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Creating an Atmanirbhar Bharat

Applauding government’s achievements, in the year 2020, AiMeD recognized that the government interventions helped the medical devices industry scale up production during the pandemic.

COVID-19 crisis has shown that Indian medical devices sector can rise to the challenge. When imports got disrupted, specific devices detailed with quantified production shortages and a focused Inter-Ministry Group coordinating with domestic manufacturers via AiMeD had addressed production bottlenecks and challenges so that not only capacity got utilized but also ramped up rapidly

Recommendations
Predictable tariff protection policy. We seek nominal tariff protection for devices being made in country and a Predictable Tariff Policy so if capacity is added by a manufacturer there’s assured nominal protection. To promote domestic medical device industry that will subsequently reduce India’s heavy reliance on import, the current basic import tariff of 0-7.5 percent needs to be 15 percent for medical device (the Bound Rate under WTO is 40 percent duty) and on their components to be at least 5 percent and next year 7.5 percent as a PMP Make in India Enabler. Concessional duty on raw material may be retained at 2.5 percent for now, for next 3 years. After GST, imported devices are cheaper by 11 percent and Indian manufacturers are challenged to compete with Chinese import in government tenders.

Consumer protection. MRP labeling needs to be enforced on unit of sale of medical devices by customs. Also government may introduce trade margin cap mechanism of maximum 75 percent trade margin between ex-factory/import landed price (which is the 1st point of sale when GST applied for the 1st time) and MRP in a phased manner or bring in a 0.5 percent GST cess on MRP to act as disincentive for putting exorbitant MRP and to incentivize ethically correct low MRP.

Patient safety regulation. There is need to decriminalize minor offenses in Drugs Act to encourage investors. Medical devices regulatory framework needed for all devices to ensure quality, credibility, assured patient safety, and fair competition. NITI Aayog has initiated the Medical Devices (safety, effectiveness, and innovation) Bill, 2019: Draft to address need for separate law which addresses Make in India and access to innovation in India. This initiative needs to be carried forward to its logical conclusion.
Restriction on import of preowned medical equipment. We seek restriction on import of preowned second hand medical equipment till we have robust regulations to ensure calibration and patient safety as well as enabling domestic production. Custom department needs to enforce restrictions on preowned/refurbished medical equipment for next 5 years till such time we have a strong regulatory machanism.

Buy Indian policy. For medical devices we need to promote culture for quality Q1 or R1 (highest rating) and not lowest price, lowest quality as is case of L1 type bidding in government. Procurement based only on specification, as we cannot match L1 Chinese prices. The public purchase order of preferential market access needs to be amended to allow preferential pricing as permissible in GFR 153 and it is also WTO/GATT compliant (e.g. as per World Bank Terms) for Indian medical device for Indian public healthcare tenders and government may consider to have preferential weightage of say 5 percent for quality certification for medical devices and additionally say 3 percent for Design India Mark Certification for promoting quality and indigenous development.

Easing cash flow challenges. Many AiMeD members request me that we do not seek subsidies. We only seek to be paid on time as a fair business procurement practice and unlike imports that are timely paid by institutional buyer by L/C, we may also be paid on time and payments not held back due to delays of installation sites not being ready etc. If there is one stimulus in COVID times, that businesses seek, that is clearance of outstanding dues by government.

Launch of MedTech Park at Noida, UP; Chennai, Tamil Nadu; Panipat, Haryana; Kerala; Goa; Himachal Pradesh; Karnataka; Gujarat; and Rajasthan have also keen interest to support such MedTech clusters and parks.

Time has come for domestic industries to be vocal for local and for realizing our Honorable PM’s vision of an Atmanirbhar Bharat, we need to make manufacturing to be a rewarding experience for creating an Atmanirbhar Bharat.

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