RAJIV NATH
(Forum Coordinator, Association of Indian Medical Device Industry (AiMeD).
Mr. Rajiv Nath appreciated the overall macroeconomic 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 GDP growth.
Some of the important steps that are in the right direction are setting up a Manufacturing Mission and support measures for the MSMEs & Startups. The measures to boost R&D and innovation in the domestic industry are also a welcome move. The government’s intention to have a trust-based light regulatory mechanism and decriminalization of several laws further is also a correct and much-needed approach.
Mr 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 would 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 India’s enabler and address the 70% import dependence due to inadequate tariff protection with duties at zero to 7.5% in most cases and a ever rising import bill that is expected to cross 75000 Cr Rs this year.
The Indian Medical Devices Industry’s expectations were:
1) Increase in Custom Duty to a nominal 10% to 15% (and as a Predictable Tariff Policy).
2) Correction of Inverted Duty by levying Health Cess of 5% customs duty on balance Medical Devices (In 2020 this was applied to only 5 of the 4 Digit HS Codes and the balance 22 HS Codes are pending).
3) Trade Margin Capping by monitoring the MRP of Imports (if found over 10 to 20 times the CIF price).
4) Income Tax benefits for CAPEX and R&D investments in Medical Devices.
5) The government can consider standardizing the GST rate of 12% across all medical devices as it would simplify the tax structure, ensuring consistency and ease of doing business.
We are however pleased to note the budget allocation for schemes to promote medical device manufacturing has been increased to Rs 5200 Cr up from 3300 Cr Rs