Medical devices platform seeks measures in Budget to reduce reliance on imports

In an effort to reduce the reliance on imports, a platform for Indian medical device makers has, in its pre-budget submission, called for a 10 to 15 per cent hike in customs duty on certain items.  

This will foster a more balanced trade environment, encouraging domestic manufacturing and reducing the reliance on imports, which currently still constitutes 70 per cent of the sector, said Rajiv Nath, Forum Coordinator at the Association of Indian Medical Device Industry (AIMED).

“The imports of medical devices are consistently over ₹61,000 crore range for the last three years and regretfully this year have increased by 13 per cent to ₹69,000 crore,” Nath said, in their submission to the Union Finance Minister, besides the Health Minister and other top officials in the apex ministry and Department of Pharmaceuticals.

The industry association also called for a capping on trade margins. “By monitoring the Maximum Retail Price (MRP) of imports, the Government will curb the excessive mark-ups often seen in the market. This measure will make medical devices more affordable and accessible to the Indian populace, ultimately benefiting public health as consumers are affected not by import duty protection as much as by artificially inflated MRP of medical devices,” he said, pointing to the difference between the landed cost of imports and the final sale price.

The aim is not for excessive protectionist measures or disruption of supplies in the market, but a more balanced ecosystem, Nath told businessline.

Tax sops

AIMED wishlist also hoped the upcoming Budget ’24 would announce income tax benefits tailored to expenditure on capacity expansion and research and development investments by medical device companies. “Such fiscal incentives are crucial for fostering innovation, enhancing production capabilities, and propelling India towards self-reliance in medical technology,” Nath said.

Citing the Global Trade Research Initiative (GTRI, 2023) report, Nath said, the Indian medical devices industry is projected to expand from $12 billion to $50 billion by 2030, reducing import reliance to 35 per cent and boosting exports to $18 billion. This shift could create 1.5 million jobs, a note from AIMED said.

Other submissions from the industry association included a call to halt the import of used or old medical devices, “ensuring safety, environmental protection, and domestic industry growth,” the note said.