Trade tailwinds, Budget bring cheer but…

The signing of the India-EU trade deal, a favourable Union Budget 2026-27, followed by the surprise announcement of the slashing of US tariffs and a long awaited India-US trade deal. India’s healthcare sector, and the medtech segment in particular, had much to cheer about in the last fortnight. But the gap between policy intent and on-ground impact remains the key risk. India-based medtech leaders have largely praised both trade deals, hoping that medical device exports to the EU and now the US, two of the largest markets, will pick up. MSME MedTech companies are especially hopeful that they will regain competitive advantage in exports, especially as they compete with countries like China, in margin-thin medical disposables category like syringes, needles, etc.

On the import side, as US exports of high end MedTech equipment become more affordable due to custom duty cuts, such equipment will penetrate beyond the metros. The hope is that as domestic manufacture of MedTech equipment picks up, thanks to the enhanced allocation of Rs 40,000 crore for electronics component manufacturing in the Union Budget 2026-27, spurring domestic value addition in medical electronics and diagnostics, prices will drop further, and tier 2/3/4 towns will be a ready marketplace.

The headline investment figures from Union Budget 2026-27 are indeed impressive: healthcare allocation increased by 6.57 per cent over last year’s Budget all ocation, the MoHFW gets Rs 1,06,530 crore, a nearly 10 per cent increase in allocation over the Revised Estimate of the previous year.

Industry reactions have predictably been favourable of the state policy intent but many leaders call for speedy implementation and the need for process reforms (https://www.expresshealthcare.in/news/union-budget-2026-puts-healthcare-innovation-and-access-in-focus/452589/)

In addition, the development of five regional medical tourism hubs, creation of three new All India Institutes of Ayurveda , upgradation of AYUSH pharmacies and drug-testing labs, enhancing the WHO Global Traditional Medicine Centre in Jamnagar, will create more job opportunities as well as enable India to bag a larger piece of the global medical value travel.

However concerns have been raised that such measures will benefit the corporate health sector, enabling them to expand their medical tourism revenue. 

Probably the most impactful feature of this budget, if implemented right, is the focus on ramping up India’s allied and healthcare professionals’ talent pool. Waking up to the increasing healthcare burden of a rapidly aging population, combined with rising incidence of non-communicable diseases, the Government has proposed a phased plan outlay of Rs 980 crore over three years for the expansion and strengthening of allied and healthcare professional institutes in 10 disciplines, to train over one lakh paramedical professionals over the next five years. Additionally, a focused programme will train 1.5 lakh geriatric caregivers.

Once again, similar to the integrated medical tourism announcements, these measures will be through public-private participation. The PIB release also mentions that these measures will serve the ‘increasing global demand for skilled healthcare professionals.’ This begs the question: are we intentionally training medical professionals and encouraging them to look outside India for jobs and careers? Hopefully, the government and private partners of these ventures will not just train but retain this talent pool in India, until the country’s needs are fulfilled.

Other announcements that will directly impact patients is the intent to upgrade the health treatment and research ecosystem. The North will get its own NIMHANS, while the neglected North East will get upgraded facilities at Ranchi and Tezpur.

The budget also continues its cancer treatment focus, proposing full exemption of basic customs duty on 17 life-saving drugs and medicines. Seven additional rare diseases have also been included for exemption of import duties on personal imports of drugs, medicines, and food for special medical purposes. It’s hoped that these measures will help patients and caregivers cope with reduced costs of long term cancer and rare disease care.

Health insurers have expressed the hope that as more healthcare allied professionals are trained and ease the current caregiver gaps, healthcare outcomes will improve due to faster and earlier diagnosis. In time, more efficient hospital care will result in shorter hospital stays, thereby making insurance coverage more sustainable.

As healthcare spending rises and India positions itself as both a manufacturing and medical tourism hub, the real test will be whether these measures strengthen India’s health system—not just its balance sheet.

But all three trigger points – the India-EU trade deal, the Union Budget 2026-27 and the India-US trade deal – depend on execution and implementation. And with the trade deals, the devil lies in the details, which will only be clear as the governments involved reveal more in the days to come. Thus, it’s still a wait and watch game for industry leaders. Will reality live up to expectations?

VIVEKA ROYCHOWDHURY, Editor
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