#Budget2021: AiMeD seeks nominal tariff protection for medical devices

New Delhi: One of the leading representatives of domestic medical device companies, Association of Indian Medical Device Industry (AiMeD) has sought a predictable tariff protection policy in the upcoming budget to be presented by the Finance Minister, Nirmala Sitharaman on 1st February 2021.

Listing out his expectations, Rajiv Nath, Forum Coordinator, AiMeD stated, “We seek nominal tariff protection for devices being made in the country and a predictable tariff policy so if capacity is added by a manufacturer there is assured nominal protection. To promote domestic medical device industry that will subsequently reduce India’s heavy reliance on import, the current basic import tariff of 0-7.5% needs to be 15% for medical device (the bound rate under WTO is 40% duty) and on their components to be at least 5% & next year 7.5% as a PMP Make in India enabler. Concessional duty on raw material may be retained at 2.5% for now, for the next 3 years. After GST, imported devices are cheaper by 11% and Indian manufacturers are challenged to compete with Chinese imports in government tenders even for basic products like Syringes, Thermometers, Examination Gloves & Blood Collection Tubes.”

Mr Nath added further, “Consumers are not gainers from low duties if they have to pay the misleading excessively artificially inflated MRP labeled medical devices and have exposure to inconsistent prices that are linked to a volatile currency exchange rate. If consumers interest needs to be protected, capping MRP at 4-5 times import landed price is more effective rather than turning a blind eye to MRP as high as 20-30 times the imports landed price.”

As per AiMeD, the onset of Covid exposed the soft underbelly of healthcare insecurity of India with huge over-dependence on imports and the nation had to undergo a lengthy lockdown as the country prepared to build the health care and medical devices manufacturing infrastructure and inventory of vital covid related medical devices like ventilator, masks, thermometer and PPE kits.

“Indian imports of Rs 42000 Crore that account for 85% of the Medical Device Market are a healthcare security risk that needs to be addressed. It is also an opportunity for Make in India,” concluded Mr Nath.