Budget Expectations for the Life Sciences Sector in India

The life sciences sector in India, has shown remarkable resilience and growth over the past years. As the 2024 financial budget announcement approaches, the sector anticipates further support and reforms to sustain its growth trajectory and enhance its global competitiveness. The following are the key areas where the sector is looking for budgetary interventions:

 

• R&D Incentives: Specific investments to ensure competitiveness for new chemical entities and/ or new biological entities (NBEs) and also explore providing a 200% weighted deduction for companies undertaking such R&D
• Medical devices manufacturing: To encourage innovation and investment in manufacturing, introduce concessional tax regime and Profit Linked Incentives for medical device manufacturing
• Customs duty exemptions: The sector expects a continuation or expansion of exemptions on customs duty for the import of pharmaceutical goods and life-saving drugs. The rollback of the health cess on critical medical devices is also sought to alleviate the financial burden on consumers. Lowering customs duty on imported diagnostic equipment and adjusting high GST rates on lab supplies will foster R&D investments.
• Healthcare infrastructure: To ensure state of the art infrastructure, introduce PLI for investment in healthcare infrastructure. The Government should also aim to ensure allocation of appropriate funds to this area. Addressing the shortage of healthcare workers through better training and working conditions is also essential.
• Interactions with healthcare professionals (‘HCPs’): There are several regulations which mention about interactions of companies with HCPs. Relevant clarifications should ideally be brought to provide standard policy which can be common practice across the industry and easy to adhere to and monitor.

The life sciences sector remains optimistic that the upcoming budget will address these expectations, further strengthening India's position as a research and innovation hub and supporting the 'Atmanirbhar Bharat' vision, thereby enabling to touch USD130 billion in value by the end of 2030 and USD 450 billion market by 2047.