With the Union Budget 2026–27 just weeks away, India’s healthcare sector has presented a unified and detailed set of demands to the Finance Ministry, calling for decisive fiscal and policy support to accelerate digital health adoption, deepen domestic manufacturing and strengthen research & development capabilities.

Leading industry associations NATHEALTH, FICCI Health Services Committee, ASSOCHAM Healthcare Council, CII Healthcare, and the Association of Indian Medical Device Industry (AiMeD) have jointly submitted pre-budget memoranda urging the government to recognise healthcare as a strategic sector requiring special fiscal attention in the post-pandemic era.

The most prominent ask is the creation of a dedicated Digital Health Acceleration Fund with an initial outlay of ₹15,000–20,000 crore over the next three financial years. Industry leaders argue that this corpus would enable large-scale deployment of Ayushman Bharat Digital Mission (ABDM) components in tier-2 and tier-3 cities, strengthen rural telemedicine infrastructure, subsidise digital health adoption for small and mid-sized hospitals, and support the development of vernacular-language health AI models.

Another major recommendation is the rationalisation of GST rates on medical devices and healthtech products. The sector has proposed reducing or eliminating GST on essential diagnostics (point-of-care devices, rapid test kits), critical care equipment, surgical consumables, and digital health hardware (remote monitoring wearables, telehealth carts, AI-enabled diagnostic tools). AiMeD, in particular, has reiterated its long-standing demand to raise import tariffs on non-critical devices to 10–15% while simultaneously lowering GST on domestically manufactured products to create a stronger incentive for localisation.

The industry has also sought enhanced R&D tax incentives and an extension of the Production Linked Incentive (PLI) scheme for medical devices beyond its current tenure. Stakeholders want higher weighted deductions (up to 200%) for clinical research, medtech innovation and biotechnology R&D, along with faster regulatory approvals for digital health products under the Central Drugs Standard Control Organisation (CDSCO) and the Medical Device Rules.

Public-private partnership models have been highlighted as a way to scale digital health faster. NATHEALTH and FICCI have proposed co-investment vehicles for setting up regional digital health hubs, shared diagnostic centres and AI training datasets for Indian disease profiles.

The recommendations arrive at a time when healthcare inflation continues to outpace general inflation, out-of-pocket expenditure remains high despite Ayushman Bharat coverage, and India’s medical device import dependence still hovers around 70–80% for high-technology products. Industry leaders argue that a forward-looking budget can position India as a global medtech and digital health leader while simultaneously improving affordability and access for its own citizens.

The government is expected to consider these inputs seriously in the final stages of budget preparation. The Union Budget 2026–27 will be presented in February 2026.