KTR appeals to GoI to take favorable action on issues faced by medical devices industry

Stressing the need to strengthen the medical devices industry in India, Industries Minister K.T. Rama Rao wrote a letter to Union Minister for Commerce and Industry, Piyush Goyal raising critical issues faced by the industry and seeking favorable action.

Stating that the 20th-anniversary edition of BioAsia concluded successfully in February this year, KTR said that a roundtable meeting on medical devices was conducted as part of the event. The roundtable was attended by CEOs and association representatives where the participants raised their concerns and suggested effective measures useful to the medical devices industry. In his letter, minister KTR has included all the key points put forth by the medical devices sector leaders at BioAsia 2023.

The key points mentioned by the Industries Minister in the letter were GST implication, import substitution, and increased self-reliance – Inverted Duty Structures impacting Make in India, inadequate testing and certification infrastructure, availability of raw material, and supply chain challenges.

Citing the concerns raised, KTR said that currently, in addition to the custom duty, even GST on spare parts of medical equipment is charged at a higher rate than the equipment itself, which adversely impacts the costs of medical devices in India and contradicts the Government’s efforts to provide low-cost healthcare to the masses. Additionally, he said, there is no refund on GST in healthcare. “Medical devices are not luxury items and it is extremely important to recognize that devices/diagnostics will be critical to make healthcare accessible for all. In this connection, I urge the Government of India to review and reduce GST on medical devices to the extent of 12% and on diagnostics to the extent of 5% as against 18% currently levied,” the Industries Minister appealed.

The minister said that the global medical devices market is already USD 520 Billion and the Indian market is among the top 20 in the world by size and the fourth largest in Asia after Japan, China, and South Korea. KTR said that the opportunity is significant as the industry is growing at more than 15% CAGR.

“Inverted duty structure as of today is not conducive to local medical device manufacturing as there are certain segments where it is more viable to import products than manufacture in India. There are instances where import duty is levied on raw materials, not finished goods. Therefore, I request the Government of India to review and correct inverted import duty structures and barriers to manufacturing in India to encourage Make in India to reduce import dependence,” KTR added.

About the constant challenges with the availability of raw material in the medical device industry, minister KTR said that the industry places bulk orders from outside of the country which usually takes 6-12 months to be delivered, and then stocking the same becomes a huge challenge. The Industries Minister cited suggestions from the industry to promote local indigenisation of component manufacturing for medical devices such as IC and electronic components, LED monitors and panel display units, batteries, semiconductors, mechatronics, etc. which are mostly imported from outside. Also, he said, steps must be taken to encourage the manufacturing of medical consumables in India through a conducive tariff structure and phased manufacturing plan. He urged GoI to consider establishing schemes to promote component manufacturing in India and incentivize companies by raising import duties in phases under a PMP as done for mobile phones and x-ray machines.

“Government of Telangana is willing to partner with the Government of India to set up a Medical Imaging Hub with advanced equipment and machinery in the Medical Devices Park Hyderabad to promote the industry to manufacture these components,” he said.

The minister said that there is an immediate need to ramp up testing facilities within the country as the number of labs for testing medical devices was inadequate for an industry that is growing at more than 15% CAGR. He also said that the existing facilities are ill-equipped and do not always have the necessary accreditation by National Accreditation Board for Testing and Calibration Laboratories (NABL) or notified and empaneled by Central Drugs Standard Control Organisation (CDSCO) or manufacturers do not have access to the availability of blood and tissue samples. And the wait time and charges at the existing facilities are long and high respectively.

Minister KTR asked the Government of India to consider the drafting of legislation for quality testing labs in India, incentivize labs that are accredited, and encourage setting up more testing facilities with advanced equipment as well as ensuring Public Procurement is encouraged on basis of CDSCO registration or Manufacturing License and Indian Certification of Medical devices accredited by National Accreditation Board for Certification Bodies (NABCB). “Government of Telangana is willing to partner with the Government of India to set up additional testing labs in Hyderabad to cater to pan India demand,” he said.

Minister KTR also requested GoI to consider streamlining approvals for domestically manufactured medical consumables, which are generic versions of international products that are being sold for several years.

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