Industry seeks tax rationalisation, diagnostics PLI, startup push to scale access
MUMBAI, Jan 18 (The CONNECT) – India’s healthcare and diagnostics sector is pinning its hopes on Union Budget 2026 to sustain the government’s focus on healthcare infrastructure as the country’s medical needs continue to expand.
Rahul Guha, Managing Director and Chief Executive Officer of API Holdings, said the sector remains optimistic that policy continuity will enable healthcare providers to serve a larger population more effectively.
Guha said the government’s sustained emphasis on digital healthcare and startup-led growth has played a critical role in widening access to healthcare services across India. He added that the upcoming budget presents an opportunity to accelerate this momentum and deepen the impact of technology-driven healthcare delivery.
One of the key expectations from the sector is the correction of the GST rate differential, where medicines attract a five per cent tax while input services are taxed at 18 per cent. Guha said addressing this mismatch would significantly improve working capital efficiency for healthcare companies, allowing them to maintain affordability while scaling services to reach more Indians.
He also flagged rising compliance costs as companies adapt to evolving labour guidelines, noting that targeted tax or GST interventions could help ensure these costs are not passed on to end consumers. Preserving affordability, he said, remains a shared priority for both industry and government.
Guha said the healthcare ecosystem is encouraged by the government’s continued commitment to startups and innovation. Further streamlining ease-of-doing-business norms, he added, would empower digital health platforms to innovate faster and serve millions more citizens.
From Thyrocare’s perspective, India’s diagnostics sector has recorded strong growth in recent years, supported by progressive policy measures. The company said the forthcoming budget offers an opportunity to strengthen this momentum through steps that promote preventive healthcare and improve operational efficiency.
Aligning employee health testing requirements with labour guidelines could emerge as a significant boost for preventive healthcare, benefiting both employers and employees while contributing to a healthier workforce. Thyrocare also called for streamlined compliance frameworks across entities to enhance efficiency and allow diagnostic players to focus more on innovation and service quality.
The diagnostics major further urged the extension of Production Linked Incentive schemes to domestic manufacturing of diagnostic essentials such as reagents, needles and vials. Such support, it said, would reinforce the ‘Make in India’ vision, reduce import dependence and help build a more self-reliant healthcare ecosystem.
