Budget 2024: The Association of Indian Medical Device Industry (AiMeD) has urged the Centre to address the soaring import bill, which currently stands at over Rs 63,200 crore.
In a letter to the Finance Minister Nirmala Sitharaman, AiMeD on behalf of the Indian Medical Device industry requested to consider the Medical Devices Industry Proposal for Union Budget 2024-25 to help curb the over 80 percent import dependence.
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The body said that last year the Medical Devices Industry Proposal for Union Budget 2023-24 was not considered even though the Department of Pharma has been supporting it.
“It’s disheartening to note that imports are still on an increasing uptrend of over 21% over the last 12 months at Rs. 61,000 Crore compared to Rs. 50,000 Crore in the same period of preceding 12 months. Policy makers need to review the steep 33% increase in imports from the USA (the dominant exporting country to India) of Rs. 10858 Crore over Rs. 8186 Crore in 2021-22, Germany up at Rs. 6188 Crore from Rs. 4855 Crore in 2022, by a steep 27%.Imports from the Netherlands also increased by 20 percent to Rs 3552 crore in 2022-23 from Rs 2956 crore in 2021-22, whereas imports from China increased by 11 percent at Rs. 10,384 crore in 2022-23 from Rs. 9374 crore in 2021-22 and Singapore by 15 percent from Rs. 4800 crore to Rs. 5520 crore,” Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD) said in a statement.
Nath also revealed that unless policies of consumer electronics and mobile phone manufacturing by levy of nominal 15% duty are replicated to Medical Devices, India will continue to be more than 80% import-dependent at zero to 7.5% duty rates.
“It’s not that we are not competent, in many products India is globally competitive but sadly not in our own country. Also consumers are protected by MRP capping and price controls post monitoring and not by making them dependent on imports at zero duties with MRP at over 10-20 times of Imports Landed price,” he said.
Nath also highlighted the need to reschedule the duty revision of Key Components of X-Ray Equipment that had been planned under a Phased Manufacturing Plan (PMP) as manufacturing of these components has not yet started and the duty increase is now creating an Inverted Duty Structure making India X-Ray equipment manufacturer non-competitive.
AiMeD has the following Budget recommendations to end the 80-85 percent import dependence forced upon India and an ever-increasing import bill of over Rs. 63,200 crore:
- Increase in Custom Duty to a nominal 10%-15% Duty and a predictable tariff policy
- Correction of Inverted Duty by levying Health Cess of 5% custom duty on balance Medical Devices (this was not earlier applied to all HS Codes). Cess is used for Ayushman Bharat.
- Trade Margin Capping by monitoring MRP of Imports (if over 10 – 20 times of CIF)
- Income Tax benefits for project investments in Medical Devices Manufacturing.
As per GTRI report of August 2023, the Indian medical devices industry can expand from $12 billion to $50 billion by 2030, reducing import reliance to 35% and boosting exports to $18 billion.
“Supporting policies are needed so that Indian Medical Devices Industry can make quality healthcare accessible and affordable for the common masses, aim to place India among the top five medical devices manufacturing hubs worldwide and help end the 80-85 per cent import dependence forced upon us and an ever-increasing import bill of over 63,200 Crore,” the body stated.
AiMeD’s recommendation aligns with the Indian government’s ‘Atmanirbhar Bharat’ (Self-reliant India) initiative and underscores the importance of fostering a robust domestic medical device industry as stated in the National Medical Device Policy of 2023, it added.
