AiMeD Calls For Separate
Department, Flat GST At 12%, Among Other Measures In
Upcoming Union Budget
The Association of Indian
Medical Device Industry (AiMeD), in its recommendation to
the Union Budget for 2023-24, has demanded to the Central
government to bring down the Goods and Services Tax (GST)
to a flat 12 per cent.
Besides, the AiMED has also asked for more support from
the government to the domestic medical devices
manufacturing industry to reduce the import dependence,
which is at present to the levels of 80-85 per cent. Other
demands include setting up a separate department for
medical devices, collecting more granular import data,
etc.
Rajiv Nath, forum coordinator of AiMeD, said that the
industry is more than hopeful and positive that the
government will act upon the request of the Indian Medical
Device Industry for a Separate Department of Medical
Devices. This key strategic need has also been recommended
by the Parliamentary Committee on Health.
AiMeD also urged the government to consider 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.
"As done for mobile phones, the Government should protect
the manufacturing base in India by increasing Basic Custom
Duty on import of medical devices to at least 10 to 15%
from current 0- 7.5% duty though WTO Bound rate is mostly
40%. Due to such low custom duty India is importing Rs.
63,200 crore of medical devices and is over 80% import
dependent. This 80% can be reduced to below 30% with
correct policies as done for mobile phones and consumer
electronics," he said.
As part of its budget recommendation, the Association said
that instead of 18% GST applicable on some medical devices
that are not luxury goods, the GST needs to be a flat 12%
for all medical devices. Also reducing GST to 5% is making
Indian products noncompetitive to imports as then
manufacturers are unable to keep reduced ex-factory prices
based on lower input costs net of GST. Commenting on the
need for trade margin monitoring, the Association said,
"The purpose of low duty was to help
consumers get affordable access to devices. This objective
is not realised if consumers will be charged a high
maximum retail price (MRP) of 10 to 20 times import landed
price. Customs recording of MRP on Bill of Entry will
assist to bring in data generation for policy making by
evidence of a Trade Margin Rationalisation
Policy for the manufacturer/importer so that there is a
capping of maximum 4 times on the Ex-factory price and on
import landed price of Indian distributor (at first point
of sale viz. when GST/import duty is 1st levied on
entering into the market)," it added.
It said that 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. China remained the top import source for India
as medical device imports from China grew 48 per cent from
Rs. 9,112 crore in 2020-21 to Rs. 13,538 crore in 2021-22.
Imports from the US also increased steeply by 48 per cent
to Rs. 10,245 crore in 2021-22 from Rs. 6,919 crore in
2020-21. The value of medical devices from China was
nearly the same as the combined value of imports from
Germany, Singapore and the Netherlands in 2021-22.
It has led to domestic industry players shutting shop as
the local industry cannot compete with cheaper Chinese
imports. This is a lost opportunity for Indian
manufacturers to grow & compete globally but saw with
dismay dumping of Chinese imports when duties were slashed
to zero per cent. The overall trade deficit with China
widened to a record $72.9 billion in 2021-22.
If the government implements even 70% of the
recommendations recently made by the Parliamentary
Committee on Health, we can see a reversal on the import
dependence and
growth of the domestic industry which will bring in
affordable wider access to medical devices leading to
better healthcare delivery. We are very optimistic and
hope that we can realise our vision to be among the top
five manufacturing hubs in the world for medical devices.
"The Indian medical devices industry has the potential to
reach $50 billion by 2030. We request kind consideration
of the Government of India for encouraging domestic
manufacturing to be sustainable in the long term for
becoming AtmaNirbhar and to address National Healthcare
Security needs exposed at the onset of Covid and for Ease
of Doing Business," said the Association in a statement.
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DoP Designates OSD To Carry
Out Works To Set Up Export Promotion Council For Medical
Devices
In an effort to initiate its
actions towards setting up of the Export Promotion Council
for Medical Devices (EPC-MD), the Department of
Pharmaceuticals (DoP) has designated an official from the
Engineering Export Promotion Council (EEPC) India as the
Officer on Special Duty (OSD).
