Hike in duty on medical devices reversed

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Hike in duty on medical devices reversedMumbai: The first rollback of the Budget has happened. In a protectionist measure, customs duty increased in the Budget on medical devices to encourage the domestic industry, has been reversed by a finance ministry notification issued on Friday, sources told TOI. The customs duties on two categories of medical devices were increased to 7.5% and 10% from 5% and 7.5%. Now, as a result of the notification, it’s back to the original level, sending the domestic industry into a tizzy.

Terming the development “a deathblow”, the Rs 9,000-crore domestic industry suspects “foul play at the behest of the powerful US medical devices industry lobby”, and has decided to ask the government to investigate the issue.

“Our market share is coming down drastically, with nearly 90% of devices imported, including even basic products like syringes, needles and thermometers. For the last four years, we have waited for measures to be announced by the government to boost manufacturing, but they speak ‘Make in India’, but actually encourage import and sell in India,” Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry (AIMeD), told TOI.

The installed manufacturing capacity is lying idle, and many manufacturers are converting into traders, and realigning their business strategy as importers/marketers after resigning to lack of government support, and facing discrimination at even government-owned hospitals, he said. “Even basic consumables like thermometers, hot water bottles , disposable syringes and needles are being imported and sold as Indian brands. We are encouraging pseudo manufacturing “, he added.

Domestic manufacturers are finding it difficult to compete in government tenders due to low-priced Chinese products procuring tenders, or being beaten by restrictive conditions on “perceived quality”.

The medical tech and devices industry has doubled from Rs 31,900 crore in 2013-14 to over Rs 60,000 crore in 2016-17, with nearly 80% being imported, according to AIMED. With this huge influx of imports, domestic companies say they are reeling under the threat of Chinese manufacturers, who are dumping products at 30-40% cheaper rates than indigenously-produced products.

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