No investment promotion measure for the 70 per cent imports dependent medical devices sector in Union Budget 2025 speech is disappointing
Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD) appreciated the overall macro-economic and policy direction measures announced in the Union Budget 2025. There are many key features in the Budget announcements that will strengthen the economy and propel the GDP growth.
Some of the important steps that are in the right direction are setting up of Manufacturing Mission and support measures for the MSMEs and startups. The measures to boost R&D and innovation in the domestic industry are also a welcome move. Government’s intention to have a trust-based light regulatory mechanism and decriminalisation of several laws further is also a correct and much-needed approach.
While appreciating that the budget allocation for schemes to promote medical devices manufacturing has been increased to Rs 5200 crore up from Rs 3300 crore, Nath, on behalf of the medical devices industry, 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.
He said, “The industry is disappointed that expectations of the medical devices sector and many of which had been supported by Dept of Pharmaceutical too as an investment enabler under the National Medical Device 2023 policy finds no mention in the speech. We were hoping to see the finance minister speak about medical devices as Make in India enabler and address the 70 per cent import dependence due to inadequate tariff protection with duties at zero to 7.5 per cent in most cases and an ever-rising imports bill that is expected to cross Rs 75000 crore this year.
The Indian medical devices industry’s expectations were:
1. Increase in Custom Duty to a nominal 10 per cent to 15 per cent (and as a Predictable Tariff Policy).
2. Correction of Inverted Duty by levying Health Cess of 5 per cent custom duty on balance medical evices (In 2020 this was applied to only 5 of the 4 Digit HS Codes and balance 22 HS Codes are pending).
3. Trade Margin Capping by monitoring MRP of Imports (if found over 10 to 20 times of CIF price).
4. Income Tax benefits for CAPEX and R&D investments in medical devices.
5. The government can consider standardising the GST rate of 12 per cent across all medical devices as it would simplify the tax structure, ensuring consistency and ease of doing business.