Union Budget 2025: A Mixed Bag for Healthcare and Pharma
By Arunima Rajan
The government has allocated ₹99,858.56 crore to the Union Health Ministry in the 2025-26 Budget — introducing duty exemptions on 36 life-saving cancer drugs, extending Ayushman Bharat coverage to gig workers, and outlining a roadmap for 75,000 new medical seats over five years. Here's what the industry has to say.
Building a Future-Ready Healthcare System
Dr Azad Moopen, Founder and Chairman of Aster DM Healthcare, views the Budget as a decisive step towards strengthening India’s healthcare system. He calls the planned addition of 75,000 new medical education seats over the next five years as a crucial measure to address the persistent shortage of healthcare professionals, particularly in underserved areas. Equally significant is the proposal to establish 200 cancer daycare centres in district hospitals, intended to decentralise cancer treatment and enable timely interventions, improving patient outcomes.
The Budget exempts basic customs duties on 36 life-saving drugs including those used in cancer, rare and chronic diseases. This, Moopen notes, will ease the financial burdens on patients. The inclusion of e-Shram healthcare insurance for gig workers and increased investment in medical research and genetic studies accentuate what he describes as a forward-thinking approach to public health. Moopen also points to the government’s efforts to boost medical tourism through streamlined visa policies under the Heal in India initiative, which will make critical treatments more affordable and position India as a global healthcare hub.
Strengthening the Healthcare Workforce and Boosting Medical Tourism
Pavan Choudary, Chairman of the Medical Technology Association of India (MTaI), welcomes the initiatives aimed at augmenting the healthcare workforce and encouraging medical tourism. He emphasises the establishment of five major skill development centres as a significant step towards meeting India’s ambitious target of exporting 300,000 healthcare workers annually. While he finds the Budget broadly well-aligned with current priorities, Choudary hopes the government will soon reduce customs duties on imported medical devices lacking domestic alternatives at present.
Expanding Cancer Care and Medical Education
Dr Tarang Gianchandani, CEO of Sir H.N. Reliance Foundation Hospital, Mumbai, welcomes the Budget’s focus on cancer care and medical education. Gianchandani also underscores the importance of expanding medical education. With 10,000 additional seats to be added this year and 75,000 over the next five years, she believes the Budget will help bridge the healthcare workforce gap. In her view, these measures are essential for making quality healthcare a fundamental right for all.
A Boost for Healthcare, but GST Relief is Overlooked
Dr Harsh Mahajan, Chair of the FICCI Health Services Committee and Founder of Mahajan Imaging & Labs, welcomes the revised MSME limits and income tax exemption up to ₹12 lakh, which he deems crucial for small healthcare businesses. He praises initiatives such as the rural healthcare expansion under the BharatNet project, designed to improve access to essential medical services.
However, Mahajan notes that the absence of GST relief on medical devices is “a missed opportunity for immediate relief, especially in diagnostics”.
Fillip to Healthcare : Strengthening the Sector and Promoting Medical Tourism
Dr GSK Velu, Chairman and MD of Neuberg Diagnostics, Trivitron Healthcare and Maxivision Eye Hospitals, concurs that the Budget is a major step toward strengthening the healthcare sector. Velu also supports the Heal in India initiative, which aims to streamline medical visas and foster private-sector collaboration to boost the country’s medical tourism.
Healthcare Budget Lacks Key Reforms
Not all industry voices are entirely in favour. Dr VP Chandrasekaran, COO of SRM Global Hospitals, acknowledges the positives, but criticises the Budget for falling short on key issues. He advocates a full tax exemption on medical products and the removal of import taxes. While the expansion of the PM Insurance Scheme is commendable, the claim amount is insufficient, rendering the scheme unviable for hospitals, he says. He supports the increase in medical seats and views medical tourism as beneficial, but stresses that investment in domestic healthcare too is crucial. Disappointed that healthcare ranks only sixth in priority, Chandrasekaran argues that inadequate funding, low insurance claims and high taxation hinder real progress. “A long-term strategy is essential for meaningful healthcare reform,” he insists.
Expanding Cancer Care Beyond Metros
Dhruv Sukhrani, Partner at Bain & Company and Head of Healthcare Practice in India, sees the establishment of cancer centres in district hospitals and the concessional duties on cancer drugs as critical steps to improve access and affordability, especially in tier 2 and tier 3 cities. Sukhrani highlights the need for improved early detection, noting that India’s current rate of approximately 20 per cent lags behind the 30-plus per cent seen in more advanced economies.
Driving Innovation Amid Policy Delays
Sanjiv Navangul, MD and CEO of Bharat Serums and Vaccines Limited, sees the Budget provisions as a reaffirmation of India’s commitment to healthcare innovation, accessibility and women’s empowerment. He stresses the importance of strengthening research and development (R&D) and fostering industry collaboration. However, Navangul expresses concern over delays in the rollout of the PRIP schemes. He welcomes the focus on nutrition and maternal health, emphasising that sustained policy and infrastructure support will be key to ensuring long-term, equitable transformation.
The Need for Greater R&D Investment
Lovekesh Phasu, Group Chief Operating Officer of Sakra World Hospital, Bengaluru, lauds the Budget’s focus on preventive healthcare and investment in medical infrastructure. However, “while the budget lays a solid foundation, sustained investments in cutting-edge research are crucial to making India a global healthcare leader,” he observes.
Innovation and Startup Ecosystem
Satish Kannan, Co-founder and CEO of MediBuddy, views the Budget allotments as a progressive step for both healthcare and the startup ecosystem. He highlights the inclusion of healthcare coverage for gig workers under the PM Jan Arogya Yojana as a key measure to improve treatment affordability. The launch of AI Centres of Excellence, higher FDI limits in the insurance sector and a significant expansion of the Fund of Funds for startups will empower innovation and enhance digital health services, he says.
Concerns Over the Medical Devices Sector
Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD), acknowledges the Budget’s broad economic and policy direction but is disappointed with the lack of targeted incentives for the medical devices sector. Although the Budget introduces beneficial measures such as the Manufacturing Mission, MSME and startup support, Nath notes that it falls short in promoting domestic medical device manufacturing. With the sector heavily reliant on imports, Nath warns that without concrete measures, India’s medical devices industry will struggle to reduce import dependence and build a stronger domestic base.
A Mixed Outcome
The Union Budget 2025-26 injects a significant dose of resources into healthcare, aiming to boost medical education, cancer care and innovation. While it is largely applauded, experts point out critical omissions, such as missing tax exemptions for medical products, insufficient support for research and development and a lack of clear policies for medical devices. In a sector so vital to India’s future, there is an urgent need for a comprehensive, long-term strategy that truly benefits every Indian.
As many as 350 million Indians — one in four — still do not have basic health coverage, says the National Council of Applied Economic Research. That’s multitudes left out, vulnerable to crushing medical costs. The Budget allocates funds, but without a clear plan to improve access and affordability, it will not change much.