The medical devices industry hailed various measures announced in the Union Budget 2024-25, including the full exemption of customs duty for some of the X-ray machine components and emphasis on skilling which is expected to support healthcare skilling.

“We are thankful to the GoI for the reduction in duty on the import of components of X-ray equipment until these get to be produced in India. This enables continuity in investment in efforts to become a manufacturing hub of x-ray equipment globally,” said Rajiv Nath, forum coordinator, the Association of Indian Medical Device Industry (AiMeD).

"The Union Budget-2024 is visionary and progressive. It will give a boost to the country’s overall economic growth," he added.

"Custom duty reduction on finished goods is a pending demand. Even though that has not happened, the reduction of custom duty on X ray machine components is perhaps reflective of the realisation that only those products which we can manufacture in the short to mid-term can be protected without triggering adverse unintended consequences," said Pavan Choudary, chairman, Medical Technology Association of India (MTaI).

"We do hope that tariff barriers on finished MedTech products which are not import substitutable in the short to mid-term, will eventually come down. This would further patient affordability and foster competition and quality,” he added.

As healthcare skilling benefits substantially from the government’s emphasis on skilling, this is a welcome focus area too. Healthcare skilling help the country tap the lucrative global market as well. Currently a whopping 24 per cent of foreign workforce in healthcare in the world is from India! And the government targets exporting 300,000 healthcare workers (including doctors, nurses, technicians) annually.

"Train in India for the world needs international MedTech’s engagement and we stand ready to provide it," said Choudary. Foreign Direct Investment (FDI) brings most of the investment in the MedTech sector and FDI scaled a new high of $502 million in 2023.

Commenting on requirements of the industry that were not addressed, Nath said that in a representation to Arunish Chawla, secretary, Department of Pharmaceuticals, dated January 19, 2024, AiMeD had raised the issue of increase in custom duty and removal of benefits for import of X-ray tube and flat panel detector under the Phased Manufacturing Programme (PMP).

Since there are no domestic manufacturers available for these two critical components, the relief from the government is appreciable, he added.

However, he maintained that the Association has been hoping that the recommendations of the Department of Pharmacy (DoP), which were backed by DGHS, would have helped on nominal duty increase on at least those medical devices that India had substantial manufacturing capacity as demonstrated during Covid-19 pandemic times.

“During Covid-19 pandemic, Indian medical devices showed its resilience in manufacturing syringes, masks, oximeters, oxygen concentrators and certain testing kits while the so-called world leaders were caught unawares. Removal of nil duty exemption on some of these medical devices would have acted as a further enabler for Make in India drive and enhance our global competitiveness,” added Nath.

In a Pre-Budget memorandum, AiMeD had urged Finance Minister Sitharaman to consider various measures including a strategic hike in customs duty on medical devices to a nominal 10-15 per cent to foster a more balanced trade environment, encouraging domestic manufacturing and reducing reliance on imports, which currently still constitutes a staggering 70 per cent of the sector.

Pharambiz News