The Union budget is come into force to establish new schemes to benefit all in general. This time Finance Minister Nirmala Sitaraman announced a tax on the import of medical devices by 5%. The raised money through these taxes will set up healthcare units.
According to industry experts, this tax added to the medical devices imports along with essential customs duty (BCD). The custom duties on medical pieces of equipment are from 0 to 7.5%, and this additional 5% tax will add to this. Industry experts said that this tax got made as after the visit of President Donald Trump’s to India, they are interested in establishing India-US trade deals.
Sanjay Bhutani, managing director at Bausch and Lomb, India, said that this tax would decrease the affordability of patients as they have to bear high prices. Around 80-90% of medical devices got imported, and hence this tax will raise their rates. All this ultimately will affect consumers.
The market size of the medical devices industry is around $11 billion. The top importers are the US, Germany, China, Netherlands, and Singapore. Releasing the need to raise this market, Nirmala Sitaraman announced the launch of schemes to boost this area.
This sector is growing by time as of now, India is also involved in producing and exporting medical equipment. Before many years India was reliant on imports for its medical computer and devices. The tax on the import of medical devices is 5%, and it will become 5.25%effectively. Thus there is a 0.25% increase to protect domestic traders and raise the market value. Therefore, she said that this new tax on imports on the medical device is necessary for significant market growth.
But Rajiv Nath, forum coordinator at the Association of Indian Medical Device Industry (AiMeD), found this step irrelevant and insignificant.