Domestic MedTech Industry’s Expectations from upcoming Modi 3.0 Union Budget

New Delhi: Hopes still linger among Indian medical device manufacturers that government policies might walk the talk of ‘Atmanirbhar Bharat’ and ‘Make in India’ in medtech domain. Medtech leaders have again pinned hopes on upcoming Modi 3.0 Union budget FY25.

The previous two regimes left much to be desired for this sector. It was high on decibel but low on content. The dream of India becoming global hub of medtech like it is already being the pharmacy of the world oscillated between hope and despair. The skewed custom duty policy in favor of import of foreign medtech is making this dream far- fetched. The ever increasing import bill touching astronomical mark of Rs 69, 000 crores is a sad commentary on intent of the government.

Mr. Ganesh P Sabat, CEO, Sahajanand Medical Technologies Ltd in a statement has expressed his expectations from the impending Union budget. Mr Sabat says, With an anticipated robust economic growth that India is witnessing and a focus on healthcare transition as elucidated by the Hon’ble FM during the interim Budget 2024, from the medical devices industry we urge the Government to continue its focus on accelerating MedTech infrastructure, R&D, skill development, and sustainability along with higher allocation to healthcare spend that will give a strong impetus to HealthTech. The hope is for a substantial increase in the overall health budget to at least 3% of GDP to address existing gaps that will ensure strengthening of the proposed Ayushman Bharat scheme expansion, timely payouts to hospitals & industry so that patients are not devoid of innovative & latest state-of-the-art MedTech devices, bringing to reality not only the ‘AtmanirbharBharat’ clarion call but also the “availability, accessibility & affordability” vision of Prime Minister Modi as we move towards a ‘ViksitBharat’.”

Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD) has written a letter to Union Minister of Finance, Nirmala Sitaraman, talking turkey instead of playing to the gallery. Mr Nath, without mincing words, has clearly expressed pain points that are hindering Make in India in MedTech.

Mr Nath says, ‘ The Very low Duty of Zero to 7.5%on Medical Devices all these years have not helped Consumers if access to a local production base is being denied and market share of Domestic Industry is only around 30%. Additionally these Consumers / Patients who are bearing the brunt of out of pocket expense are exposed to artificially inflated MRP labelled imports (which Indian Manufacturers are forced to match thereby creating a skewed market place with unethical practices which are non regulated or ineffectively regulated).

He further adds, ‘ We request for your kind consideration of following Medical Device Industry Proposals for Union Budget2024- 25 to help curb ever increasing imports , as even last year the Medical Device Industry Proposal for Union Budget 2023-24 was not considered, even though Dept. of Pharma and the Parliament Committee on Health in its 138th Report and GTRI Report on this Sector has been supporting a review of this Tariff Structure to enable viability of manufacturing to address the 15% competitive disability factor (as per NITI Aayog’s assessment) .The imports are consistently over 61000Crore Rs for last 3 years and regretfully this year have increased by 13% to Rs.69000 Crore’

Without withholding anything he says, ‘ As assured by you in your earlier Budget speech there is a need to remove NILDuty Exemption Notifications ( and we recommend even Concessional Duty Exemption Notification that reduces Duty to 7.5%) which have made it non viable to manufacture and motivated many Manufacturers to become importing Traders or Pseudo Manufacturers. This removal of exemption duties on some devices was also recommended by DoP (letter enclosed -Annexure 2) in line with the National Medical Device Policy of 2023 released by the Honorable Prime Minister which seeks to convert an 70% imports dependent Bharat to not only bean Aatma Nirbhar Bharat but the leading Global Manufacturing Hub of Medical Devices as stated in NMDP’23.

Madam,there is also a need to reschedule the duty revision of Key Components of X-Ray Equipment that had been planned under a PMP as manufacturing of these Components have not yet started and the duty increase is now creating an Inverted Duty Structure as imports of X-Ray Equipment case is from Korea (under NIL Duty FTA). DoP has endorsed these recommendations.

Mr Nath sums up his letter by proposing some changes as follows to bring dreams of Atmanirbhar Bharat and Make in India to fruition. 

—Increase in Custom Duty to a nominal10%to15%(and as a PredictableTariff Policy)

—Correction of Inverted Duty by levying Cess of 5% custom duty on balance Medical Devices (In 2020 this was applied to 5 of the4 Digit HS Codes and balance 22 HS Codes are pending)

—Trade Margin Capping by monitoring MRP of Imports (if found over10 to 20 times of CIFprice).

—IncomeTax benefits for CAPEX and R&D investments in Medical Devices. This will enable Make in India.

Dhananjay kumar

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