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Medical Devices sector
applauds budget announcements on healthcare sector
The Medical Devices industry
has welcomed the interim Union Budget 2024 lauding the
measures announced in connection with the healthcare
sector, but expressed hope that their demands including on
customs duty would have been addressed.
Association of Indian Medical
Device Industry (AiMeD), the umbrella association of
Indian manufacturers of medical devices covering all types
of medical devices, praised the interim Union Budget 2024
as a comprehensive continuity of the earlier roadmap for
India's 'Atmanirbhar Bharat'. But it also pointed out, "we
await the fine print to study if Department of
Pharmaceuticals' recommendations have been addressed as
seemingly the budget has fallen short of expectations for
addressing the rising import graph of medical devices and
soaring import bills worth over Rs 63,200 crore ($8
billion)". The Association has requested an increase in
custom duty to 10-15 percent and a predictable tariff
policy to support the domestic industry.
Medical Technology
Association of India (MTaI), which represents leading
research-based medical technology companies with a large
footprint in manufacturing and training in India, on the
other hand appreciating the measures announced, said that
a reduced customs duty could have helped the growth of FDI
in the medical technology sector.
Rajiv Nath, Forum
Coordinator, AiMeD applauded the government's
announcements including those regarding the establishment
of medical colleges and the expansion of preventive
vaccination and Ayushman Bharat to ASHA and Aganwadi
workers. He also welcomed the port connectivity corridors
and high traffic density corridors through PM Gati Shakti
and the focus on Northeastern states as it will improve
supply chain management and infrastructure.
The domestic medical
technology industry may benefit from the budget's focus on
green growth, youth and women empowerment, and farmer
centricity, which are aligned with Vision 2047, and the
principle of reform, perform, and transform will ensure
that India has a modular economic structure for all
sections of business and society during the Kartavya Kal,
enabling India to address global challenges and sustain
development. The AiMeD was expecting an increase in Custom
Duty to a nominal 10%-15% Duty and a predictable tariff
policy, correction of Inverted Duty by levying Health Cess
of 5% custom duty on balance Medical Devices (this was not
earlier applied to all HS Codes), trade margin capping by
monitoring MRP of Imports (if over 10 - 20 times of CIF)
and income tax benefits for project investments in Medical
Devices Manufacturing.
"We can only be hopeful that
the fine print of the Union Budget would possibly act upon
our recommendations," said Nath. "We do hope to see in the
fine print action on the assurances from various
government departments to implement the National Medical
Devices Policy 2023 and make it attractive and profitable
to make in India rather than import into India," he added.
Pavan Choudary, Chairman,
Medical Technology Association of India (MTaI) & Managing
Director, Vygon India said, “The schemes for maternal and
child care which are currently in place are disparate and
sometimes deficient. Bringing them under one common,
standardized platform would help deliver optimal and
comprehensive care throughout India''.
“While the customs duty has
not gone down which was our expectation, and remains at
the same level, this itself will take FDI in MedTech to a
never-before high this financial year. However, if the
government had reduced the customs duties, the FDI in
MedTech could have taken a meteoric trajectory”, he added.
Sanjay Bhutani, Board Member,
MTaI & Managing Director, Bausch & Lomb stated, “With
schemes like cervical cancer vaccination for younger girls
and covering Anganwadi and Asha workers under Ayushman
Bharat, this budget emphasized on healthcare, especially
for women, adolescents, and children. Also, the plan to
increase the number of medical colleges using the existing
infrastructure will surely enhance the healthcare
facilities in tier 2 tier 3 cities. However, we feel if
customs duty on medical devices were reduced, India would
further its journey to become the global hub for medical
tourism."
"Also, we were expecting the
Direct taxes and personal income taxes to go down which
would have attracted more FDI and put more money in the
hands of consumers, respectively", he added.
MTaI has requested the
government to reduce the high customs duties to 2.5% on
medical devices, remove the 5% health cess, removal of
undue complications in the tax provisions and put
healthcare services under zero rated Goods and Services
Tax (GST) for hospitals to avail GST credit on inputs,
among others. Since the custom duty regime on most of the
medical devices in many neighboring countries is lower
than in India, the difference in duties created could lead
to the smuggling of the low-bulk-high-value devices. The
result will not only be loss of revenue for the government
but also the patient will be beset with products which are
not backed by adequate legal and service guarantees, it
said.
MTaI has also said that the
5% healthcess ad valorem imposed on imported medical
devices has further compounded the burden on the industry.
An additional tax threatens to not only dent the access to
advanced medical equipment coming to India but will also
leave patients bearing the brunt of these additional costs
adding to the inflationary spiral. There is also a skill
gap that needs to be addressed, it said in the pre-budget
memorandum.
