The recent Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, has drawn both praise and measured disappointment from the Association of Indian Medical Device Industry (AiMeD). While the budget is broadly seen as progressive and aligned with Prime Minister Modi’s vision of a $10 trillion economy by 2030, its impact on the medical device sector is nuanced.
Positive Steps and Missed Opportunities
AiMeD Forum Coordinator Rajiv Nath commended the government’s decision to reduce import duties on X-ray equipment components. This move is expected to support ongoing efforts to establish India as a global manufacturing hub for such equipment. However, Nath expressed disappointment that the budget didn’t include anticipated duty increases on medical devices where India has demonstrated strong manufacturing capabilities, particularly during the COVID-19 pandemic.
The Persistent Import Challenge
Despite India’s growing manufacturing prowess, the medical device industry continues to grapple with high import dependence. Imports have risen by 13% to Rs 69,000 crore, highlighting the need for stronger measures to boost domestic production. AiMeD had proposed a strategic increase in customs duties to 10-15% to create a more balanced trade environment and reduce import reliance.
Proposals for Future Growth
To address these challenges, AiMeD has put forth several proposals:
- Implementation of a 5% health cess on customs duty for certain medical devices to fund healthcare initiatives like Ayushman Bharat.
- Introduction of trade margin capping to make medical devices more affordable and accessible.
- Income tax benefits for capital expenditure and R&D investments in the medical device sector to foster innovation and enhance production capabilities.
These suggestions aim to not only boost the domestic industry but also to improve India’s global competitiveness in medical technology.
Looking Ahead
While the budget has taken some positive steps, industry leaders believe more can be done to fully realize India’s potential in medical device manufacturing. The government’s focus on nine key priorities, including manufacturing services and innovation, provides hope for future developments that could benefit the sector.
As India strives to reduce its import dependence and become a global manufacturing hub for medical devices, continued dialogue between the industry and government will be crucial. The medical device sector, with its demonstrated resilience and growth potential, remains a key player in India’s journey towards economic advancement and self-reliance in healthcare technology.