Indian drug and medical device manufacturers have welcomed the GST reduction on medical devices and lifesaving drugs, calling it a major step toward improving access and easing treatment costs.

The Association of Diagnostics Manufacturers of India (ADMI) hailed the government’s sweeping GST reforms as a “decisive boost for affordable healthcare and for India’s MedTech and IVD ecosystem.”

“Bringing medical devices, including diagnostic equipment and test kits, into a uniform five percent slab, alongside zero GST on health and life insurance and relief on essential medicines, will meaningfully cut out-of-pocket costs for patients and accelerate screening, early detection, and treatment across India. Equally important, a simpler two-rate structure reduces compliance friction, eases working-capital pressures, and encourages investment in quality, R&D, and export readiness, which are key pillars of ‘Make in India’ for diagnostics,” said Jatin Mahajan, ADMI President and Managing Director, J Mitra & Company.

The association urged quick, unambiguous implementation, with clear notifications, proper HS code alignment, and prompt refunds to ensure that the benefits flow immediately to hospitals, labs, and citizens.

“Industry stands ready to pass through the gains, expand access to POCT and advanced immunoassays, and build globally competitive manufacturing at scale. This is a timely, growth-friendly reform that advances both public health and India’s ambition to be a trusted IVD and medical-technology hub,” Mahajan added.

Jeevan Kasara, Director and CEO of Steris Healthcare, described the GST reforms as a win for the health care ecosystem.  

He said, “Slashing of GST on medicines — ranging from as high as 12-18 percent to just five percent, and zero on critical life-saving drugs — is a great move in making healthcare truly affordable and accessible.”

“The reforms by FM Sitharaman dismantle the long-standing roadblocks, which had pushed up the cost of life-saving medicines, cancer drugs, and critical health equipment. The tax relief directly benefits patients and families who are already facing significant financial challenges during the treatment process, helping to offset out-of-pocket costs and reduce delays in care.”

“With reduced costs and wider availability, the reforms promote better health results and greater insurance coverage. This is more than a short-term cash injection; it is a sign that GST policy now serves the end of public health and social welfare. That is a win for the entire health care ecosystem, from patients to hospitals to pharmacies. Most significantly, it furthers India’s goal of providing accessible, quality healthcare to all its people, converting GST into an instrument of treatment rather than trauma,” Kasara added.

According to Dr. Sujit Paul, Group CEO, Zota Healthcare, the reduction of GST rates on essential medicines and medical equipment marks both “a historic moment for affordable healthcare for all and a fundamental move to lower the financial impact on patients and their families battling severe health needs.”

Not only has GST on 33 lifesaving drugs been reduced from 12 percent to NIL, but GST on three critical drugs for cancer, rare diseases, and chronic illnesses has also fallen from five percent to NIL. Additionally, GST on all other drugs and medicines has been lowered from 12 percent to five percent, making routine treatment and long-term care far more affordable. Similarly, GST on apparatus and devices across all medical, surgical, dental, and veterinary needs has been cut from 18 percent to five percent, while GST on essential supplies such as wadding gauze, bandages, diagnostic kits, reagents, and glucometers has come down from 12 percent to five percent. 

Dr. Paul said the move will put millions of rupees back into the wallets of concerned families.

“Letting the effective use of GST improve affordability is good news, as it enhances access to crucial healthcare solutions. We have continued to empower Indians through the promise of generic medicines and the access they provide to quality healthcare. We exist to help make trusted high-quality generics available as lower-priced alternatives.  This announced reform has only propelled this sentiment forward, paving the way for a future where price is not a barrier to treatment, and every patient can have the care they need,” he added.

Saransh Chaudhary, President of Global Critical Care at Venus Remedies and CEO of Venus Medicine Research Centre, noted that by cutting taxes on essential and critical medicines, the government has addressed a pressing barrier to affordability, especially in Tier 2 and Tier 3 cities where treatment costs remain a challenge.

“These changes reflect a clear intent to align fiscal policy with patient needs and public health priorities. What will matter now is ensuring that the benefit of lower taxes translates into tangible access for patients across the healthcare system. We view these reforms as a constructive move toward a more inclusive healthcare ecosystem and remain committed to working alongside policymakers to ensure that affordability leads to real-world impact for patients,” he stated.

Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat LLP, echoed that the GST rationalisation represents a decisive win for patients and the pharma industry alike.

“By keeping formulations at just five percent, treatment costs for millions of households become more manageable, while nearly 36 life-saving drugs—from cancer therapies to medicines for rare diseases—are now fully exempted. This isn’t just tax policy; it is a lifeline that puts affordability and public health at the forefront,” Mishra said.

“For pharma players, the clarity on a five percent slab and exemptions removes long-standing ambiguity, enabling transparent pricing and better market planning. The move will expand access in semi-urban and rural markets, ease litigation, and free up resources for innovation. Above all, it signals a shift in GST’s philosophy—where taxation aligns with social priorities, ensuring that access to critical medicines is never compromised by cost,” he added.