Health Budget 2023: Industry Seeks Medical Devices Policy, Reduction In Customs Duty On Equipment

Budget 2023: Industry experts in the medtech sector have called for exemption of customs duty on import of high-end equipment.

India imports nearly 80 per cent of medical devices, mostly from China

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Budget 2023: At a time when the Centre has embarked on the mission of "Atmanirbhar Bharat", official data shows the country imports nearly 80 per cent of medical devices, mostly from China. Moreover, the customs duty and taxes levied on medical devices in India are one of the highest in the world.

Reduction In Customs Duty On Medical Equipment

Ahead of the Union Budget 2023, industry experts in the medtech sector have called for exemption of customs duty on import of high-end equipment.

"Exemption of customs duty on the import of high-end MedTech equipment will help in reducing the cost of healthcare for the end customers i.e., the patients. We expect a tweak in the customs duties and taxes levied on medical devices," Dr Shravan Subramanyam, managing director, Wipro GE Healthcare, told ABP Live.

In fact, the Medical Technology Association of India (MTaI) has demanded customs duty on medical devices be reduced to 2.5 per cent, PTI reported.

On top of that, a GST rate of 18 per cent is levied on software, a component that is closely intertwined with modern-day medical devices.

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In recent years, Dr Subramanyam said, the government has spurred efforts to support local R&D and manufacturing for the medtech sector by setting up medical device parks and implementing production-linked incentive (PLI) schemes.

"We anticipate expansion of the PLI scheme for the medtech sector with adequate flexibility integrated in the scheme to address the ever evolving market dynamics to truly make Indian domestic manufacturing globally competitive," he said.

"Rationalisation of GST for medtech sector, extending zero rating and schemes like Remissions of Duties and Taxes on exported products (RODTEP) to Export Oriented Unit (EOU) /Electronic Hardware Technology Park (EHTP) will provide the needed impetus to local manufacturing for domestic use and exports," he added.

National Medical Devices Policy

Experts have also called for formalisation of the greatly needed medical devices policy to facilitate well-structured growth for the sector and help accelerate our capabilities to innovate, manufacture with self-reliance and export.

In 2022, the government had released a draft National Medical Devices Policy aiming to reduce India's import dependence from 80 per cent to 30 per cent in the next 10 years and make it one of the top five global manufacturing hubs for medical devices by 2047.

In fact, the Association of Indian Medical Device Industry (AiMeD) expects Finance Minister Nirmala Sitharaman to announce a separate Department of Medical Devices in the upcoming Budget, IANS reported.

Dr Raajiv Singhal, managing director and CEO, Marengo Asia Hospitals, said for the medtech sector to grow in India, research and innovation should become a key component in Budget allocation.

"This will also open doors for the manufacture of medical equipment, devices, and pharmaceuticals, impacting the costs for the patients," Dr Singhal told ABP Live.

Medical Devices Industry In India

According to the Union Ministry of Commerce and Industry, India imported medical devices worth Rs 63,200 crore in 2021-22, up 41 per cent from Rs 44,708 crore in 2020-21.

Imports from China grew 48 per cent from Rs 9,112 crore in 2020-21 to Rs 13,538 crore in 2021-22. Imports from the US also increased by 48 per cent to Rs 10,245 crore in 2021-22, according to the IANS report quoted above.