A section of medical device manufacturers has urged the government to lower Goods & Services Tax (GST) on some diagnostics products to encourage manufacturing in India. They want the GST rates to be brought down uniformly to 5% from 18% on instruments and 12% on reagents/consumables.
“Preferential pricing and the Buy Indian policy are strategic drivers that can boost domestic growth and benefit consumers and stakeholders alike. However, policies remain theoretical and need reconsideration,” said Suresh Vazirani, chairman & managing director, Transasia Bio-Medicals Ltd., an in-vitro diagnostic company.
He said World Bank norms allow 15% to 20% price preference [more price to be paid] to domestic manufacturers and it should be implemented immediately. Besides, preference should be given for Indian Certification for Medical Devices or ISO-certified manufacturers to boost quality, he said.
“Preference has to be given for Design India-certified manufacturers to boost indigenous development, and there has to be timely payment against government supplies.”
Mr. Vazirani said provision should be made for a level-playing field for Indian manufacturers with auto cancellation and re-tendering for hospitals and procurement bodies.
These should include exclusionary criteria that the USFDA, European CE certification use to favour multinational corporations and imported products in tender specifications that discriminate against Indian manufacturers.
Dependency on imports is a deterrent for growth, and an inverted duty structure and zero basic custom duty have resulted in 70-80% medical equipment being imported. Besides, the components required by domestic manufacturers in India are charged at 7.5% basic customs duty, he said. “The industry can take inspiration from the automobile sector, where players are making in India as the import duty on parts is only about 10% while on finished cars, it is up to 90%, thereby encouraging domestic manufacturing.”
The lack of regulatory systems with global standards and quality product testing are hampering this sector by encouraging low cost imports of poor quality and placing hurdles for domestic manufacturers, he said. Incentives must be introduced for research and development as well as the development of innovative indigenous products in the country, Mr. Vazirani said.