Union Budget 2026–27: Can HealthTech Ecosystem Become India’s Next Growth Engine?

As India prepares to present its Union Budget 2026-27, the focus on healthcare has shifted from being a social responsibility to an important source of economic and productivity momentum. In recent years, the focus on health technology or health tech has shifted from being an experimental domain to an important structural range, starting from diagnosis to health data.

The coming budget offers a chance to accelerate this transition, not by making headlines but by building the right foundation for the sustainable growth of digital healthcare.

How India's Healthcare Technology Can Evolve from Pilots to Platforms?

India has witnessed the rapid adoption of digital health tools ranging from teleconsultations, at-home diagnostics, to e-pharmacies and health data platforms. However, several of them still continue to be fragmented.

"The budget 2026-27 needs to emphasize the transition of HealthTech from isolated pilot projects to interoperable platforms that can work across states, providers, and income groups. It is going to be very crucial to have targeted fiscal support for digital health infrastructure, particularly in Tier 2, Tier 3, and rural India," said Apurv Abhay Modi, Managing Director & Co-Founder, Abhay Group.

Investments in broadband connectivity, cloud infrastructure, and last-mile health access can go a long way in enabling technology not only to reach but also uplift the marginalized sections of society in terms of healthcare.

Government Policy Support for MSMEs is Critical

MSMEs are responsible for most of India's HealthTech innovations (manufacturers, diagnostic developers, digital service providers, and logistics partners). The overheads for MSMEs are substantial and include compliance with regulatory requirements, multiple levels of approval, and lengthy payment terms.

In the 2023 -2024 Budget, MSMEs involved in HealthTech should be afforded the following priority:

• More simple and efficient compliance requirements
• Expedited Regulatory Approval of Validated Digital Health Technologies
• Access to Low-Interest Working Capital
• Defined GST Treatment for Digital Health Services and Equipment

"HealthTech MSMEs do not seek a blanket subsidy; they seek predictability and accelerated processing time with reduced barriers so that they may devote their attention to innovation as opposed to administrative matters," added Apurv Abhay Modi.

Digital Public Health and Data - The Future

India has already proven that a digital public infrastructure can be developed and scaled nationally. The next stage of development will involve the establishment of health data commons with appropriate and robust legal protections.

As per Apurv Abhay Modi, the 2026-2027 Government Budgets could assist in developing:

• Standards for Interoperability of Health Data
• Secure Interoperability of Health Data Transaction Exchanges
• Incentives for the Use of De-identified Research-Sourced Health DataImproved Cyber Security Parameters for Healthcare Provider Platforms

When Health Data is electronically exchanged across Diagnostics, Primary Healthcare Providers, Hospitals, and Public Health Processes, it allows for the advancement and modification of early detection, later diagnosis, and the use of data and compilation of evidence.

At this point, HealthTech moves from a purely Convenience Model to being an Integral Component of National Capability.

Skilling and Talent: The Missing Link

It is not the technology itself that revolutionizes healthcare, but the people. One of the main topics hardly discussed in the context of HealthTech is the shortage of skilled manpower that is equally knowledgeable in healthcare and digital systems.

As per Apurv Abhay Modi, the budget should cater for:

• HealthTech-related skilling programs
• Cross-disciplinary training in healthcare, data science, and AI.
• Upskilling frontline health workers in digital tools utilization.

A digitally enabled healthcare system will fail if the health workforce is not trained to use it confidently and ethically.

Encouraging Innovation Without Compromising Trust

HealthTech innovation is fast-paced, whereas healthcare needs trust. Budget policy has to make a prudent balancing act between facilitating innovation and ensuring safety.

"Regulatory sandboxes accelerated pilot approvals, and outcome-based validation frameworks are some of the tools whereby innovators can work efficiently under the regulations. In the meantime, quality criteria and product monitoring are necessary to retain public trust," added Apurv Abhay Modi.

There are no reasons to slow down innovation, but it has to be directed.

Sustainability And Preventive Healthcare

Globally, healthcare costs are increasing, and India is no exception. The Budget 2026-27 can alleviate the long-term burden by promoting preventive, data-led healthcare models.

Giving incentives for early screening, regular health checkups, and digital preventive care can help hospitals and public health spending operate without excessive pressure.

Prevention is not only good medicine; it's good economics.

Positioning India as a Global HealthTech Hub

In terms of scale, talent, and cost advantage, India is already well-positioned to be the global leader in HealthTech. What is currently required is a unified policy push that brings together manufacturing, digital platforms, regulatory clarity, and export facilitation.

HealthTech investment, seen as a strategic sector in the Budget (similar to fintech or electronics manufacturing), can facilitate India's transition from a mere service provider to a global innovation hub.

Apurv Abhay Modi says if the budget is formulated appropriately, it can contribute to the creation of a HealthTech ecosystem that is inclusive, scalable, and globally competitive, one that not only digitizes healthcare but also strengthens it for the coming decade.