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Medical device sector seeks GST reform and export incentives

Medical Technology

Medical Device, Manufacturing, India, Union Budget

Business Honor
14 January, 2025

India's medical device sector seeks uniform GST, higher export incentives, and affordable pricing for imported devices in the Union Budget.

The medical device manufacturing sector of India has presented a detailed wish list to the government ahead of the Union Budget this year, focusing on major demands to improve business operations, promote exports, and make it affordable for consumers.

One of the key demands made is to prescribe a uniform GST rate of 12% for all medical devices, simplifying the tax structure and making it easier to do business. According to Himanshu Baid, MD of Poly Medicure, this would promote consistency and help manufacturers in navigating the tax environment better.

The sector also wants an increase in the RoDTEP incentive on exports, from the prevailing range of 0.6-0.9%-up to 2-2.5%. This would make Indian-made medical devices globally competitive, supporting manufacturers in expanding their market reach.

Another key demand is the monitoring of the maximum retail price for imported medical devices, ensuring that such products remain affordable for consumers in India. The Indian medical technology market is valued at $12 billion, while imports of medical devices were worth $8.2 billion in FY24, with nearly 80-85% of medical devices imported from abroad. Also pointed out by AIMED is the lack of benefits to consumers in terms of lower retail prices, even due to the efforts to reduce import duties.

It is also demanded by AIMED to review concessional duty notifications for domestic manufacture of medical devices while imposing 5-15% customs duty on imports. The Medical Technology Association of India (MTaI) has also sought reductions in customs duties on the products for which there is not an indigenous alternative.

Additionally, the industry is requesting an extension of the PLI scheme for medical devices by two-three years in support of local manufacturers and to alleviate import dependence.