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With the Union Budget 2025 skipped mentioning medical devices sector directly or addressing the industry demands including custom duty structure, the industry associations said that they are disappointed and expressed hope that the fine print will have some favourable decisions for the sector.
Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry (AiMeD), while appreciating the overall macro-economic and policy direction measures announced in the Union Budget, which will strengthen the economy and propel the GDP growth, expressed disappointment over the fact that there is no mention of any investment promotion measures for the imports dependent sector in the main speech and had hoped that there will be some measures to boost the sector in the fine print.
“The Industry is disappointed that expectations of the medical devices sector and many of which had been supported by the Department of Pharmaceutical too as an investment enabler under the National Medical Device 2023 policy finds no mention in the speech," he said.
"We were hoping to see the finance minister speak about medical devices as make in India enabler and address the 70% import dependence due to inadequate tariff protection with duties at zero to 7.5% in most cases and an ever-rising imports bill that is expected to cross Rs. 75,000 crore this year," he averred.
Pavan Choudary, chairman, Medical Technology Association of India (MTaI), while lauding the initiatives including day care cancer centres, human resource development, among other announcements said, "We are reading the fine print and hope to see some reductions in customs duties on medical devices which are not import substitutable in the near term."
Jatin Mahajan, secretary, Association of Diagnostics Manufacturers of India (ADMI), while appreciating the government for putting more money in the hands of the individuals through income tax exemption for earnings up to Rs. 12.75 lakh for individuals, said that the Budget does not specifically address the IVD-MedTech industry and any of its numerous grouse-points.
"Thus, there is no direct positive impact on the IVD-MedTech industry," he said.
The Budget has not touched various aspects including GST rates for IVD-MedTech sector, inverted duty correction to lower raw material import taxes, dedicated technology transfer grants for MedTech innovation, fast-track approvals for new diagnostic technologies, subsidised loans for domestic MedTech manufacturers, tax incentives for preventive health check-ups under Section 80D, import duty waivers on critical IVD equipment components, among others, he added.
Nath said that the Indian medical devices industry has been expecting the budget to address various demands such as increase in custom duty to a nominal 10% to 15% (and as a Predictable Tariff Policy), correction of inverted duty by levying Health Cess of 5% custom duty on balance Medical Devices (In 2020 this was applied to only 5 of the 4 Digit HS Codes and balance 22 HS Codes are pending), trade margin capping by monitoring MRP of Imports (if found over 10 to 20 times of CIF price), and income tax benefits for CAPEX and R&D investments in Medical Devices, among others.
The government’s initiatives, including the establishment of five major skill development centres, would help meet the target of 300,000 healthcare workers India aims to export annually, said Choudary.
Also, simplifying visa procedures for medical tourists is a timely priority to cope with the shocks that current geo-politics, especially with respect to Bangladesh, has given to our medical tourism market. Overall this cross-border flow of patients and healers will expand the market and create more proficient healthcare workers, he added.
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