Budget 2026 Boosts Healthcare: Duty Waivers on Cancer & Rare Disease Drugs

The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, has delivered a mixed reaction in the stock market, with significant impacts across sectors. Budget allocation changes, policy reforms, and tax measures impact various industries. Here’s a detailed look at how the budget has influenced the Healthcare sector: 

Budget Allocation Snapshot

This table gives you a quick comparison of government spending relevant to the sector across the previous financial year and the current budget year: 

Healthcare Sector Budget Allocation (FY 2026-27)

In the Union Budget 2026-27, the Indian government has continued to strongly back the healthcare sector, with a cap on healthcare expenditure for FY27 of ₹16,500 crores, a moderate increase from the previous year’s allocation. 

Key Announcements in the Healthcare Sector

• Biopharma Shakti: ₹10,000 crore to boost domestic pharma manufacturing and biologics.
• Medical Infrastructure: 5 regional medical hubs and hospital upgrades.
• Digital Health & AI: Multilingual AI platforms, telemedicine, and e-health services.
• Traditional Medicine: Expansion of Ayurveda, Yoga, and AYUSH institutes. 
• Customs Duty Relief: 17 cancer drugs and medicines for rare diseases made cheaper. 

Comparison with the Previous Year

Compared to last year, the Union Budget 2026 signals a strategic shift in the policy approach to the Healthcare and digital Healthcare sectors. While FY26 focused largely on capacity expansion, incentives, and demand support through various healthcare adoption, the FY27 allocation highlights the government’s intent to build long-term efficiency, competitiveness, and sustainability in the Healthcare sector. Healthcare highlights the government’s intent to boost India’s digital health and workforce development to strengthen India’s healthcare ecosystems. 

Capital Expenditure & Multiplier Impact 

A significant capex outlay has been proposed in the Union Budget 2026, expected to create a strong multiplier effect across all industries. Healthcare is expected to boost domestic pharmaceutical and biotech capabilities through initiatives like Biopharma Shakti. Improve accessibility and affordability of critical medicines, including cancer and rare disease drugs.   

Impact on Industry & Market Sentiment

Market players have received the Budget announcements in the healthcare sector positively. Experts believe the increased allocation and announced changes may help agricultural players achieve greater revenue visibility and margins in the medium term.

The sectors expected to benefit the most from the policy thrust include railways. Healthcare will be seen as a positive impact on healthcare companies’ long-term growth opportunities. The increased spending is also expected to boost allied industries and strengthen revenue prospects across the Healthcare ecosystem. 

Key Stocks Will Perform Well in the Healthcare Sector 

The Budget 2026’s strong focus on Healthcare is expected to boost domestic pharmaceutical and biotech capabilities through initiatives like Biopharma Shakti. Improve accessibility and affordability of critical medicines, including cancer and rare disease drugs.   

Pharmaceutical & Biopharma Companies

• Dr Reddy’s Laboratories
• Cipla
• Biocon

Hospitals & Healthcare Services

• Apollo Hospitals Enterprise Ltd
• Max Healthcare
• Fortis Healthcare

Diagnostics & Medical Devices

• Strides Pharma Science
• Transasia Bio-Medicals
• Laurus Labs

Traditional Medicine & Wellness

• Patanjali Ayurved Ltd

Support for Healthcare, Startups & Employment 

The Union Budget 2026 continues Healthcare’s focus on Information Technology (Healthcare) and startups within the Healthcare Sector through targeted investments, tax incentives, and ecosystem support. These measures are expected to generate employment across skilled and semi-skilled categories in the Healthcare supply chain while strengthening the sector’s supply chain and innovation in Healthcare digital adoption.

Focus on National Development: Union Budget 2026

As the government’s initiatives in the Healthcare sector reflect Healthcare’s development prior to this, they include Atmanirbhar Bharat, Make in India, Digital Healthcare India, and Green Growth. The government’s main aim is to efficiently utilise resources and promote sustainable growth to accelerate innovation across all sectors. Overall, the Budget focused on the sectoral growth for national development, while creating employment and strengthening infrastructure. 

Execution Remains the Key on Union Budget 

However, according to experts, the implementation process must be effective. This will ensure that the time taken for the release of funds and the coordination between the central and state governments do not hamper the effectiveness of the announced healthcare initiatives in the Union Budget 2026.

External factors, such as {{Global Economic Trends / CommodHealthcarey Prices / Interest Rates}}, could also affect the sector’s performance in FY27.