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by Suryaa |
India’s pharmaceutical industry is gearing up for a new wave of growth, driven by sweeping changes in the Goods and Services Tax (GST) regime that promise to make life-saving drugs and healthcare more affordable. The sector, which recorded an 8.7% value growth in August 2025, is now bracing for a broader transformation in pricing, access, and patient volumes.
“The GST Council’s tax rate restructuring in the pharma sector is transformative for accessible healthcare,” said Suresh Nair, Tax Partner, EY India. “By lowering GST on all medicines from 12% to 5% and granting nil rates to 36 vital life-saving drugs, it significantly reduces patient expenses and improves access to essential therapies.”
The GST Council’s 56th meeting early this month approved a two-rate structure—18% standard and 5% merit rate—while exempting key health and life insurance products and slashing GST on medical devices and equipment. The move is expected to ease the cost burden on patients and boost demand for high-value therapies, especially in oncology and rare diseases.
“This is a game-changer for healthcare in the country,” said Rajji Mehdwan, MD & CEO, Roche Pharma India. “For patients, this isn’t just policy—it’s hope.”
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