Budget 2023: MedTech Seeks Innovation & Research Funding For Healthcare
According to MedTech businesses, a separate budget of USD 1 to USD 5 million needs to be set aside for the international promotion, advertising, and marketing of the Indian medical device industry
The MedTech industry may benefit from some improvements under Budget 2023–24. Like last year, medical technology industries expect additional reforms that may boost the business. There are great expectations from the finance ministry as the eagerly awaited Union Budget 2023–24 approaches the door. The government should consider some suggestions made by different MedTech companies as the industry hopes for the sector's expansion.
MedTech industry experts expect that the government should increase funding for R&D and innovation. The Indian MedTech sector, the nation's emerging business, has been supplying the rest of the globe with reasonably priced, high-quality products. Scientific advancements are happening quickly in this knowledge-based industry. Indian medical technology was valued at USD 10.36 billion in 2020 and is anticipated to grow at a CAGR of 37 per cent from 2020 to 2025, reaching a value of USD 50 billion.
In order to achieve this vision, the Union Budget for 2023–2024 should support R&D and innovation, which will set the pace for advancing the MedTech business. To aid in the growth of the industry, the budget should be detailed with accommodative policies, streamlined regulations, and specific GST requirements. The industry will invest more and grow more steadily if measures are taken to make doing business easier. The MedTech industry expects the support of the Indian government in the budget.
The medical technology sector has been vocal about the need to improve the financial standing of medical device producers. By changing finance structures, the sector hopes to foster an environment that is beneficial to R&D. In its pre-budget recommendations, the Association of Indian Medical Device Industry urges the government to reduce its 80 per cent to 85 per cent reliance on imports and its steadily rising import bill of more than Rs 63,200 crore.
It calls on the government to consider changing from an 8-digit HS code to a 10-digit HS code, as done by the US and Europe, to provide more precise information for better analysis and decision-making.
The government should protect India's manufacturing base by raising the basic customs duty on medical device imports from the current 0-7.5 per cent duty to at least 10–15 per cent duty, even though the WTO Bound rate is typically 40 per cent. In addition, the GST should be a flat 12 per cent for all medical devices, and trade margin monitoring should be implemented.
If the government meets with even 70 per cent of the Parliamentary Committee on health's recent recommendations, we may see a reduction in the country's reliance on imports and a rise in domestic manufacturing, which would improve healthcare delivery by enabling more people to buy medical devices. For a nation that depends heavily on imports to meet its healthcare needs, an additional tax poses a threat to both restrict access to cutting-edge medical equipment coming to India and to leave patients footing the bill, further fuelling the inflationary spiral.
According to MedTech businesses, a separate budget of USD 1 to USD 5 million needs to be set aside for the international promotion, advertising, and marketing of the Indian medical device industry. As a result, the government's goal of "Make in India for the world" will be furthered, and "brand India" will be strengthened, as well as the acceptance of medical devices created in India abroad. It will also assist in promoting India as a location for MedTech manufacturing and R&D.
Understandably, the life sciences industry is preparing for some significant reforms in the future. It is imperative that the finance ministry sit down with the industry and have extensive discussions about what must be done to address the issue so that India, with its sizable population, can hold its head high in the healthcare field.
With COVID-19 making headlines in China, the US, and Japan, India needs to act quickly to ensure that a successful budget creates a win-win situation for the government and the business at large. There is widespread industry agreement that a proactive budget with a healthcare focus is necessary.