Industry expressed huge disappointment in the recent budget, stressing that the government has time and again failed to address the demands of the sector, necessary for its survival. Questioning the government, experts raised concern on how do they plan to realize the ‘Make in India’ campaign without providing appropriate budgetary and regulatory support to the industry to spur the initiative?

Though medical device was one of the flagship sectors under the Make in Indian mission, the budget has done nothing specific to give further boost manufacturing of medical device in the country or reduce humungous import dependency in this sector after the recent January 19 announcement for some medical devices. In fact, the overall push or stimulus for manufacturing in general has suddenly disappeared in thin air, pointed out Rajiv Nath, forum coordinator, AIMED.

Industry fears that this lackadaisical attitude is going to impact the industry especially the three mega medical device parks coming up in Andhra Pradesh, Maharashtra and Gujarat, as investors will shy away from investing in it making it less commercially viable.

He stressed that despite much hype and expectations, there is nothing specific to further boost medical device manufacturing in the country. If the government is serious about ‘Make in India’ it can still include some minor legitimate demands of the sector which will go a long way in making medical device industry internationally competitive. Withdrawal of concessional duty notification of basic duty and special additional duty of medical devices and reverting of duty on the items covered under HS 90.27, 30.06 and 38.22 is a must for this.

Similarly, he reinstated that the imposition of 10 per cent basic duty on HS 90.27 and HS 30.06 which mainly covers diagnostics-equipment and reagents is also needed. Reduction of duty on raw materials to produce these devices and diagnostics to 2.5 per cent, will also go a long way in helping the industry.

In addition, the government also needs to think of consumers, thus the Centre should consider introducing a tax innovation structure of stalling artificial inflation of MRP by imposing a 2 per cent CVD on MRP based criteria with abatement of at least 50 per cent (in case 1 per cent excise duty on MRP is not possible) to have a disincentive to importers from passing on above increase to the consumers.

“This move is essential as it will make Indian medical devices including diagnostics competitive for all, while also safeguarding consumers from exploitation. Government needs to realize that medicines are just one component of healthcare cost and very often not its major component. Medical devices can be equally if not more as critical a part of overall healthcare cost as medicines and diagnostics. If the government had focused on giving a major boost to medical device manufacturing in the country and also ensured a robust MRP regime, then it would have served many purpose with one shot – i.e. lower the overall healthcare cost and lead to sharp reduction on import dependency,” he added.