India’s Medical Devices Exports To UK Remain Limited Due To Prolonged Regulatory Processes: GTRI

To encourage these exports, the agency suggested India hold a Mutual Recognition Agreement (MRA) to help expedite the entry of these devices into the UK market. 

The UK is a major medical device manufacturer with exports crossing $4 billion, as of 2022-23, in which essential orthopedic appliances remained the top export at $2 billion.

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The extended regulatory approval processes in the UK affect Indian exports of medical devices to the British market, think tank GTRI said on Wednesday. To encourage these exports, the agency suggested India hold a Mutual Recognition Agreement (MRA) to help expedite the entry of these devices into the UK market. 

The Global Trade Research Initiative (GTRI) co-founder, Ajay Srivastava, said, “The MRA would reduce regulatory compliance and audit requirements, potentially enhancing India's exports,” reported PTI. The think tank stated that devices with  CDSCO (Central Drugs Standard Control Organisation) licence or Quality Council of India’s Indian Certification of Medical Devices (ICMED) certification. 

Currently, both countries are engaged in discussing a free trade agreement and this sector forms an important part of the negotiations. The existing zero import duties on medical devices in the UK indicate an absence of direct tariff-related advantages for India as part of the FTA, the agency noted. 

This essentially means that India’s medical devices industry will not benefit and receive tariff concessions, and ‘even with zero tariffs in the UK, India's medical device exports to the UK are limited due to prolonged regulatory approval processes in the UK’, the think tank expressed. 

The body further said that the UK’s regulations allow products to be labelled as ‘Made in UK’ irrespective of whether they are manufactured there or not. This is permitted under the present UK Medical Device Regulations, which state that a prodcut can be labelled with a ‘Legal Manufacturer’ from the UK, even if the actual production doesn’t take place in the country. 

“Post-FTA, this may create a risk of increased imports due to duty cuts and lax product- specific rules of origin, potentially impacting India's growing medical device sector,” GTRI noted. The global body noted that India could consider duty reductions only for products in which Indian exports are high and the country has a competitive advantage in exports. 

Srivastava explained, “India may adopt conservative rules of origin to prevent pass-through imports from third countries with little processing in the UK. A good rule will be using the twin criteria involving change in Tariff Heading and Value Addition for all such products.” 

He assured that this approach would help secure the benefits of the FTA to products with significant processing in the partner countries, in turn, protecting India’s trade interests and shielding the domestic industry from possible market disruption.

Notably, India has a strong local manufacturing base in the medical devices industry. The country can manufacture a wide range of quality medical devices, promoting self-sufficiency. The GTRI head said that the under-explored medical devices market is set for quick growth boosted by healthcare investments. 

The medical devices industry in India has the potential to grow to $50 billion from $12 billion by the end of the decade, lowering the dependence on imports to 35 per cent and increasing exports to $18 billion, Srivastava said. He noted that this would lead to the creation of 1.5 million jobs. 

The GTRI co-founder noted that to help the sector reach its full potential, it would need further assistance as the industry faces a 15 per cent cost disability owing to the increasing cost of power, and supply chain inefficiencies. Additionally, government support is required to control dumping, increase domestic production, and lower imports. 

The UK is a major medical device manufacturer with exports crossing $4 billion, as of 2022-23, in which essential orthopedic appliances remained the top export at $2 billion. Other important products included X-ray radiation apparatus, breathing appliances, and gas masks. India’s imports of medical devices from the UK stood at $215 million in 2022-23.

Out of this, top medical devices were apparatus for diagnostic lab analysis polarimeters, refractometers, and spectrometers which stood at an import value of $63.83 million, followed by X-ray and other radiotherapy apparatus at $52 million, diagnostic/lab reagents at $29.18 million. Other imports included instruments for surgical and dental use for $28.07 million, mechano-therapy appliances, oxygen therapy, artificial respiration apparatus for $13.42 million, and orthopedic devices for $11.49 million.