Union government should give an impetus to indigenous manufacture of medical devices to propel local manufacturing. Skewed import duty versus export tariff structure for medical devices poses considerable hindrances and there is reluctance to invest in this sector.
“A single window specific-time stipulated clearance with less complicated norms for investment could see an uptick in local production. Government should permit a 10-year window on R&D weightage expenditure with a 250 per cent tax rebate for med-tech entrepreneurs. It needs to do way with customs duty for the import of raw material for medical devices and consumables. Besides, slash excise duty on medical equipments. It is a pity that despite the best of technology talent in India, local production has not caught on”, Anjan Bose, general secretary, Nathealth Healthcare Federation of India told Pharmabiz.
Typically, technology installation in a hospital is estimated at 35-40 per cent. Almost 85 per cent of the expenditure is towards import of medical technologies which adds to patient care expenses. Now the government will need to amend this and extend immediate support for local med-tech innovation which should manifest into tangible investments, he added.
The budget 2015 which incorporates incentives for infrastructure, manufacturing, as well as better tax exemptions are intended to improve the investment climate. The country’s bio-med engineering talent, information technology prowess along with the medical expertise could give the country a head start in the field. India is home to top global medical device and equipment manufacturers where local players are seen to compete. There is need to push for cost-effective innovation and manufacture of high quality medical devices and equipment so that local companies could put up a competitive resistance, Bose said.
There is need to lower the cost of establishing a production facility, cut operational expenses and rationalise custom duty anomalies. There is also a depreciation rate of existing equipment which requires novel technology add-ons to keep pace with the medical transformations. Nathealth too is keen to enable an environment to fund long term growth, encourage innovation and promote certification of these indigenous medical devices.
In order to spur local production of medical technologies, government should incentivise entrepreneurs. The country’s technology talent should look at hi-tech innovative products and affordable technologies to transform the healthcare space.
The government will need to stimulate creation of a cluster of medical technology manufacturers, provide them the infrastructure with slew of tax benefits covering customs duty on raw material, excise duty concessions, and income tax holiday which should provide the much-needed impetus to local med-tech manufacture, Bose further said.