Revisiting FTAs to protect local pharma, medical devices sector

Bengaluru : The government is reviewing and renegotiating existing free trade agreements (FTAs) India has signed with different countries to protect the domestic pharma and medical devices sector, Union Minister Ananth Kumar said.

He also said that most of the anomalies in inverted duty structure both in pharma and medical devices sector have been rectified.

"We are sensitive and recognise the issues related to inverted tax structure. We are also taking care of FTAs with different countries where it is not favourable to India trade and industry," Kumar told reporters on the sidelines of an international event 'India Pharma 2017' here.

India is discussing with far Middle East countries and others on this issue, he said.

Asked if the government has kept any deadline to review the FTAs, Kumar said, "It is not one day discussion, the talks are on anvil."

Under FTAs, duty free import of medical devices especially medical electronics are allowed, which is affecting the nascent domestic market.

Last year, the government removed concession duty on medical devices and brought import duty on them back to 7.5 per cent. But the concession duty continued for at least 21 medical devices.

According to the Association of Indian Medical Device Industry, since many of 21 medical devices are part of FTAs, they are imported at zero duty, affecting the domestic market.

The issue was raised during a round-table meeting, with CEOs of medical devices makers, chaired by the Union Chemicals & Fertilizers Minister here at the event.

The Association's forum co-coordinator Rajiv Nath said, "In the meeting, we have asked the government to increase import duty to 10 per cent on medical devices from the existing 7.5 per cent to curb imports."

He said the Association has proposed duty on medical components to be kept at 5 per cent from next year and 7.5 per cent thereafter as a 'Make in India' enabler and retain concession duty at 2.5 per cent for now and for next three years.

Among others, the Association asked the government to recognise domestic certification 'ISO' and 'ICMED' for medical devices instead of USFDA.

"In government tenders for procurement of medical devices, local companies are not able to participate. They ask for USFDA approved medical devices. They don't recognise Indian certification like ISO and ICMED. We want the government to allow this," Nath told PTI after the meeting.

The association has also sought preferential market access and preferential pricing for Indian medical devices for Indian public healthcare devices, he said.

Among other issues, the medical devices manufacturing firms have also demanded that the government should provide R&D support for high-end technology and hand holding, he said.