New Delhi: Only a few days ago, the fear of apocalypse on September 15 gripped the whole world. A giant asteroid was said to be passing perilously close to earth. The fear was it might skid a bit and collide with Earth. Interestingly, hot on the heels, the dread of same nature is gripping Domestic Device Industry of India, thanks to FTA negotiations under way. The fear is looming large that FTA might prove an asteroid and wash burgeoning domestic medical device industry out.
AiMeD (Association of Indian Medical Device Industry) has expressed its worst fears. It has said that if zero import duty is allowed under FTA, it will prove a certain death knell to domestic medical device industry.
Rajiv Nath, Forum Coordinator of AiMeD, in an express missive via email to Nitin Kumar Yadav, Joint Secretary, DoC, (Medical Devices) has voiced forum’s angst at the news pouring in to them about impending catastrophe to the industry. Mr Rajiv Nathe has cced his worst fears to all concerned high officials in different ministries.
Chatting with Medicare News, Mr Nath has said, ‘The risk is that third country products will get routed to India via FTA countries especially EU as country of origin is not mentioned ( or a requirement in EU) and marketing companies are permitted in EU to label packaging not as “Marketed By XYZ Co” but as “Legal Manufacturer: XYZ Co . “ so even if a product is Chinese or Taiwanese it can be labelled n sold to India as a purported EU made product coming from a Legal Manufacturer in EU as country of origin is not a requirement in EU unlike in USA , India, Saudi Arabia n most countries’.
Mr Nath has clarified saying, ‘We are not against imports .
These are welcome (and allow us to be competitive by quality and value of delivery ) as long as they don’t undermine n hurt Indian manufacturing especially of sectors where there is largely import dependence like medical devices
The emails contains following content- ‘We have been informed that EU- India Trade Talks are underway for FTA Negotiations and Medical Devices are under consideration for allowing Imports at ZERO % Duty ? We are strongly opposed to this as India is already 70% Import Dependent and of the Top 5 Countries India Imports from Globally, 2 are from EU-Germany & Netherlands (copy enclosed).’
EU Trade Talks Suggested Agenda items for Medical Devices
1- India needs to seek (and focus on) Mutual Recognition Agreement of Regulatory Approval / QMS Certification like ICMED and CDSCO Manufacturing License for enabling Bridge Audits / Fast Tracking / Reduce Audit Costs so these are reduced Non Tariff Barrier which are expensive, cumbersome and time delayed via CE Certification required for Indian exporters to enter into EU Medical Device Market. Alternatively we need a Tit for Tat Policy of inspection of EU factories and verification of Compliance to Indian MDR and Domestic Content in EU by Indian Regulators.
2- We recommend Factory inspection and verification by BIS & CDSCO inspectors for Country of Origin with Value Addition of 35% AND Change of Sub Tariff Headings as both mandatory minimal conditions for protecting Indian Manufacturers.
3- Strong Caution :The Regulatory System for Medical Devices in EU has the system of permitting organizations to label themselves as a ‘Legal Manufacturer’ even if they are not making the product themselves. This was done to allow EU Regulators to make Market Authorised Holder to be responsible & accountable from the Patient Safety perspective but this facility has been abused and lead to Pseudo Manufacturing to thrive in EU as Country of Origin is not insisted upon on the labeling of Medical Devices in Europe & UK, unlike the case of USA & India, which seek labeling of Country of Origin on Unit of Sale.
4- Legal Manufacturers to be kept out of FTA.
We have been given assurance in past for UK-India FTA that ‘Legal Manufacturer’ labelled packages will not enjoy ZERO Duty FTA benefits if the Manufacturer / Exporter is not an Actual Manufacturer and not able to prove that he assembles and manufacture the Medical Device in U.K. with at least 40% value addition. We seek to know how will this assurance be enforced ? That is why need for verification inspection by CDSCP & BIS.
5- In the history of India’s FTA with various Countries, India always at loosing point except our neighbouring Countries like Nepal, Bangladesh, Bhutan, Sri Lanka etc. Other Countries like China, Singapore, Malaysia, Japan, South Korea, Thailand, Argentina, Vietnam, Indonesia, Phillipines, New Zealand etc., have gained much more than India, i.e., they have exported to India in very large quantity than India. Exim Data of FTA Countries enclosed to illustrate our findings.
6- Please find enclosed AiMeD inputs/comments for PSRs for all the lines pertaining to Medical Devices in the context of the European Union as well as Exim Data of Export & Import of FTA Countries for 160 Medical Devices.
We request your good self to analyze thoroughly and kindly protect Indian Manufacturers of Medical Devices to ensure justice to Make in India initiative of Honorable Prime Minister as GoI is giving mixed signals to Indian Investors by incentives like PLI Scheme and Make in India Policy but actually not protecting investments done by restricting
- i) Import of Preowned Equipment
- ii) Expanding GTE Listed Medical Devices even made in India
iii) Permitting Zero Duty imports without Factory inspection of Medical Equipment when already at very low at 7.5% duty rate
