India’s potential to become a global innovation hub in healthcare has never been more promising. With its pharmaceutical sector ranked as the third largest globally by volume and $28 billion worth of exports, the country has demonstrated its prowess in delivering affordable generics and vaccines to the world. However, the time has come to pivot toward the future of healthcare — one defined by cutting-edge therapies, robust infrastructure, and dynamic research ecosystems.
To achieve, increased budgetary allocations in two critical areas — healthcare innovation and infrastructure — are imperative. By leveraging these investments strategically, India can reimagine its healthcare landscape and establish itself as a leader in advanced therapies, including cell and gene treatments, precision medicine, and next-generation biologics.
The Case for Innovation: Why It Matters Now More Than Ever
India’s healthcare system is under pressure. The dual burden of communicable and non-communicable diseases is expected to cost the economy $4.58 trillion by 2030 2 , according to the WHO. Meanwhile, global health systems are rapidly moving toward therapies that promise curative outcomes rather than symptomatic relief.
For India to compete, it must transition from being the “pharmacy of the world” to the “innovation engine of the world.” Innovation in healthcare isn’t just an economic opportunity—it’s a necessity. For instance:
Cell and Gene Therapy: The global market for cell and gene therapies is projected to reach $93 billion by 2030 3 . Yet, in India, this domain remains nascent, with limited facilities for R&D and clinical trials.
Artificial Intelligence in Healthcare: AI is revolutionizing diagnostics, clinical decision-making, and personalised treatment. However, India’s adoption remains sporadic due to fragmented health data and inadequate regulatory
frameworks.
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Digital Health Ecosystems: While initiatives like Ayushman Bharat Digital Mission (ABDM) are promising, they need sustained investments to realize their full potential.
A New Perspective: The Innovation-Infrastructure Nexus
To address these gaps, a holistic approach that combines innovation with infrastructure is essential. Innovation cannot thrive in isolation — it requires an enabling ecosystem of state-of-the-art laboratories, clinical trial networks, and skilled talent. Conversely, infrastructure investments without a focus on cutting- edge research may fail to create long-term value.
Here’s where India must adopt a dual-pronged strategy that aligns public and private sector efforts around a unified framework: The Innovation-Infrastructure Nexus (IIN).
This framework proposes three interconnected pillars
Funding for Future-Ready Healthcare
Increased R&D Expenditure: India’s current R&D spend in healthcare is less than 0.2% of GDP, far below global leaders like the US (1.2%). Doubling this allocation to 0.4% by 2028 could accelerate breakthroughs in emerging therapies.
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Incentivising Private Investment: Government-led innovation funds and tax credits for biotech startups could encourage private players to venture into high-risk, high-reward areas like gene editing and personalized medicine.
Building the Physical and Digital Backbone
Advanced Manufacturing Units: Establishing Good Manufacturing Practices (GMP)-compliant facilities for biologics and gene therapies will reduce reliance on imports and bolster domestic production capacity.
Data Interoperability: Strengthening the Ayushman Bharat Digital Mission (ABDM) to ensure seamless data exchange between hospitals, research centers, and regulatory bodies can enable faster innovation cycles.
Talent and Collaboration Ecosystems
Upskilling the Workforce: Training programs in genomics, AI, and bioinformatics should become integral to India’s higher education policy.
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Global Partnerships: Collaborating with international research organizations, such as the National Institutes of Health (NIH) or the World Health Organization (WHO), can facilitate knowledge transfer and access to cutting-edge technologies. Aligning healthcare investments with long-term national health goals.
Infrastructure Imperatives: What India Needs to Invest In
While innovation is the cornerstone of the healthcare future, it cannot flourish without world-class infrastructure. The Union Budget for 2024 allocated ₹89,155 crore to healthcare—a 3.43% increase from the previous year. However, this figure is modest compared to nations like the US and Germany, where healthcare accounts for over 10% of GDP.
Budgetary Expectations:
To enable India’s healthcare transformation, Budget 2025 must prioritise significant increases in allocations for healthcare infrastructure. Key expectations include:
Enhanced R&D Funding: Increasing funding under schemes like the Promotion of Research and Innovation in the Pharma MedTech Sector (PRIP) to attract private-sector participation in clinical research.
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Infrastructure Investments: Establishing healthcare hubs in Tier 2 and Tier 3 cities with state-of-the-art facilities for research and telemedicine.
Streamlined Regulations: Simplifying approval processes for clinical trials and manufacturing facilities to expedite progress.
India must focus on three key infrastructure priorities:
1. Regional Centers for Excellence: Establishing healthcare hubs in Tier 2 and Tier 3 cities with specialized research facilities and telemedicine capabilities.
2. Clinical Trial Networks: Streamlining approval processes for clinical trials and creating dedicated zones for faster implementation of research projects.
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3. Public Health Preparedness: Strengthening infrastructure for pandemic response, including vaccine cold chains and genomic surveillance systems.
The Way Forward: Aligning Policy with Vision
India’s journey to becoming a global healthcare leader requires coordinated action across multiple fronts. A few policy interventions can catalyse this transformation
National Innovation Mission for Healthcare: Similar to the “Make in India” campaign, this mission could focus exclusively on driving healthcare R&D and infrastructure development.
Regulatory Sandboxes: Allowing startups to test innovative healthcare solutions within a controlled regulatory environment.
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Cross-Sector Collaboration: Bringing together policymakers, academia, industry leaders, and patient advocacy groups to align efforts.
A Vision for 2030
By 2030, India has the potential to emerge as a global hub for healthcare innovation. For this, the government, industry, and academia must work together to create a vibrant ecosystem that fosters both innovation and infrastructure development. Through strategic investments, collaborative frameworks, and forward-looking policies, India can reimagine its healthcare future — not just for its own citizens but for the world.
Joydeep Ghosh is Partner, Life Sciences and Healthcare Leader, Deloitte South Asia and Srikanth Mahadevan is Director, Life Sciences and Healthcare Strategy, Monitor Deloitte
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