The DoP said that it initiated necessary action towards
establishing the EPC-MD, and has designated Pallavi Saha,
joint director of EEPC India as the OSD for the proposed
Council, to be nodal officer of contact to carry out all
the actions towards establishing EPC-MD on consultation
with the Department. The arrangement is till a regular
functionary is appointed for the EPCMD, it added.
It may be noted that in September this year, the
Department of Commerce (DoC) has approved setting up a
separate Export Promotion Council for the medical devices
sector under the administrative control of the Department
of Pharmaceuticals to help exporters in promoting their
products in international markets. The medical devices
industry welcomed the move and the strategic step will go
a long way in accelerating the exports of medical devices
from India.
The creation of the EPC for medical devices is approved by
the DoC with one time waiver of the condition in
guidelines on the subject, stipulating creation of an
Export Promotion Forum initially, before its upgradation
as EPC. According to the approval, the Council will be
headquartered in YEIDA, Greater Noida, Uttar Pradesh with
regional offices in Andhra Pradesh (in AMTZ, Visakhapatnam)
and Telangana (in Hyderabad). The headquarters will be set
up with initial funding of Rs 3 crore, in
free office space of around 5,000 sq.ft area at the
upcoming Medical Devices Park Common Facility Centre in
Greater Noida, and required secretarial staff to run the
Council.
The Council’s administration and management will be
through the Committee of Administration with elected and
nominated members. The nominated members shall be from
Department of Pharmaceuticals, Department of Commerce,
Department for Promotion of Industry and Internal Trade (DPIIT),
Ministry of Health and Family Welfare, Central Drugs
Standard Control Organisation (CDSCO), Chief Executive
Officers or Managing Directors of major medical device
clusters or parks especially, including the MD of Andhra
Pradesh MedTech Zone and chief executive officer of
Hyderabad Pharma City etc.
The industry said that it is a great news, a big boost to
Indian Medical Devices Manufacturing. The long sought and
requested Medical Devices Exports Promotion Council is
finally sanctioned to be created under the aegis of DoP,
Government of India. This strategic step will go a long
way in accelerating the exports and manufacturing growth
of the medical devices sector, they said.
"We are excited that the long-sought and requested Medical
Devices Export Promotion Council is finally taking shape
under the aegis of DoP. This strategic step will go a long
way in accelerating the exports and manufacturing growth
of the medical devices sector to help realise our shared
vision of India becoming a global manufacturing hub of
medical devices," said Rajiv Nath, Forum Coordinator of
Association of Indian Medical Device Industry (AiMeD).
An Office Memorandum in September further stated that the
Chairman and Vice Chairman of the Council shall be elected
from members who are manufacturers or processors of
medical devices and other members, including from merchant
exporters, shall not be eligible for the post. While the
final decision on the jurisdiction will be taken by the
CoA, the office in Visakhapatnam is expected to have
jurisdiction over Andhra Pradesh, Orissa, Tamil Nadu and
Chhattisgarh, the office in Hyderabad will have
jurisdiction over the States of Telangana, Karnataka,
Kerala and Maharashtra. The headquarters will serve the
requirements of the member exports pan India till the
regional facilities come up.
The entire range of medical devices goods and services
could be broadly qualified into sub-groups named as
panels, such as disposables, consumables, orthopaedic
implants, IVD equipment and reagents and surgical
instruments. There would also be panels for policy
advocacy, technology upgradation and transfer and
start-ups.
“The proposed council shall, inter alia, help exporters in
promoting their products in international markets, through
various promotional activities including organising/participating
in international trade fairs, buyer-seller meets, RBSM in
India, etc., in line with the foreign trade policy (FTP)
of India,” said the Office Memorandum. The Council may
also organise awareness programs for dissemination of
information regarding assistance available for the MSME
exporters under various government schemes. EEPC India
will provide assistance and guidance to the new Council in
discharge of its function for a period of five years.
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