Union Budget 2018: Medical device makers disappointed

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New Delhi | Published: February 2, 2018 6:54:55 PM

Union Budget 2018: Medical device manufacturers have been left disappointed by the Budget 2018-19, saying their concerns have not been addressed. Although they welcomed Finance Minister Arun Jaitley's mega healthcare proposal saying it was a step in the right direction.

FM Arun Jaitley presented Union Budget on 1st February.Budget 2018: Under the current ecosystem more than 70 per cent of medical devices have to be imported from abroad, Choudary said. (Reuters)

Union Budget 2018: Medical device manufacturers have been left disappointed by the Budget 2018-19, saying their concerns have not been addressed. Although they welcomed Finance Minister Arun Jaitley’s mega healthcare proposal saying it was a step in the right direction, domestic medical devices makers said promised reforms and anticipated conducive measures to boost local manufacturing have not happened. On the other hand, associations such as Medical Technology Association of India (MTaI) and AdvaMed said the government should not dis-incentivise technical innovation by medical device manufacturers. “It is frustrating that against our expectations, the government has not included any measures for promoting growth of $10 billion Indian Medical Device market in the Budget 2018-19 as has been done for consumer electronics, food processing, footwear, etc,” Association of Indian Medical Device Industry (AiMeD) Forum Coordinator Rajiv Nath said.

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Though the Union Budget 2018 focus on providing universal healthcare services is a step in the right direction for building a healthy nation, the domestic industry is left in the lurch by not giving it necessary protection against imports, he added. “Nominal tweaking in custom duty applicable to medical devices is urgently needed to address Rs 27,300 crore import bill and 70-90 per cent import dependency,” Nath said. One of the important steps the government needs to take is to increase the basic import duty on medical devices in the range of 10-15 per cent to make manufacturing more viable than importing, and give nominal protection to investors, he added. Taking a contrarian line, Medical Technology Association of India (MTaI) Chairman & DG Pavan Choudary said: “While access to basic healthcare is an important determinant of Universal Healthcare, another critical factor is quality of healthcare”.

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The latter requires access to advance healthcare technology for best health management of patients. The government should have looked at incentivising import of advance medical devices into the country by bringing down the customs duty, he added. Under the current ecosystem more than 70 per cent of medical devices have to be imported from abroad, Choudary said. He further said a balanced approach to reduce cost to patient is trade margin rationalisation for distributors, gradation in pricing thereby allowing a higher price bracket for superior medical devices and lower customs duty. There is also a need to undo the ‘un-nuanced’ price control imposed by NPPA as it is leading to unintended consequences on healthcare ecosystem without any significant reduction in the cost of patients, he added.

Also read: Budget 2018: Few positives for the healthcare sector

Advanced Medical Technology Association (AdvaMed) also said: “We are truly encouraged with the Union Budget’s focus on healthcare and the government’s continued commitment towards achieving the long-term goal of universal health coverage”. While the Union Budget 2018 this year has exhibited many positives, the industry continues to urge the government of India to promote an enabling environment for the medical devices sector that is conducive to innovation, patient access and patient choice, it added. AdvaMed said there is a need for a more scientific approaches that facilitate differential pricing for innovative medical technologies.

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