Budget 2015: Government may increase duty on imported medical devices

NEW DELHI: Medical devices such as stents, pacemakers and catheters may soon become expensive. The government is likely to increase basic custom duty by 5% on imported medical devices in the upcoming Budget, official sources said.

At present, the customs duty on imported medical devices varies from 5% to 10%, depending on the usage. These devices are broadly classified into three categories. While the duty is lower at 5% for high-end medical equipment such as MRI machines and CT scanners mostly used in hospitals and radiology laboratories, imported disposables such as syringes, catheters, etc have 10% customs duty. Implants such as stents and pacemakers also have a 5% basic customs duty.

According to sources, the government's proposal to increase the duty is aimed at encouraging companies to manufacture in India in line with Prime Minister Narendra Modi's 'Make in India' mission.

However, the industry feels creating tariff barriers will not help indigenous manufacturing. Instead, it would lead to a hike in prices of medical devices, which as it is contributes significantly to healthcare costs for patients.

"Most of these devices that are imported are not being manufactured in India currently. Therefore, an increase in customs duty would not help manufacturing here, instead it may work against the government's FDI policy," Poly Medicure MD Himanshu Baid said.

India imports 80% of medical devices used here. Recently, the government allowed 100% foreign direct investment in medical devices through automatic route, as part of a strategy to not just reduce imports but also promote local manufacturing for the global market, which will be worth over $400 billion next year.