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Prolonged approval processes impact India’s medical devices exports: GTRI

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  • Prolonged regulatory approval processes in the UK impact India’s exports of medical devices to the British market, think tank GTRI said on Wednesday.
  • To promote exports of these devices, it said, India should negotiate a Mutual Recognition Agreement (MRA) to expedite the entry of this equipment into the UK market, particularly for devices with a CDSCO (Central Drugs Standard Control Organisation ) licence or Quality Council of India’s Indian Certification of Medical Devices (ICMED) certification.
  • The MRA would reduce regulatory compliance and audit requirements, potentially enhancing India’s exports, Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
  • The suggestion assumes significance as both the countries are negotiating a free trade agreement and this sector is an important part of that.
  • The existing zero import duties on medical devices in the UK imply no direct tariff-related advantages for India under the FTA, it said.
  • This means, India’s medical devices industry does not gain tariff concessions, which are a typical benefit in such trade agreements, it said adding even with zero tariffs in the UK, India’s medical device exports to the UK are limited due to prolonged regulatory approval processes in the UK.
  • It added that British regulations permit products to be labelled as ‘Made in UK’ even if they are merely marketed there, not manufactured.
  • This is allowed under the current UK Medical Device Regulations, where a product can be labelled with a ‘Legal Manufacturer’ from the UK, even if the actual production does not occur there, GTRI said.
  • Post-FTA, this may create a risk of increased imports due to duty cuts and lax product- specific rules of origin, potentially impacting India’s growing medical device sector, it said.
  • It also said that India might consider duty reductions in the proposed trade pact only on products where India’s exports are high and it has a competitive export advantage, assessed at the tariff line level.
  • India may adopt conservative rules of origin to prevent pass-through imports from third countries with little processing in the UK. A good rule will be using the twin criteria involving change in Tariff Heading and Value Addition for all such products, Srivastava said.
  • He added that this approach would ensure that benefits of the FTA are limited to goods with significant processing in the partner countries, thereby safeguarding India’s trade interests and local industry from potential market disruption.
  • The Indian medical devices industry has a robust local manufacturing base. India can produce a wide range of quality medical devices, enabling self-sufficiency. The underpenetrated medical devices market, driven by healthcare investments, is set for rapid growth, he said.
  • The industry has the potential to expand from $12 billion to $50 billion by 2030, reducing import reliance to 35 per cent and boosting exports to $18 billion and this shift could create 1.5 million jobs, Srivastava added.
  • Achieving the sector’s full potential will require further support as the industry faces 15 per cent cost disability due to the high cost of power, supply chain inefficiencies, and government support is needed to check dumping, ramp up domestic production and cut imports.
  • The UK is a major player in medical device manufacturing with global exports exceeding $4 billion in 2022-23.
  • Essential orthopaedic appliances, with $2 billion, are the top export.
  • Other significant categories include X-ray radiation apparatus, breathing appliances, gas masks.
  • India imported medical devices of value $215 million from the UK in 2022-23.
  • Top medical devices, along with import value, are apparatus for diagnostic lab analysis Polarimeters, Refractometers, and spectrometers ($63.83 million); X-ray and other radiotherapy apparatus ($52 million); diagnostic/lab reagents ($29.18 million).
  • The other imports include instruments for surgical and dental use ($28.07 million); mechano-therapy appliances, oxygen therapy, artificial respiration apparatus ($13.42 million); and orthopaedic devices ($11.49 million).

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