New Delhi: After relaxing FDI policy for medical devices sector, the government is expected to announce an incentive package, including tax benefits, in the forthcoming Budget for domestic manufacturers.
In its Budget proposals, the Commerce and Industry Ministry has suggested to Finance Minister Arun Jaitley to increase import duty on medical devices product, including syringes and pacemaker.
It has recommended that the basic customs duty be hiked from 5 percent to 10 percent in the next Budget to be presented on 28 February, sources said.
There is an issue of inverted duty structure on these products currently. This means customs duty on the final product is less than the duty on some raw materials essential for domestic manufacturing of syringes.
As per estimates, import of syringes has increased to USD 38.7 million in 2013-14 from USD 30.7 million in 2006-07. The domestic demand for the products is about 3 billion pieces.
The ministry has also suggested that the countervailing duty on the imported raw material should be exempted on use basis for pacemakers.
According to sources, the Ministry wants that the existing concessional duty of 5 percent on the imported raw material should be continued.
An industry expert said that there is a huge potential in this sector as the domestic demand of pacemakers is about 50,000 pieces. Its imports have increased to USD 22.86 million in 2013-14 from USD 14.22 million in 2006-07.
The government in December last permitted 100 per cent foreign direct investment (FDI) under automatic route in medical devices sector to encourage the manufacturing of equipment, including diagnostic kits and other devices.
India has achieved an eminent global position in pharma sector. However, the same has not been replicated in the medical devices industry.
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Updated Date: Feb 22, 2015 12:06:22 IST