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Experts have recommended eliminating inverted duty structure, incentives for research, health-tech startups among others in Union Budget 2026.
The radical GST reform in 2025 which reduced taxes on diagnostic kits and medical devices to a mere 5% charge was a historic achievement for health equity. It is now imperative for the coming budget to correct the inverted duty structure, which has been pressurising domestic manufacturers. There is scope to review and harmonise certain GST rates, like Radiation Protection Apparels being charged at 18%. The same should be brought under 5% GST rate for consistency. I strongly recommend aligning the GST bracket to eliminate the inverted duty structure. Such alignment would reduce operational inefficiencies, streamline compliance, and ensure that the cost savings are passed on to consumers, says Dr G S K Velu, chairman and managing director of Trivitron Healthcare, chairman & managing director, Maxivision Eye Hospitals, and chairman and managing director, Neuberg Diagnostics.
Dr Velu adds that as we approach the Union Budget 2026–27, India stands at a crossroad where execution must take centre stage to manage our nation's soaring non-communicable disease (NCD) burden, which accounts for a mortality rate of ~65%. We urge the government to fulfil the long-standing industry recommendation of raising public health expenditure to over 2.5% of GDP to build a truly resilient and future-ready ecosystem. We must now ensure self-sufficiency and reduce our massive import dependency of 80% on imported devices by adopting 'Buy India' initiatives or boosts in research incentives like the PRIP scheme, to migrate from volume in manufacturing to depth in R&D.”
Dr Velu further explains that in order to make affordable healthcare care accessible across Tier 2, Tier 3, and rural India, the budget should incentivise setting up of diagnostic hubs and comprehensive eye hospitals in these underserved regions through priority sector lending and enhanced Gap Viability Funding.
Sharing his views, Ajay Kandhari, managing director, DSS Imagetech Pvt. Ltd., a market leader in molecular diagnostics, says, "Operating at the intersection of biotechnology, diagnostics, and applied biosciences, we see Union Budget 2026 as a decisive opportunity to convert intent into scalable impact. Union Budget 2025 laid a constructive foundation by reinforcing India’s long-term BioE3 vision of Biotechnology for Economy, Employment and Environment. Budget 2026 must now complete the cycle by strengthening last-mile adoption and market deployment, where distributor-led science translation plays a critical role.”
Sharing his views on GST harmonisation, Kandhari adds that the progress made in GST harmonisation for biosolutions in 2025 was encouraging. We hope Budget 2026 extends this simplification across the entire operating framework by covering licensing, registrations, and access to affordable working capital to unlock scale and speed.
Talking about budgetary allocation, Dr Jothi Neeraja, founder & managing director, People Tree Hospitals and Maarga Mind Care, said that in the Union Budget 2025–26, overall healthcare received a significantly higher allocation of approximately 10% as compared to the previous year, reflecting the government’s commitment to strengthening the health sector. Within this, direct mental health spending under the ministry of health & family welfare was around Rs. 1,004 crore, making it just 1 % of the health budget, with major support for institutions such as NIMHANS, Bengaluru, the Lokpriya Gopinath Bordoloi Regional Institute of Mental Health, Tezpur, and the National Tele-Mental Health Programme.
While these allocations represent an important step and demonstrate growing recognition of mental health, the proportion remains small relative to the overall scale of need. For the upcoming Union Budget 2026, there is a need for greater and more sustained investment in mental health services. This will help raise awareness and promote the importance of mental health in community programmes through early intervention, workforce training, and stronger healthcare infrastructure across urban and rural India.
Talking about artificial intelligence (AI) role in healthcare, Dr Sajeev Nair, founder & chairman, Vieroots, a health-tech company, says, "We hope to see stronger policy and fiscal support for AI-driven health platforms, digital diagnostics, and personalised wellness solutions that leverage genomics, biomarker intelligence, and real-time health data. Incentives for health-tech startups working at the intersection of AI, data science, and preventive care can significantly improve early risk detection and reduce long-term healthcare costs. Additionally, integrating wearables, remote monitoring, and digital therapeutics into insurance frameworks and public–private partnerships will be critical to driving large-scale adoption. A focused push on data infrastructure, ethical AI frameworks, and innovation-led healthcare can help India build a scalable, accessible wellness ecosystem that empowers individuals to take charge of their health before illness sets in."
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