The cost advantage of the medical devices imported from overseas as against the Indian manufacturers has increased up to 20 per cent in the last one year owing to various fiscal policies and, affecting both the Indian medical devices manufacturers and the consumers, says Association of Indian Medical Devices Industry (AIMED), an umbrella organisation of the domestic medical devices industry in the country.

The imported medical devices, which caters to the 60 to 70 per cent of the Indian market, has received a competitive edge due to the customs duty reduction of 7.5 per cent on imports and 10 per cent cost advantage through difference in the exchange rates. Further, the 2.8 per cent excise duty imposed on the Indian manufacturers has also benefited the importers, making their cost advantage to 20 per cent in a single year, said Rajiv Nath, forum coordinator, AIMED.

Adversely hit by these factors and the increasing competition from the imported products, several of the Indian companies are now resorting to a strategy where they would import the products from countries like China, pack and sterilise in their facilities and sell the products.

"The fiscal policies has provided an additional advantage to the importers of medical devices. It has affected the industry across the board from companies manufacturing basic devices like syringe and needles, hot-water bottles and mercury thermometers to high end devices," said Nath.

The only area where the Indian manufacturers received a relief in the last Union Budget was the production of orghopeadic implants, for which the government has reduced the duty for steel, the raw material for the products, to the minimum level, that is five per cent. However, currently almost 70 per cent of the orthopedic implants are imported to the Indian market, he added.

The importers also enjoy the advantage of cutting cost of manufacturing as many of the products owned by major companies are manufactured in countries like China, where the cost of manufacturing is comparatively very less. The current packaging norms in India does not insist on printing the details of manufacturing sites on medical devices and this has created a misconception among the consumers that these products are manufactured in developed countries.

Moreover, the advantages for the importers are not passed on any relief to the consumers, since the maximum retail price for the products remain high for the imported products, he added. Despite the rules suggesting logical price control on medical device products, the imported devices are sold in a higher prices and the association has been raising its voice against such practices in the past, he added.

The gaps left unaddressed in regulating the medical devices segment, along with such fiscal policies are the major threat to the Indian medical devices industry, which otherwise, has a Rs 15,000 crore domestic market kept open for the industry in India, said Nath.