Finance Minister Nirmala Sitharaman in her Union Budget 2026 speech announced a multi‑layered strategy to strengthen India’s health workforce, expand allied care services, boost mental‑health infrastructure, and position the country as a global destination for medical value travel.
A key focus of the Budget is the accelerated expansion of India’s Allied Health Professionals (AHP) ecosystem. Announcing a major workforce push, Sitharaman said, “Existing institutions for AHPs will be upgraded and new AHP institutions established in private and government sectors… and add 100,000 AHPs over the next five years.” These new and upgraded institutions will span 10 crucial disciplines, including optometry, radiology, anaesthesia, OT technology, applied psychology and behavioural health.
To respond to India’s rapidly growing elderly and assisted‑care needs, Sitharaman outlined plans to build what she called a “strong Care Ecosystem”. She added that NSQF‑aligned programmes will be developed to train multiskilled caregivers, combining core health support with wellness, yoga and the operation of medical and assistive devices. “In the coming year, 1.5 lakh caregivers will be trained,” she said.
"The Union Budget 2026–27 sends a reassuring message that India’s growth will be anchored in healthier citizens and stronger health systems,” says Dr Prathap C Reddy, founder and chairman, Apollo Hospitals. “The continued focus on expanding public health capacity, strengthening prevention, and improving access across tier-2 and tier-3 India is consistent with the vision of Viksit Bharat.”
Healthcare stocks reacted positively to the Budget announcements. Shares of major hospital chains—including Max Healthcare (up 4.09 percent), Global Health (up 6.79 percent), Narayana Hrudayalaya (up 2.94 percent), Apollo Hospitals (up 1.59 percent) and Fortis Healthcare (up 1.94 percent)—all rallied after the government unveiled plans for five Regional Medical Value Tourism Hubs. Separately, broader health‑linked counters also showed strength, with the Nifty Healthcare Index climbing 0.75 percent during the session.
Positioning India as a global hub for medical tourism is emerging as a strategic priority. Sitharaman announced a new scheme for states to establish five regional medical hubs in partnership with private players. Explaining the vision, she said these hubs will be “integrated healthcare complexes that combine medical, educational and research facilities”, complete with AYUSH centres, Medical Value Tourism Facilitation Centres, diagnostics, post‑care and rehabilitation infrastructure. These hubs are expected to generate diverse job opportunities for doctors and allied health professionals.
“The announcement of five regional Medical Value Tourism hubs, supported centrally, will further position India as a global healthcare destination and act as a key enabler for growth, while integration of Ayush centres into these hubs will showcase India’s holistic care capabilities,” says Ameera Shah, president, NATHEALTH and promoter & executive chairperson, Metropolis Healthcare Ltd.
Reiterating the global demand for traditional medicine, the Finance Minister noted that “post‑COVID, Ayurveda gained a similar global acceptance and recognition” as yoga, and outlined a three‑pronged plan to meet rising international demand. She proposed setting up three new All India Institutes of Ayurveda, upgrading AYUSH pharmacies and drug‑testing labs to improve certification standards and create more skilled personnel, and upgrading the WHO Global Traditional Medicine Centre in Jamnagar to strengthen evidence‑based research, training and global awareness.
Ayushman Arogya Mandirs now exceed 1.82 lakh facilities, logging 506.5 crore footfalls and 42.66 crore teleconsultations, while Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana has issued 42.78 crore cards and enabled 10.98 crore hospital admissions, as per the Economic Survey.
“The government continues its capacity-first approach by scaling the training of healthcare workers, including caregivers and allied health professionals, while maintaining support for traditional medicine and AYUSH institutions,” says Sunil Thakur, partner & investment committee member, Quadria Capital. Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance, adds, “The Budget reinforces a holistic, patient-centric approach to healthcare, including mental health, AYUSH, medical tourism, and trauma care.”
Recognising the acute need for mental‑health infrastructure, Sitharaman highlighted a long‑standing gap: “There are no national institutes for mental healthcare in north India.” To address this, the government will establish NIMHANS‑2, while upgrading the National Mental Health Institutes in Ranchi and Tezpur as Regional Apex Institutions.
The Budget also places emphasis on strengthening public health infrastructure, particularly at the district level. Noting the strain families face during emergencies, Sitharaman said, “Emergencies expose families, particularly the poor and vulnerable, to unexpected expenditure.” To address this, she announced that the government will “strengthen and increase these capacities by 50 percent in district hospitals by establishing emergency and trauma care centres.” This expansion of trauma and emergency readiness forms a crucial leg of the country’s public‑health push, aimed at improving timely care and building a more resilient health system.
Offering relief to patients battling critical illnesses, Sitharaman said, “To provide relief to patients, particularly those suffering from cancer, I propose to exempt basic customs duty on 17 drugs or medicines.”
Shah of Metropolis says recognising the sector’s compliance challenges, the government’s focus on appropriate regulation will allow providers to prioritise patient care and innovation, while measures such as lowering the TCS rate under the Liberalised Remittance Scheme from 5 percent to 2 percent for education and medical purposes will further improve financial access.
Additionally, the Finance Minister announced that “7 more rare diseases” will be added to the list eligible for import‑duty exemptions on drugs, medicines and Food for Special Medical Purposes (FSMP).
“The exemption of basic customs duty on 17 drugs and medicines for cancer and rare diseases will improve affordability for patients in need. Overall, this is very positive for the industry. The only further ask would be direct tax incentives for research and development in the pharmaceutical sector,” says Hitesh Sharma, partner and national health science tax leader – EY India.
Read Forbes India's complete Budget 2026-27 coverage here
First Published: Feb 01, 2026, 18:52
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