With the Indian government offering constant support to the growth of the pharma sector, the budget for 2025 is one that a lot of experts have major expectations. However, even with the progress the sector has made and the strong government backing, the industry does face certain challenges like limited R&D investments and the importance of better testing facilities etc.
With this in mind, here is a look at what the Union Budget 2025 had in store for the Pharma sector.
Introduction
At one point India’s pharma sector used to produce a mere handful of affordable generic medicines. However, today, the country’s pharma sector has become a global powerhouse where the manufacturing of drugs and vaccines areis concerned. India is now responsible for supplying medicines to more than 200 countries. The country helps globally meet half the world’s pharma needs, 40% of the US’s generic drug demand and 25% of the United Kingdom’s medicine requirement.
When it comes to the rug production volume, India is ranked 3rd in the world while it stands at number 14 in terms of medicine value. India produces more than 60,000 drug brands spanning over 60 therapeutic areas. To add to this, the country also manufactures more than 500 active pharmaceutical ingredients (APIs).
All of this combined makes the Union Budget 2025 even more crucial for the growth of the sector as a whole.
Key Announcements for the Pharma Sector
With the growth of the pharma sector in mind, some of the announcements that the government made during the Union Budget 2025 under FM Nirmala Sitharaman are listed below.
Addition of 36 life-saving drugs exempt from customs duty for cancer patients and those suffering from rare diseases.
6 life savings medicines with a concessional customs duty of 5%
Bulk drugs used to manufacture the above-mentioned medicines will be fully exempt from concessional duty.
Impact Analysis of Budget 2025 on the Pharma Sector
With the initiatives and the changes in tax policies for the sector some of the potential impacts they will have are listed below:
Improved accessibility to crucial life-saving drugs as they become more affordable.
Easier manufacturing of these medicines with the bulk drugs that help manufacture these medicines becoming exempt from concessional duty.
Comparison with Budget 2024 Provisions
Some of the main highlights of the 2024 budget consisted of:
Bettering provisions for R&D.
Elimination of customs duties on certain cancer medications
Reduction of Basic Customs Duty (BCD) on particular lifesaving drugs, medicinal products and medical equipment
Elimination of the angel tax to encourage the pharmaceutical start-up ecosystem
Future Outlook for the Pharma Sector Post-Budget 2025
The main theme of the Union Budget 2025 concerning the pharma sector lies in the need to improve the accessibility of drugs to the entirety of the population. This has been done by exempting 36 life-saving drugs from customs duty and 6 life-saving medicines with a concessional customs duty of 5%.
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