Budget reinforces long-term biopharma growth despite no new tax incentives: EY

The Union Budget 2026 has signalled a sustained policy push for India's pharmaceutical and life sciences sector, with a strong emphasis on biopharma innovation, research infrastructure and affordability, even as direct tax incentives remain unchanged, noted EY's Budget sectoral alert.

The Union Budget 2026 has signalled a sustained policy push for India's pharmaceutical and life sciences sector, with a strong emphasis on biopharma innovation, research infrastructure and affordability, even as direct tax incentives remain unchanged, noted EY's Budget sectoral alert. According to EY's Budget 2026 pharma alert, this year's Budget offers a steady direction for the pharma and life sciences sector, with a clear emphasis on building biopharma capabilities, underlining the government's intent to strengthen India's position as a global biopharma hub

A key highlight is the announcement of the Rs 10,000 crore Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation) outlay, alongside the expansion of the National Institutes of Pharmaceutical Education and Research (NIPERs) and the creation of a large clinical trial network and strengthening the Central Drugs Standard Control Organisation (CDSCO). EY noted that these measures reflect the government's intent to strengthen innovation, enhance research infrastructure and gradually reduce import dependence. The report also pointed to customs duty relief as a positive for patient access, stating that "the continuation of Customs Duty relief for cancer and rare-disease treatment supports patient affordability and aligns with the broader objective of improving access to specialized treatments"

At the same time, the industry's long-standing demand for enhanced tax support for innovation remains unaddressed. EY flagged that "a key omission is the absence of any direct tax incentives for R&D in the form of an enhanced deduction," an issue the sector has repeatedly raised with policymakers Despite this, EY maintained an optimistic medium-term outlook, noting that "the policy measures announced provide a positive foundation for advancing India's position in biopharma and healthcare services," supported by parallel initiatives in AYUSH, medical tourism, allied health skilling and mental healthcare infrastructure

Overall, the Budget is seen as reinforcing long-term capacity building and innovation in the pharma sector, with execution and future tax reforms expected to determine the pace of growth. (ANI)

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