Industry leaders share their expectations from Budget 2025-26
Experts aim for the budget to include benefits for the Nutraceuticals sector, incentives for CROs and expansion of the PLI scheme to include investments in APIs
Sanjaya Mariwala, Executive Chairman and Managing Director, OmniActive and Health Technologies and President, Association of Herbal and Nutraceutical Manufacturers of India
“As we dream of Viksit Bharat in 2047, it cannot happen without Swasth Bharat. Health is a very significant area of development in India. Despite the progress achieved so far, health expenditure has been a mere 3.37 per cent of GDP trailing the targeted 5 per cent of GDP for universal coverage of health services. The major challenges lie in addressing infrastructural gaps, shortages of medical professionals, and ensuring services are offered at more affordable rates.
Beyond curative solutions, preventive healthcare needs to be at the fore if it is to be sustainable in the long run. The nutraceutical sector is capable of playing an extremely important role in not only bringing down healthcare costs but also impacting overall health outcomes.
However, the common man cannot reap the benefits of nutraceuticals when GST is at 18 per cent. Reducing it to 5-10 per cent will align it with pharmaceuticals and make such preventive solutions more accessible and affordable for consumers.
Additionally, incentivising corporate investment in clinical trials and research will not only encourage innovation but also ensure that products are safe and effective for consumers. Strengthening the credibility and safety of these products is crucial for building public trust.
If the upcoming Union Budget addresses these priorities, it will reinforce India’s healthcare system, improve consumer safety, and position the country as a global leader in preventive health.”
Sanjay Vyas, President and Managing Director, Parexel India
“India’s pharmaceutical and clinical trials industry is experiencing rapid growth, positioning itself as a key global player. As discussions around Phase 1 clinical trials intensify, one key area of focus could be expanding government research grants and financial incentives to include private Contract Research Organisations (CROs). Currently, these grants are limited to academic institutions, but extending support to private CROs will encourage their active involvement in early discovery and clinical research.
Building upon the foundation laid by previous initiatives, the Union Budget 2025 could prioritise targeted incentives for AI in research and development, which will accelerate innovation in drug discovery, clinical trials, and personalised patient care.
Also, continued efforts in the establishment and maintaining a single, unified regulatory authority for biopharmaceuticals to simplify compliance, minimise delays, and enhance the ease of doing business will foster growth and attract greater investment in the sector.”
Vishal Goel, MD, Rx Propellant
“Budget 2025 offers a critical opportunity to position India as a global leader in life sciences, especially given geopolitical shifts and the need to compete with established players like China. To achieve this, the budget must prioritise strategic investments and targeted support. This includes significantly increasing government funding for research and development through measures like extending tax benefits to CROs and R&D firms through modification of 115BAB, reintroducing weighted R&D deductions under 35(2AB), and implementing a 200 per cent deduction on R&D expenditures, alongside streamlined tax appeal processes. Furthermore, investing in shared, high-quality infrastructure within established research ecosystems, elevating NIPERs to IIT standards, and providing direct funding for promising drug candidates are crucial for fostering innovation. Increasing healthcare spending to align with global averages and rationalising customs duties on essential therapies and equipment will further enhance access and affordability.
While Promotion of Research and Innovation in the Pharmaceutical and Medical Technology Sector (PRIP) scheme which encourages established pharma companies to engage in collaborative research with the NIPERs and avail their research infrastructure is a good start, mere financial support and institutional collaboration through NIPERS may not be enough. Other incentives such as creating an ecosystem for protecting and monetising Intellectual Property rights (IPR), partnerships with internationally recognised facilities for clinical trials, are also essential to attract large pharmaceuticals and medical technology companies. These measures, coupled with regulatory streamlining and robust implementation of the National Pharmaceuticals Policy, 2023, are essential for strengthening India’s innovation ecosystem, solidifying its role as the ‘pharmacy of the world,’ and achieving the goal of a $130 billion pharma market by 2030.”
Mridul Dhanuka, Director, Orchid Pharma
“As the pharma sector gears up for the upcoming budget, there are key areas where government support can drive growth and global competitiveness.
Firstly, an expansion of the PLI scheme to include investments in APIs reliant on imported starting materials and critical raw materials would significantly enhance India’s self-reliance in this critical sector.
Secondly, incentivising R&D through success-based fee support can promote research into cost-efficient processes, green manufacturing, and innovative drug development, which are essential for long-term sustainability.
Simplifying compliance through a single-window reporting mechanism would streamline operations for manufacturers, further enhancing ease of doing business.
Investment in pharma parks with centralised utilities like power, water, steam, and ETP services can substantially reduce project costs, as these account for up to 60 per cent of setup investments.
Tax reforms, including lower corporate income tax rates, would make Indian manufacturers more competitive globally and encourage further investments.
Lastly, greater export support, particularly for MSMEs entering regulated markets, can be a game-changer. Reimbursement of USFDA and other regulatory inspection fees, conditional on successful inspections and achieving export thresholds, would encourage more players to establish world-class facilities, boosting exports and strengthening India’s presence in global markets.”
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