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India To Place Among The Top 5 Medical Devices Manufacturing Hubs

Incentivize traders to become manufacturers rather than encouraging manufacturers to import and sell under their brands.

“In last 2 years there has been a huge boost in manufacturing of Consumer Electronics & Mobile Phones with Custom Duty being increased to 15% – 20%. Similar success can be replicated in Medical Devices, if Government is similarly decisive and bold. Halfhearted measures will get half way results. No action will result in further import dependency as was the case last year and more manufacturers will turn to traders and imports. Investments by Indian / overseas manufacturers in building factories need to be protected, said Rajiv Nath, Forum Coordinator of Association of Indian Medical Device Industry (AiMeD).

Budget Recommendations

Reasonable Tariff Protection for enabling Make in India: incentivise traders to become manufacturers as was status a decade ago rather than current status where we encourage manufacturers to import and sell under their brands.  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% needs to be over 15% for Medical Device (the Bound Rate under WTO is 40% Duty) and Concessional Duty on Raw Material may be retained at 2.5% for now, for Next 3 Years. GST regime  is in favour of imports and has been detrimental to Make in India. MSME sector has been worst hit with huge job losses. After GST, imported Devices are cheaper by 11% and at times we are unable to compete with Chinese import in Government Tenders. In other Countries like Iran as soon as a Factory is put up, they start to support the Domestically produced Product with import restrictions and Duty protection.

Level playing Field for Domestic Manufacturers: If government can boost manufacturing of mobile phone & consumer electronics by levying 15% to 20% duty and for automotive, bicycles & motorcycles, we request for medical device, which is even more important similar tariff protection clauses. Unless the Indian manufacturers get level playing field and visible benefit to manufacture in India in comparison to the imports, nobody will venture out to this tedious job of putting together men, machine and capital for manufacturing of medical device in India to make quality healthcare affordable to common masses which is a dream and mission of Prime Minister Narendra Modi.

Encourage a Phased Manufacturing Plan of Components by increasing duty to 5% Basic Duty on import of Part or Accessories for Medical Devices, up from 2.5% done in January 19th 2016 by Notification No. 4/2016 and then increase to 7.5% in 2nd year under heading HS Code 90.18, 90.19, 90.20, 90.21, 90.22. Consider 2.5% Basic Duty on import of Medical Grade Raw Materials for Medical Devices under heading also for HS Code 90.27, 30.06 & 38.22 on actual user condition, as had been done earlier for 90.18, etc., to include items in the Notification 50/2017 Dt: 30.06.2017 to ensure there is no inverted duty structure.

India Needs to Regulate all Medical Devices under a Patients’ Safety Medical Devices Law to protect patients and aid responsible manufacturing

Need to protect Consumers from exploitatively high MRP in Medical Devices by rationalized price controls and aid ethical marketing by capping markup over import landed price.

Need to encourage employment and Make in India of Medical Devices and address 80-90% import dependency by a predictive nominal tariff protection policy as done for mobile phones to ensure a vibrant domestic industry & encourage competitiveness and price stability driven by competing domestic players.

Need to incentivize Quality in Healthcare Products in public healthcare procurements by preferential pricing for Quality, Q1 e.g. ICMED (QCI’s Indian Certification for Medical Devices) instead of L1 (lowest price) to ensure patients access acceptable quality for healthcare.

The Indian Medical Device Industry is very hopeful the Union Budget will make quality healthcare accessible and affordable for common masses, enable placing India among the Top 5 Medical Devices manufacturing hubs worldwide and help end the 80-90% import dependence forced upon us and an ever increasing import bill of over Rs 38,837 Crore. Right from trade margin rationalization to ensuring a separate set of legislations and regulatory framework to govern the medical device sector and everything in between needs to be looked afresh to galvanize domestic manufacturing. A pro-active policy formulation to regulate Medical Device differently than Drugs should permit free market dynamics to succeed and keep regulations simple, protecting consumers and incentivizing Make in India.-MB Bureau