Budget 2026: Sitharaman proposes ₹10,000 crore investment in biopharma over next 5 years

The Union Budget 2026-27 has proposed a biopharma strategy to advance healthcare through knowledge, technology and innovation, with an outlay of ₹10,000 crore over the next five years to develop India as a global biopharma manufacturing hub.

Union Budget 2026 LIVE

“Biopharma SHAKTI will build the ecosystem for domestic production of biologics and biosimilars,” Finance Minister Nirmala Sitharaman said in her Budget speech on Sunday, February 1, 2026. Biopharma is part of seven strategic and frontier sectors identified by the government for expansion.

Watch | FM Sitharaman initiates ₹10,000 cr spend on biopharma sector

The decision to facilitate innovation and accelerate production of biopharmaceuticals comes against a backdrop where India’s disease burden is shifting towards non-communicable diseases such as diabetes, cancer and autoimmune disorders. “Biological medicines are the key to longevity and quality of life at affordable costs,” the Minister of Finance said.

The establishment of three new National Institutes of Pharmaceutical Education and Research (NIPER) and upgrading of seven existing facilities and creating a network of over 1,000 accredited Indian clinical research sites form part of the biopharma strategy.

“We propose to strengthen the Central Drug Standard Control Organization through a dedicated scientific review staff and experts to meet global standards and approval timeframes,” Ms. Sitharaman said.

Biopharmaceuticals are complex molecules and differ from other drugs in that they are not produced through chemical synthesis. According to the U.S. Food and Drug Administration, biologics are generally large, complex molecules produced through biotechnology in a living system such as a microorganism, plant cell or animal cell, and are often more difficult to characterize than small-molecule drugs.

Pharmaceutical industry in the budget

Pharmaceutical industry leaders welcomed the Budget announcement. Dr. Reddy Laboratories chairman Satish Reddy said the Rs 10,000-crore program will be a key enabler in India’s journey from volume to value leadership and help the country transform from a global supplier of quality medicines to a global innovator. These initiatives, along with expanding the national clinical trials network and strengthening the CDSCO with specialized scientific review and globally aligned timelines, will enhance India’s capacity to develop complex, high-value treatments, he said.

Mr. Reddy said the decision on new NIPERs and upgrading of existing facilities will create the talent pipeline required for innovation-led growth.

“The budget’s focus on healthcare and biopharmaceuticals is a welcome step… We also appreciate the government’s emphasis on strengthening CDSCO and developing a more predictable, science-driven regulatory framework. Aligning regulatory processes with global standards and expanding India’s clinical research capabilities will help bring medical innovations to India faster,” said Winselow Tucker, Chairman and Managing Director, Eli Lilly and Company (India).

Anuj Sethi, Senior Director, Crisil Ratings, said the Indian pharmaceutical industry has long been a leader in low-cost, small molecule generic drugs. The Biopharma Shakti initiative will enable domestic companies to move into more complex products such as biosimilars.

Support is crucial because biosimilars require significant investments in clinical studies and capital. The initiative will help reduce gestation periods and regulatory hurdles for US FDA and EMA approvals and enable India to capitalize on the $100-110 billion opportunity arising from patent expirations for blockbuster biologics in the next decade, he said.