Union Budget 2026: What’s in Biopharma SHAKTI scheme announced by FM Sitharaman

The scheme will also scale up the production of biosimilar medications, which are highly similar but not identical versions of biological drugs.

INFRASTRUCTURAL SUPPORT:

Under the scheme, three new National Institutes of Pharmaceutical Education and Research (NIPER) will be launched, and seven existing institutes will be upgraded as part of its Biopharma-focused network.

The scheme will also create a network of over 1,000 accredited sites for clinical trials in India.

The FM also proposed strengthening the Central Drugs Standard Control Organisation to meet global standards and approval timeframes through a dedicated scientific review cadre and specialists.

Why was Biopharma SHAKTI announced?

The scheme acknowledged India’s shifting disease burden from communicable to non-communicable diseases (NCDs) like diabetes, cancer, and autoimmune disorders. According to a United Nations report, NCDs are responsible for 63% of all deaths in India, with cardiovascular diseases at 27% of overall mortality, followed by chronic respiratory diseases (11%), cancers (9%), and diabetes (3%).

Most significantly, the scheme is timely given US President Donald Trump’s announcement of 100% tariffs on imports of branded and patented pharmaceutical drugs in October 2025. This followed his administration’s Section 232 investigation into whether pharma imports endanger national security. India has largely staved off the risk, given that the tariffs exclude generic drugs and those companies that have a manufacturing base in the US. Indian pharma exports are primarily 90% generics, with about 50% alone in the US, and many Indian companies have drug manufacturing facilities in the US.

Faced with tariff uncertainty, India’s pharma exports to the US dipped by 23.7 by -23.7 per cent YoY in October 2025, increasing the next month to 9.8 per cent YoY.

With this tariff rate set to climb to up to 250%, the push into biologicals and biosimilars would help India protect its pharma sector against drug-specific tariffs, and also shift its status from the “pharmacy of the world” to becoming a hub for complex biosimilar and biological medicine.

How India’s pharma sector has fared

India’s pharmaceutical exports include AYUSH and herbal products, surgicals, bulk drugs, drug intermediaries, drug formulations and biologicals.

India’s pharmaceutical sector is the third-largest in the world, meeting about 20% of global demand for generic medicine (identical copies of biologicals), and exported to 191 countries in FY ‘25. Over 50 per cent of these exports are directed to highly regulated markets such as the US and Europe.

India is a global leader in low-cost vaccine supply, supplying the majority of the world’s diphtheria, tetanus and pertussis (DPT), Bacillus Calmette-Guerin (BCG) and measles vaccines.

In FY25, the sector’s annual turnover reached ₹4.72 lakh crore, with exports growing at a CAGR of 7 per cent over the last decade (FY15 to FY 25).

India’s medical devices sector has also become globally competitive, exporting to 187 countries in FY25. Among its exports are high-end equipment, including MRI and CT scanners, linear accelerators, cardiac stents, and ventilators, marking an expansion into sophisticated imaging and life-support technologies.

Other health-related initiatives announced in the Budget

Infrastructural upgradation: The Budget announced that existing institutions for Allied Health Professionals (AHPs) will be upgraded, while new AHP Institutions will be established in the private and public sectors. This will cover 10 selected disciplines, including optometry, radiology, anesthesia, OT Technology, Applied Psychology and Behavioural Health, adding one lakh AHPs over the next five years.

Focus on geriatric care: A strong CARE ecosystem, focused on geriatric and allied care is envisioned, with an aim to train 1.5 lakh caregivers over the next year. A range of programmes aligned with the National Skills Qualification Framework would be prepared to train multi-skilled caregivers combining core care and allied skills.

Medical tourism hubs: A scheme will be announced in partnership with the private sector to develop five Regional Medical Hubs and support states in this endeavour. According to the Finance Minister, these hubs will serve as integrated healthcare complexes that combine medical, educational and research facilities. The hubs would also be home to AYUSH centres and Medical Value Tourism Facilitation Centres. This endeavour is expected to generate employment in the health sector, for both doctors and AHPS.

An eye on AYUSH: Emphasising the popularity of yoga and Ayurveda in the present day, the Finance Minister announced plans to establish three new All India Institutes of Ayurveda, upgrade AYUSH pharmacies and Drug Testing Labs for higher standards of certification ecosystem. The Budget also outlined a plan to upgrade the WHO Global Traditional Medicine Centre in Jamnagar to bolster evidence-based research, training and awareness for traditional medicine.

Boost to mental healthcare, access: The Budget announced that a second National Institute of Mental Health and Neurosciences will be established in North India, and National Mental Health Institutes in Ranchi and Tezpur will be upgraded. The Budget also proposes a 50% expansion in the capacities in district hospitals by establishing emergency and trauma care centres.