Indian medical device manufacturers need support from multinational companies, says report
A report suggests that instead of taxing medical device imports, the Indian government should offer tax rebates to multinational companies if they partner with domestic device manufacturers.
The Indian domestic medical device manufacturing market is expected to grow at a compound annual growth rate (CAGR) of 7.5 percent until 2025, according to GlobalData. The company suggested that the recently proposed additional five percent health cess (levy) on imported devices and the Indian government’s ‘Make in India’ initiative could both damage this growth and be harmful to patients and healthcare.
The Indian government is attempting to support domestic medical device manufacturers through tax structure changes, including the cess on imported devices; however Rohit Anand, Medical Devices Analyst at GlobalData, said: “Since India is a net importer of medical devices, additional taxes may discourage large multinationals to import newer technologies and increased cost of devices is likely to be passed on to the patients. This will limit patient access to advanced treatment options available in developed countries and may lead to an increased treatment cost.”
According to the company’s research, there are over 800 domestic medical device manufacturers in India, producing products such as consumables, disposables and capital equipment. However, the majority are small-scale producers with no access to newer technologies, so despite the ‘Make in India’ initiative encouraging product exports, importation of these more innovative technologies is still a convenient option.
Anand concluded: “The local medical device makers are predominantly involved in the manufacturing of low-end products for domestic consumption. The Indian government should therefore encourage multinationals to partner with domestic manufacturers by providing incentives and tax rebates. Improved tax structure can be another option to encourage domestic medical device industry.”