Budget 2023: Medtech sector hopes for increased R&D allocation, enhanced testing facilities to boost exports 

The medical technology industry leaders are counting on the Centre to increase the ambit of the Production-Linked Incentive (PLI) scheme to boost Research and Development in the Budget 2023 to be presented by Finance Minister Nirmala Sitharaman on February 1.

Shravan Subramanyam, Managing Director of Wipro-GE Healthcare, called for the formalisation of a medical devices policy for facilitating self-reliance and exports.

“Over recent years, the government has spurred efforts to support local R&D and manufacturing for the MedTech sector by setting up Medical Device Parks and implementing PLI schemes. We anticipate expansion of the PLI scheme for the MedTech Sector with adequate flexibility integrated in the scheme to address the ever-evolving market dynamics to truly make Indian domestic manufacturing globally competitive,” Subramanyam said.

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He said rationalisation of the Goods and Services Tax (GST) for the MedTech sector, extending zero rating and schemes like remissions of duties and taxes on exported products for export-oriented units and Electronic Hardware Technology Parks will provide impetus to local manufacturing for domestic use and overseas shipments.

Vishwaprasad Alva, founder and Managing Director of Skanray Technologies, expects the Finance Minister to allocate funds for advanced test facilities pending completion.

“These testing facilities for medical devices will help Indian manufactures become competitive in technology, safety and exports of MedTech products,” he added.

Alva said Sitharaman should also share the status of utilisation of funds allocated in last year’s healthcare budget.

“I am more curious to know if the finance minister will share in this budget the status of the last year's spending, spillover and completion. The MedTech boost comes from healthcare, Ayushman Bharat execution. It's good to have a progress and status report,” he said.

Also read: India’s dependence on imported medical devices at ‘alarming’ level, industry group says

Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD), said he expects the Centre to increase the basic custom duty on imports of medical devices and reduce the Goods and Services Tax.

“Instead of 18 percent GST applicable on some Medical Devices that are not luxury goods, the GST needs to be a flat 12 percent for all medical devices,” he added.

Medical devices 

To protect the manufacturing base of medical device manufacturers in India, Nath urged the government to increase the basic custom duty on imports of medical devices to at least 10 to 15 percent from the current 0- 7.5 percent duty as was done in the case of mobile phones.

“Due to such low custom duty, India is importing Rs. 63,200 crore of medical devices and is over 80 percent import-dependent. This dependency can be reduced with correct policies as done for mobile phones and consumer electronics,” he added.

Nath said the government should also form a separate department for medical devices, as recommended by the Parliamentary Committee on Health.

Manoj Madhavan, Managing Director, Boston Scientific India Hub, pitched for encouraging value-based, quality-focused healthcare by investing on building capacities.

“Despite results of testing influencing as many as 70 percent of clinical decisions, diagnostics account for a small percentage of healthcare expenditure. MedTech sector can play a major role in this, with potential breakthroughs in screening, monitoring, diagnostics and treatment,” he added