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The medical devices and in vitro diagnostics (IVD) devices industry is expecting impetus to exports, tax incentives related to research & development (R&D), rationalisation of Goods and Services Tax (GST) rates, quality standardisation and harmonization, and creation of a separate regulatory body for the sector among others in the upcoming Union Budget 2025-26, said Association of Diagnostics Manufacturers of India (ADMI).
The Association said that the past two years have been relatively inconsequential for the MedTech industry, which has been mostly ignored in the Union Budgets.
"We expect the 2025 Union Budget to examine the industry's woes and herald strategic reforms to bolster the industry, which is the cornerstone for driving healthcare for all," said Jatin Mahajan, secretary, ADMI.
Companies should receive an additional tax deduction on their R&D expenditures. This will encourage innovation and incentivize domestic production.
Given that healthcare impacts everyone, including the poorer and marginalized, the government must implement a GST rate in the lowest slab.
Creating a separate regulatory body for medical devices would result in dedicated focus and a better understanding of the industry needs and enable faster product approvals.
Impetus should be provided to exports to drive significant growth, activities, and initiatives under the Export Promotion Council for Medical Devices must be increased and fast-paced.
The current Remission of Duties and Taxes (RoDTEP) on exported products for medical devices ranges between 0.6 and 0.9 percent and increasing this will positively impact India’s export competitiveness.
To encourage high-end MedTech manufacturing, Technology transfer is the most potent strategy. The government should provide incentives to promote technology adoption, especially in areas where local manufacturing and innovation need a boost. It should also offer tax deductions for expenditures on acquiring technology or IPR, a reduced tax rate for companies engaged in technology transfer, and low/zero interest loans for companies involved in tech transfer.
Subsidized health checkups and increased allocation in the budget for preventive healthcare and diagnosis are the need of the hour.
Enhancing the credibility of Indian standards for medical devices in line with international standards like US FDA, EU MDR/IVDR, CE, and UKCA standards will help build trust in Indian products, drive growth, and help penetrate global markets.
"We expect the government to address various growth aspects, such as skill availability and development, strengthening of the healthcare infrastructure, and creation of diagnostic hubs in tier 2 and 3 cities, amongst others. With these steps, the government can provide a growth impetus to this sunlight industry that has been providing yeoman service to the nation," averred Mahajan.
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