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Mixed response from medical devices industry on Budget 2023-23

Our Bureau, New Delhi
Thursday, February 2, 2023, 08:00 Hrs  [IST]

The medical devices industry has come out with mixed response on the budget, with the domestic industry heavily coming down on the government for not addressing the issues raised by the industry, while the research-based medical technology firms expressed that some of the announcements related to the skill development and research may help the industry going forward.

The Association of Indian Medical Device Industry (AiMeD), the umbrella association of Indian manufacturers of medical devices, has expressed deep disappointment and anguish over the Union Budget 2023 giving cold shoulder to the Indian medical device industry.

"It is highly disheartening that against Industry’s expectations and assurance by the various government departments, the government has not announced any measures to help end the 80-85% import dependence forced upon India and an ever-increasing import bill of over Rs. 63,200 crore," he said.

Though the Prime Minister Narendra Modi urges India to become Atmanirbhar in Medical Devices yet 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.

"Sadly, the government didn’t even implement the recommendations made by the Parliamentary Committee on Health. If the government implements even 70% of the recommendations, we could have seen a reversal on the import dependence and growth of the domestic industry," he said. "The only positive announcement was plans for skilling of manpower for manufacturing of medical technologies,” he averred.

Pavan Choudary, chairman, Medical Technology Association of India (MTaI), an association of research-based medical technology companies, said, "It is also reassuring that the government is working on reducing the current gaps in availability of skilled healthcare workers. The finance minister’s announcement on dedicated multidisciplinary courses for medical devices would ensure availability of skilled manpower who can engage fluently with rapidly innovating medical technologies. To supplement this move, we also hope that research institutes and training centres will continue to get access to the latest medical technology, unhampered by restrictions in public procurement norms."

"The 2023-24 Union Budget has taken some crucial initiatives to increase the Capex outlay by Rs. 10 lakh crore, which makes it 3.3% of the country’s GDP. We hope that the benefit is also received by the healthcare sector which is in need of a big uplift in its infrastructure, especially in Tier 2 & 3 cities," he added.

Sanjay Bhutani, director, MTaI said, “The Union Budget 2023 has tried to ease the tax burden on common man allowing for consumer spend growth, while managing the overall fiscal deficit in check. It also focuses on digitization initiatives, priority sector spending, agriculture support, easing compliances and reducing litigation which is a welcome approach. Emphasis has been given on infrastructure development with CAPEX growth at 33% aiming to facilitate higher private sector investment and fiscal deficit estimated at 5.9%. That said, more could have been done towards decreasing healthcare costs for patients, as the long standing demand of the healthcare industry to zero rate the medical services under GST has not been implemented”.

Commenting on the demands put forward by the Indian medical devices industry, Nath said that the industry has been expecting separate Department of Medical Devices, graded increase of custom duty to 10-15% from current zero to 7.5%, 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, reduced GST on 18% where being applied to 12% as medical devices are not luxury goods and trade margin monitoring since the purpose of low duty was to help consumers get affordable access to devices and this objective is not realized if consumers will be charged a high MRP of 10 to 20 times import landed price.

"It is very painful to see the plight of domestic industry players shutting shop as the local industry cannot compete with cheaper Chinese imports. Imports of medical devices from China went up by nearly 50% last year from Rs. 9,000 crore to Rs. 15,000 crore on account of low duties and convenience to import. These are the same domestic manufacturers, when imports got disrupted during Covid-19 crisis, the government relied heavily on to meet the rising demand of essential Covid items for the country pushing the Indian medical devices sector to become self-reliant," he observed.

"We had been hoping that this will be a Make in India push budget for an Atmanirbhar Bharat but we, The Indian medical device industry are disheartened not to hear any impactful announcements for encouraging Make in India of Medical Devices in India," said Nath. The Indian medical devices industry has the potential to reach $50 billion by 2030. He requested the central government for encouraging domestic manufacturing to be sustainable in long term for becoming Atmanirbhar and to address National Healthcare Security that was severely exposed at the onset of Covid leading to lockdown of country as government and entrepreneurs scrambled to produce Covid-19 critical medical devices as the import dependent supply chains got disrupted.

“We can only be hopeful that the fine print of the Union Budget would possibly act upon our recommendations on levy of cess to enable nominal protection for investors and commercial viability to produce in India which is challenging if basic custom duty is 7.5% or lower; to realise our vision to be among the top 5 manufacturing hubs in the world for medical devices and align this our PMs vision of being Atmanirbhar” concluded Nath.

Arnab Basumallik, director-Government Affairs, Edwards Lifesciences, said, “Being an innovation-driven and patient-focused organisation, we welcome government’s plan to emphasize on clinical research for new pharmaceutical products and medical device, in premium medical research institutes like ICMR, in a public private mode and segregating separate funds for initiating research on artificial intelligence for medical technologies. The aim to eradicate sickle cell anaemia by 2047 through timely disease detection and screening is a commendable step towards fighting preventable medical conditions."

"We hope that this will pave the way for similar efforts in future for awareness on timely screening for cardiovascular and valvular diseases and other non-communicable diseases such as cancer. We also hope that the proposal to increase the budgetary allocation for infrastructure by 33% will also be utilized in establishing more medical and nursing colleges to help build a more robust health ecosystem for the nation. Along with it the inclusion of new generation innovative medical device courses in key institutions will help prepare the upcoming batch of healthcare practitioners to make the best use of available medical technologies for treating the patients,” he added.


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