AiMeD hails Union Budget-2024; will give a boost to overall economic growth: Rajiv Nath

The Association of Indian Medical Device Industry (AiMeD) on Tuesday hailed the Union Budget-2024 presented by Finance Minister Nirmala Sitharaman in the Parliament today, as visionary and progressive, which will give a boost to the country’s overall economic growth.

In a statement, AiMeD Forum Coordinator, Rajiv Nath said: “The Union Budget-2024 is visionary and progressive. It will give a boost to the country’s overall economic growth. It reflects the determination of Prime Minister Shri Narendra Modi to realize the goal of a US $ 10 trillion economy by 2030 and Viksit Bharat by 2047.”

Mr Nath said: “Nine priorities of the government - productivity and resilience in agriculture; employment and skilling; inclusive human resource and development, and social justice; manufacturing services; urban development; energy security; infrastructure; innovation and research and development; and next generation reforms – will act as a catalyst for the country’s overall economy.”

Talking about the medical device industry vis a vis the Union Budget-2024, Mr Nath said: “We are thankful to the GoI for the reduction in duty on the import of components of X-ray equipment until these get to be produced in India. This enables continuity in investment in efforts to become a manufacturing hub of x-ray equipment globally.”

Mr Nath said that in a representation to Arunish Chawla, Secretary, DoP, dated January 19, 2024, AiMeD had raised the issue of increase in custom duty and removal of benefits for import of x-ray tube and flat panel detector under the Phased Manufacturing Programme (PMP). Since there are no domestic manufacturers available for these two critical components, the relief from the government is appreciable, added Mr Nath.              

“We at AiMeD had, however, been hoping that the recommendations of Department of Pharmacy (DoP), which were backed by DGHS, would have helped on nominal duty increase on at least those medical devices that India had substantial manufacturing capacity as demonstrated during Covid-19 pandemic times,” said a despondent but hopeful Rajiv Nath.

“During Covid-19 pandemic, Indian medical devices showed its resilience in manufacturing syringes, masks, oximeters, oxygen concentrator and certain testing kits while the so-called world leaders were caught unawares. Removal of nil duty exemption on some of these medical devices would have acted as a further enabler for Make in India drive and enhance our global competitiveness,” added Nath.

It is worth mentioning that in a Pre-Budget memorandum, AiMeD had urged Finance Minister Sitharaman to consider a strategic hike in customs duty on medical devices to a nominal 10-15 per cent to foster a more balanced trade environment, encouraging domestic manufacturing and reducing reliance on imports, which currently still constitutes a staggering 70 per cent of the sector.
 
“The imports of medical devices are consistently over Rs 61,000 crore for the last three years and regretfully this year have increased by 13 per cent to Rs 69,000 crore,” said Nath, while flagging the issue of prevailing inverted duty structure.
 
To address this, AiMeD has proposed the implementation of a 5 per cent health cess on custom duty for the remaining medical devices as this was earlier applied to a limonite’s medical devices and this health cess was used to fund resources for Ayushman Bharat.
 
Another pivotal aspect highlighted by AiMeD was the necessity for trade margin capping.
 
“By monitoring the Maximum Retail Price (MRP) of imports, the Government will curb the excessive mark-ups often seen in the market. This measure will make medical devices more affordable and accessible to the Indian populace, ultimately benefiting public health as consumers are affected not by import duty protection as much as by artificially inflated MRP of medical devices,” he said.
 
Referring to one of the core focusses of National Medical Devices Policy-2023 to reduce import dependence by 70 per cent and make India a global manufacturing hub of medical devices, Mr Nath said that the Central government must also consider income tax benefits, specifically tailored for capital expenditure (CAPEX) and research and development (R&D) investments within the medical devices sector.
 
“Such fiscal incentives are crucial for fostering innovation, enhancing production capabilities, and propelling India towards self-reliance in medical technology,” he said, adding that AiMeD suggestions are not just about immediate economic adjustments but are a strategic blueprint aimed at revitalising India's medical device industry with huge global competitiveness potential and a rising export graph of 32000 Cr last year.