Govt to remove duty anomalies in medical devices sector

The government is working on several steps, including removing duty anomalies, to boost medical devices manufacturing sector in the country and make it a $50-billion industry in the next five years, a top official said on Friday.

The government has realised that an inverted duty structure that favours imported products over domestic manufacturing is working against Indian industry in the medical devices sector and this needs to be changed to support `Make in India', V K Subburaj, secretary in the Department of Pharmaceuticals, said.

An inverted duty structure impacts domestic industry adversely as manufacturers have to pay a higher price for raw material in terms of duty, while imported finished products land at lower duty and cost lesser.

The government also has no plans to control prices of medical devices even as it continues to expand price regulation in drugs, Subburaj said, adding that it would prefer self-regulation by the medical devices industry by refraining from charging unseasonably high prices.

The official said the departments of health and pharmaceuticals along with the Department of Industrial Policy and Promotion (DIPP) are working on the matter and soon they will make recommendations to rectify the inverted duty structure for the growing medical devices sector.

"The important hurdle (which the sector is facing) is the regulatory mechanism...The duty structure has to be modified. Health, DIPP and Pharma are jointly discussing the issue... Probably by next week, we will finalise the recommendations," Subburaj said at a CII function.

"We will ensure that this deficiency gets corrected very shortly. That will set the tone for medical devices industry in the country," he added.

Currently, the medical devices industry in India is estimated to be $5 billion annually, although it has immense potential. "Now we have to scale it to $50 billion and to enable that, we have to take policy decisions," he said.

The department, he said, is working to create a separate vertical for medical devices in the Drugs and Cosmetics Act.

"Once it becomes a $50-billion industry, I do not think we can afford to combine it with the Drugs and Cosmetics Act. There should be a separate Act for the sector," he added.

"We have combined it with drugs for long and that mistake is likely to be sorted out shortly. I think very shortly we will have a separate vertical within this Act exclusively for medical devices," Subburaj said.

The government is also looking at issues such as quality control besides the issue of the preference purchase procedures.

"We are discussing with the electronics and MSME departments to see that products manufactured in India, especially made by medium and small scale sector, get preference for purchase," he said.