Budget 2026: Biopharma to medical tourism, push for healthcare value chain

In Union Budget 2026, FM Nirmala Sitharaman announces ₹10,000 cr Mission Biopharma Shakti, 1,000 clinical trial sites, 10,000 new medical seats, Customs relief on key drugs, and 5 medical tourism hubs

Finance Minister Nirmala Sitharaman’s Union Budget for 2026-27 laid out a broadbased push to strengthen India’s health care and life sciences ecosystem, with measures across biopharma manufacturing, medical education, research institutions, traditional medicine, affordable drugs and medical tourism.

 

At the centre of the health care strategy is a renewed focus on biopharmaceutical manufacturing, as the government seeks to build domestic capabilities in biologics and biosimilars amid India’s rising burden of non-communicable diseases.

 

The Budget announced Mission Biopharma Shakti, a ₹10,000 crore programme spread over five years with the aim of creating an end-to-end ecosystem covering research, talent development, clinical trials and manufacturing. As part of this push, the government will expand pharmaceutical education and research infrastructure by setting up three new National Institutes of Pharmaceutical Education and Research (NIPERs) and upgrading seven existing NIPERs to support advanced research, skilling and closer industry collaboration.

 

 

The Budget also proposed the creation of a nationwide network of 1,000 accredited clinical trial sites, a move intended to accelerate drug development timelines, strengthen regulatory standards and position India as a preferred destination for global clinical research.

 

Alongside manufacturing, Sitharaman placed strong emphasis on expanding medical education capacity to address long-term workforce needs. The government will add 10,000 medical education seats in the coming year as part of a larger plan to add 75,000 seats over five years, while continuing investments in hospital-linked medical colleges and training infrastructure.

 

To improve affordability and access to treatment, the Budget announced significant Customs duty relief on medicines. Basic customs duty has been fully exempted on 36 life-saving drugs used in the treatment of cancer, rare diseases and other chronic conditions, while six additional medicines will attract a concessional duty of 5 per cent. These exemptions and concessional rates will also apply to the bulk drugs used in manufacturing these medicines, reinforcing the government’s push to deepen domestic pharmaceutical and biopharma value chains. The list of duty-free imports has also been expanded to include additional medicines supplied under patient assistance programmes.

 

Traditional medicine and wellness formed another pillar of the health care push, with the Budget outlining steps to strengthen the AYUSH ecosystem, including expansion of AYUSH pharmacies, improved quality control and standardisation, and a larger trained workforce. These measures are aimed at integrating AYUSH more closely with mainstream health care while supporting India’s ambitions to scale up exports of certified traditional medicine products and wellness services.

 

In a move aligned with this broader healthcare vision, Sitharaman announced support for the development of five regional medical tourism hubs in partnership with state governments and the private sector. These hubs will integrate advanced hospital care with allied services, rehabilitation and AYUSH-based therapies, positioning India as a global destination for comprehensive and cost-effective health care. The Budget also emphasised capacity building, easier visa norms and skill development for caregivers and allied health professionals to support the medical tourism push.

 

Taken together, the Budget’s health care proposals signal a shift towards building scale, depth and resilience across the value chain, from education and research to manufacturing, affordability and global outreach, at a time when India’s disease profile is increasingly dominated by chronic and lifestyle-related conditions.

 

In response to the Budget’s health care and biopharma thrust, pharma and health care stocks outperformed broader market in trading on the Budget day. Major hospital names such as Max Healthcare, Apollo Hospitals, Narayana Health, Fortis Healthcare and Aster DM saw their shares rise by up to 4 per cent following announcements around medical tourism and health care expansion. Biopharma-linked optimism also lifted the Nifty Pharma Index, which was reported to be higher in early trade as markets reacted to the ₹10,000 crore biopharma manufacturing push, even as broader benchmarks showed muted or mixed movement.