MTaI urges govt to reduce high customs duty and additional health cess on medical devices

New Delhi, November 14, 2022:

Appreciating the Central government’s key measures in the first half of the current fiscal year to support the industry, the research-based medical technology companies have expressed their hope that the government considers reducing the high customs duty and additional health cess levied on medical device imports.

In an email interaction with Pharmabiz, PavanChoudary, chairman and director general, Medical Technology Association of India (MTaI), the association of research-based medical technology companies, said, “One of hallmarks of the current government has been that it is constantly widening the circle of probity. The efforts of the government in creating a Uniform Code for Medical Device Marketing Practices (UCMDMP) are evidence of this and we feel, will go a long way in reassuring ethical players and further growth of the industry.”

There have also been several key measures taken by the government in the first half of the year such as reduction of redundant compliance burden, implementation of a predictable pricing policy, etc, which has boosted industry and investor confidence as evident from the recent FDI figures.

“That said, high costs continue to be the top issue for the medical device industry, which is already facing the brunt of inflationary challenges due to increased freight charges, limited supply of raw material, high import costs due to devaluation of the rupee against the dollar, etc.,” he added.

“We hope the government considers reducing the high customs duty and additional health cess levied on medical device imports to provide some leeway to the industry,” maintained Choudary.

The year has been crucial for the medical device industry, particularly in terms of regulation and policies, with a number of key decisions being made. The draft National Medical Device Policy has been released, with the goal of addressing the core objectives of accessibility, affordability, safety, and quality, as well as focusing on self-sustainability, innovation, and growth in the medical device sector. The draft drugs, medical device and cosmetics bill was also published by the government for stakeholder comments, with the objective to replace the previous Drug and Cosmetic Act.

Since the government in its wisdom felt that a new Act which recognizes medical devices as a separate category is required in shaping the regulatory mechanism for medical devices, the industry expects it to be coherent with the Medical Device Rules 2017 which was created after thorough consultation with the industry and provides a robust regulatory platform.

There are also some pertinent concerns in the draft Bill regarding the compensation and severe punishments (to the extent of imprisonment) that are applicable from the very first violation. Such criminalizing legislations may act as a deterrent in encouraging entrepreneurship and investments in the industry and must be reviewed and reworked.

The MedTech sector has seen a significant increase in FDI, clocking USD 354 million in Jan-June of 2022, in comparison to only 49 million dollars during the corresponding period last year.

That said, the industry is still recovering from the financial hits borne during the pandemic and while the first half of the fiscal year has surely been better compared to the last year in terms of business, it is still behind pre-Covid times in several cases. Therefore, a joint effort from industry as well as government is still required to accelerate the industry's recovery, he added.PharmaBiz