Union Budget 2023 | Disappointing Budget for Medical Devices Industry | Budget Reactions
Rajiv Nath on behalf of the Indian Medical Devices Industry expressed deep disappointment and anguish over the Union Budget 2023 giving “cold shoulder” to the Indian medical device industry.
His reactions:
It is highly disheartening that against Industry’s expectations and assurance by the various Govt. departments, the government has not announced any measures to help end the 80-85% import dependence forced upon India and an ever-increasing import bill of over Rs. 63,200 Crore.
Though our honourable Prime Minister urges India to become Atmanirbhar in Medical Devices yet the medical devices imports continued to grow at an “alarming” level by 41 per cent in FY22. India imported medical devices worth Rs 63,200 crore in 2021-22, up 41 per cent from Rs 44,708 crore in 2020-21, as per data from the Union Ministry of Commerce and Industry.
Sadly, the Govt. didn’t even implement the recommendations made by the Parliamentary Committee on Health. If the Govt. implements even 70% of the recommendations, we could have seen a reversal on the import dependence and growth of the domestic industry.
It is very painful to see the plight of domestic industry players shutting shop as the local industry cannot compete with cheaper Chinese imports. Imports of Medical Devices from China went up by nearly 50% last year from 9000Cr Rs. to 15000 Cr Rs. on account of low duties and convenience to import. These are the same domestic manufacturers, when imports got disrupted during COVID-19 crisis, the Govt. relied heavily on to meet the rising demand of essential Covid items for the country pushing the Indian medical devices sector to become self-reliant.
The Indian Medical Devices Industry’s expectations were:
- Separate Department of Medical Devices.
- Graded increase of custom duty to 10-15% from current zero to 7.5%
- Shifting from an 8 Digit HS Code to a 10 Digit HS Code as done by USA and Europe to give more granular data for enabling better analysis and policy making
- Reduced GST on 18% where being applied to 12% as Medical Devices are not luxury goods.
- Trade Margin Monitoring: The purpose of low Duty was to help consumers get affordable access to Devices. This objective is not realized if consumers will be charged a high MRP of 10 to 20 times import landed price.
We had been hoping that this will be a Make in India push budget for an Atmanirbhar Bharat but we, The Indian Medical Device Industry are disheartened not to hear any impactful announcements for encouraging Make in India of Medical Devices in India.
The only positive announcement was plans for skilling of manpower for manufacturing of Medical Technologies.
The Indian medical devices industry has the potential to reach $50 billion by 2030. We request kind consideration of Govt. of India for encouraging domestic manufacturing to be sustainable in long term for becoming AtmaNirbhar and to address National Healthcare Security that was severely exposed at the onset of COVID leading to lockdown of country as Govt n entrepreneurs scrambled to produce COVID19 critical medical devices as the import dependent supply chains got disrupted.
We can only be hopeful that the fine print of the Union Budget would possibly act upon our recommendations on levy of cess to enable nominal protection for investors and commercial viability to produce in India which is challenging if basic custom duty is 7.5% or lower; to realise our vision to be among the top 5 Manufacturing Hubs in the world for medical devices and align this our PMs vision of being Atmanirbhar.