The measures like the fund of
Rs. 1 lakh crore through a 50-year interest-free loan to
promote tech-savvy growth, aiming at providing long-term
financing with extended tenors and minimal to no interest
rates will incentivize private sectors to significantly
amplify research and innovation, particularly in emerging
domains, thereby greatly benefiting the MedTech industry,
said Deepak Sharma, Co-founder and CEO, MedLern, a digital
learning solution for hospitals and healthcare
professionals.
(Ref: https://www.pharmabiz.com/NewsDetails.aspx?aid=166132&sid=1
Dated February 2, 2024)
DoP invites
applications under AMD-CF scheme
The Department of
Pharmaceuticals (DoP) has invited applications from
eligible candidates under the scheme for Assistance to
Medical Device Clusters for Common Facilities (AMD-CF),
fixing the last date of filing the applications as
February 10, 2024.
The Department has come out
with the guidelines for the scheme with a proposed
financial outlay of Rs. 300 crore, on May 9, 2023, to
offer financial assistance to strengthen the existing and
new medical device clusters through creation of common
infrastructure facilities. It has also announced
procedures to select a Project Management Agency (PMA) for
the scheme.
The eligible applicants may
apply through online mode only, after going through the
detailed guidelines published by the Department, informed
a Department official.
The industry organisations
have also applauded the DoP’s move to set up the scheme,
stating that this will play an important role in
attracting foreign and domestic investments in the MedTech
space.
The Scheme, with two
sub-schemes, is expected to help in boosting the domestic
manufacturing capacity and improving the quality of
clusters for sustainable growth of the medical devices
sector.
The scheme further intends to
support central or state governments, institutions, or
organisations to establish or strengthen the testing
laboratories for medical devices to meet the needs arising
due to the roll out of the licensing regime of the Medical
Devices Rules (MDR), 2017.
The Scheme has two components
or sub schemes - Assistance for Common Facilities (CF) and
Assistance for Testing Facilities (TF) - and would be
running for three years from 2023-24 to 2025-26. The
tenure of the scheme is from the financial year 2023-24 to
the financial year 2026-27.
Both the sub-schemes are
designed to set up 12 common facilities and 12 testing
laboratories, under which the common facilities will be
supported with a financial assistance of Rs. 240 crore (Rs.
48 crore in the first year, Rs. 128 crore in the second
and Rs. 64 crore in the third year) for the common
facilities and Rs. 60 crore (Rs. 18 crore for the first,
Rs. 30 crore for the second and Rs. 12 crore for the third
year) for the testing facilities.
Assistance for Common
Facilities is planned to strengthen the medical devices
clusters’ capacity for their sustained growth by creating
common infrastructure facilities. Medical devices
manufacturing units in a cluster who have come together to
form a Special Purpose Vehicle (SPV) to execute the
project of developing common facilities and the clusters
promoted by the State governments, are expected to benefit
from the sub-scheme. There shall be a minimum of five
medical device manufacturing units as members of SPV.
Clusters promoted by state governments may not need to
form an SPV.
The SPV should have
representatives from cluster members, financial
institutions, state and central government and R&D
organisations and the individual manufacturing unit cannot
hold more than 40 per cent in the SPV. The Medical Devices
enterprises shall hold at least 51 per cent equity of the
SPV.
For Common Infrastructure
Facilities for medical device clusters, the limit of
support will be 70 per cent of the approved project cost
or Rs. 20 crore, whichever is less, as per the approval of
the Scheme Steering Committee (SSC). In the case of
Himalayan States and States in the NorthEast Region, the
grant-in-aid would be Rs. 20 crore per Cluster or 90 per
cent of the project cost of the CIF, whichever is less.
The grant will be released in instalments, with 30 per
cent each released in the first, second and third
installment while the rest of the 10 percent will be
released at the fourth stage where the SPV has mobilised
and spent its 100 per cent share in proportion of the
first three grants.
The sub scheme is expected to
have benefits including improvement in quality of medical
devices, regulatory compliance specified for medical
devices, increased availability of trained personnel for
the clusters, increased competitiveness of units in the
cluster and reduction in the manufacturing cost of the
devices.
The sub scheme on assistance
for testing facilities is aimed at strengthening
availability of more medical device testing laboratories
in order to boost manufacturing of quality medical
devices, and national or state level government of private
institutions interested to establish or strengthen testing
facilities for medical devices to test Class A, B, C and D
medical devices including in vitro diagnostic medical
devices under MDR, 2017 can apply for the assistance.
Other legal entities which open a separate account for the
funds to be utilised for the project assistance under the
sub-scheme can also apply for the grant.
(Ref: https://www.pharmabiz.com/NewsDetails.aspx?aid=165760&sid=1
Dated January 15, 2024)
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