KTR urges Centre to strengthen medical devices industry, says Telangana willing to be partner

The concerns raised

The key points raised by KTR in the letter included GST implication, import substitution, and increased self-reliance.

In effect, the references were to the apparently inverted duty structures impacting the Make in India scheme, inadequate testing and certification infrastructure, concerns over the availability of raw material, and supply-chain challenges.

Citing the concerns raised, KTR said that, in addition to the custom duty, even GST on spare parts of medical equipment is currently charged at a higher rate than the equipment itself.

This, he explained, adversely impacts the costs of medical devices in India and contradicts the Telangana government’s efforts to provide low-cost healthcare to the people.

Additionally, he said there was no refund on GST in healthcare.

“Medical devices are not luxury items, and it is extremely important to recognise that devices and diagnostics will be critical to make healthcare accessible for all. In this connection, I urge the Government of India to review and reduce GST on medical devices to the extent of 12 percent and on diagnostics to the extent of 5 percent as against the 18 percent currently levied,” KTR said.

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A ‘Make in India’ opportunity 

KTR also said that the global medical devices market was already valued at $520 billion, and the Indian market was among the top 20 in the world by size — and the fourth largest in Asia, after Japan, China, and South Korea.

KTR said that the opportunity is significant as the industry is growing at more than 15 percent CAGR.

“The inverted duty structure, as of today, is not conducive to local medical device manufacturing as there are certain segments where it is more viable to import products than manufacture in India. There are instances where import duty is levied on raw materials and not on finished goods. Therefore, I request the Government of India to review and correct inverted import duty structures and barriers to manufacturing in India to encourage Make in India to reduce import dependence,” KTR added.

About the constant challenges in the availability of raw materials in the medical device industry, KTR said that the sector places bulk orders from outside the country, which usually takes 6-12 months to be delivered, and then stocking them becomes a huge challenge.

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The Telangana minister cited suggestions from the industry to promote local indigenisation of component manufacturing for medical devices such as IC and electronic components, LED monitors and panel display units, batteries, semiconductors, and mechatronics. which are mostly imported from outside.

He added that steps must be taken to encourage the manufacturing of medical consumables in India with a conducive tariff structure and phased manufacturing plan.

He urged the Union government to consider establishing schemes to promote component manufacturing in India and incentivise companies by raising import duties in phases, as done for mobile phones and X-ray machines.

Willing to partner with GoI: KTR

“The government of Telangana is willing to partner with the government of India to set up a Medical Imaging Hub with advanced equipment and machinery in the Medical Devices Park Hyderabad to promote the industry to manufacture these components,” he said.

He asked the Central government to consider drafting legislation for quality testing labs in India, incentivise labs that are accredited and encourage setting up more testing facilities with advanced equipment.

“The Telangana government is willing to partner with the Centre to set up additional testing labs in Hyderabad to cater to pan India demand,” he said.

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