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The industry needs to wait for a final notification of tariff rates for products exported from India to US, before assessing the impact, since a rate lower compared to the rate imposed on China, along with certain other factors could benefit the Indian medical devices exports to US, says expert.
Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD) said that there have been too many proclamations on tariff over the last 4-5 months while both USA and India continue to negotiate but until something definitive is announced by a notification it would premature and speculative to comment. The comment comes in the wake of US President Donald Trump's latest announcement that the US would impose a 25% tariff on goods from India from August 1, 2025.
"Suffice to say that whatever is the final duty that’s finally announced on medical devices , if it's at least 15-20% lower than applicable duty rates by USA onto China then there is a strong opportunity for Indian medical devices to increase their exports to US market if they are able to absorb the excessive high cost of regulatory approval of US FDA for market entry and find that these costs to export are sustainable over the years," he said.
"US buyers are actively seeking to diversify their supply chain dependence from China and India is a strong contender if we not only get our quality & pricing mix right but also our agility to ramp up our production capacity and meet other compliance needs on environmental, social and corporate responsibility that buyers seek," he added.
In many products especially rubber based, India may lose out to Indonesia & Vietnam in competitiveness in China +1 , supplier sourcing with their lower tariff of 19% so we need to become competitive in factors other than pricing.
Duties impact for the Indian medical devices sector has to be seen from relative competitiveness - as long as the duty gap between duty on Chinese versus Indian is over 15- 20% we have positive prospects to export to the USA and even put production lines in the USA. Currently Indonesia and Vietnam have lower duties by 6% so for products made there they will possibly enjoy a price competitive advantage over India.
"Clarity will come after August 12 as then duties on Chinese will be clear. They were increased to over 50% but temporarily reduced to 30%. If post August duties on Chinese medical devices revert to over 50% and India at 25% the export prospects versus China are in our favour but GoI and manufacturers will need to work to improve our competitiveness so that we can offset the 6 % disadvantage over Indonesian and Vietnam competitors," added Nath.
The US remains the largest export destination of the medical devices industry, growing 52.54% over five years from Rs 3,715 crore exports reported in 2019-20, to Rs 5,667 crore reported in 2023-24. Germany, which is the second largest export destination, has seen a growth of around 45% from Rs 1,162 crore in 2019-20 to Rs 1,692 crore in 2023-24, according to data.
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