The finance ministry, which is in the process of preparing the Budget, is in a fix. The reason: While domestic manufacturers of medical devices have demanded a hike in Customs duty, the administrative department for medical devices, the Department of Pharmaceuticals, has sought just the opposite.
While the manufacturers want higher Customs duty to make imports costlier and encourage the domestic industry, the department has called for a reduction in the duty to bring down the cost of imported devices.
The domestic medical devices industry is worth Rs 15,000 crore (Rs 150 billion).
In a representation to the finance ministry, the Association of Medical Device Industry said the import-dependent medical devices industry would prosper only if imports were discouraged through higher taxes.
It wants the special Customs duty concession given to 111 types of medical devices abolished. It also wants an increase in Customs duty on devices categorised as life-saving from the current 7.5 per cent to 10 per cent, according AIMED Coordinator Rajiv Nath.
The department, on the other hand, is known to have asked the finance ministry for a waiver of Customs duty on all life-saving medical devices. The department has also sought a reduction in Customs duty on all medical devices as it feels the sector is important from the public health point of view.
The industry and the department are, however, united over their demand for lower duties on imported components that are essential to manufacture medical devices.
Both also highlight instances where import duties on finished products are less than the duties on raw materials and components. The department and the industry have sought that such anomalies be corrected.
Seeking duty exemption on all raw materials used to manufacture medical devices, the department pointed out that duty on antigens and antibodies that were used in diagnostic kits were higher than the duty on finished products. "The kits are key to correct diagnosis and cure. They should come under a lower duty rate", an official said.
With over 700 manufacturers - mostly in the small-scale sector - India has an emerging medical devices industry. The high-end products are imported and marketed in the country by global medical equipment majors such as Philips, Siemens and GE.
The Indian medical device makers are mostly engaged in low-value products like syringes, needles, catheters, blood collection tubes, medical electronics, medical equipment and implants.
