Manufacturers of medical devices seek MRP monitoring of imported devices

Medical device manufacturers have called for monitoring of maximum retail prices (MRP) of imported medical devices into India so that domestic consumers can get affordable rates.

In its pre-budget memorandum to the Union Ministry of Finance, the Association of Indian Medical Device Industry (AiMeD) has highlighted that the government’s efforts to reduce import duty on devices goes in vain since consumers/patients pay “10-30 times the landed price of imported devices”.

AiMeD, an umbrella association of Indian manufacturers of medical devices, said that the current scenario is “against Indian manufacturers in every way”. After the applicable GST, imported devices become cheaper by 11%, and Indian manufacturers were challenged to compete with them for government tenders.

Indian manufacturers said that they had adequate domestic production to cater to 1.4 billion people, but 70% of the market for medical devices unfortunately depended on imports, which could be avoided with reasonable protection for the domestic industry.

Stating that Indian manufacturers were forced to become importers as it was cheaper and more convenient, the association said importers availed GST input credit, which was not the case in the pre-GST period.

The Department of Pharmaceuticals, which supports AiMeD’s stand, has said that Indian manufacturers were at a disadvantage by “12%-15% on account of various factors”, including lack of adequate infrastructure, high cost of finance, inadequate availability of power, limited design capabilities, and low focus on R&D and skill development.

“Currently, there is no gain to the consumers from NIL duty as affordability is linked to MRP labelled on product as that is what has been charged to them. Thus, the device manufactures have asked for withdrawal of concessional duty notification that reduce duty to 0-7.5% and seek 5%-15% duty on imports of medical devices,’’ the AiMeD said.

Rajiv Nath, forum coordinator, AiMeD, in a letter to the Finance Minister Nirmala Sitharaman, noted that, as assured by the Central government previously, there is a need to remove the ‘NIL duty’ exemption notification, which had rendered the business non-viable for Indian manufacturers, and motivated several of them to become “importing traders” or “pseudo manufacturers”.

AiMeD also said the current duty structure was not aligned with the Centre’s ‘Make in India’ vision.

“To promote the domestic medical device industry that will also enable exports and subsequently reduce India’s heavy reliance on imports, the current basic import tariff of 0-7.5% is not enough. Imports are consistently above ₹61,000 crore for the past three consecutive years and even jumped 13% in the last fiscal (2023-2024) to reach ₹69,000 crore,” the AiMeD said.

AiMeD said that while there is an ecosystem for nurturing start-ups and incubators in India now, once they create a commercial product and had to grow into MSMEs (micro, small and medium enterprises), the real challenge they faced was the “12%-15% disabilities”. They were also stonewalled by buyers, who not only sought lower costs but higher MRP-based trade margins, which were charged to patients.