Medical device industry expresses “deep disappointment” over Union Budget

Growing imports

India imported medical devices worth ₹63,200 crore in 2021-22, up 41 percent from ₹44,708 crore in 2020-21, as per data from the Union Ministry of Commerce and Industry, he explained.

He expressed unhappiness over the Union government not implementing the recommendations of the Parliamentary Committee on Health.

Nath explained that if the government implements even 70 percent of the recommendations, India could see a reversal in import dependence and growth of the domestic industry.

“It is painful to see the domestic industry players shutting shop as the local industry cannot compete with cheaper Chinese imports,” Nath said.

Rajiv Nath, AiMeD expresses unhappiness over Budget 2023

Import of medical devices from China went up by nearly 50 percent last year from ₹9000 crore to ₹15000 crore on account of low duties and convenience to import.

The government had relied on these same domestic manufacturers when imports got disrupted during the Covid-19 crisis.

Medical devices industry’s expectations

1. Separate Department of Medical Devices.
2. Graded increase of customs duty to 10-15 percent from the current zero to 7.5 percent
3. Shifting from an eight-digit HS code to a 10-digit HS Code as done by the US and Europe to give more granular data for enabling better analysis and policy making
4. Reduced GST as medical devices are not luxury goods.
5. Trade Margin Monitoring: The purpose of low duty was to help consumers get affordable access to devices. This objective is not realised if consumers will be charged a high MRP of 10 to 20 times the import landed price.

Nath said that the only positive announcement was plans for the skilling of manpower for the manufacturing of medical technologies.

The Indian medical devices industry has the potential to reach $50 billion by 2030.

“We request the government of India to encourage domestic manufacturing to be sustainable in long term for becoming Atmanirbhar and to address National Healthcare Security that was severely exposed at the onset of Covid,” he said.

“We can only be hopeful that the fine print of the Union Budget would possibly act upon our recommendations on levy of Cess to enable nominal protection for investors and commercial viability to produce in India which is challenging if basic custom duty is 7.5 percent or lower; to realise our vision to be among the top five manufacturing hubs in the world for medical devices and align this to our PMs vision of being Atmanirbhar,” he added.