven assets.
Meanwhile, silver prices followed a similar upward trend, with one tola increasing by Rs370 to reach Rs7,824 in the local market.
Market analysts attribute the rise in prices to ongoing global economic uncertainties and increased demand for precious metals as a hedge against inflation and currency fluctuations.
The speed of price rises in the UK has stayed the same, according to data which was collected before the US-Israel war with Iran began.
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