Union Budget 2025 disappoints medical devices industry, says AiMeD

Hyderabad: While the Union Budget 2025 lays out a strong macroeconomic vision and policy direction, the medical devices industry has expressed disappointment over the lack of investment promotion measures for a sector heavily reliant on imports.

In a statement here on Saturday, Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD), appreciated the budget’s overall focus on economic growth, including initiatives to support manufacturing, MSMEs, and startups. He welcomed the government’s push for R&D and innovation, along with regulatory reforms aimed at reducing compliance burdens and decriminalizing certain laws.

However, he noted with concern that the budget speech did not address the long-pending demands of the medical devices industry, which continues to face challenges due to its 70 per cent import dependence.

"The industry is disappointed that the expectations of the Medical Devices sector, many of which were supported by the Department of Pharmaceuticals under the National Medical Devices Policy 2023, found no mention in the budget speech," Nath said.

He added that despite India's ambition to strengthen domestic manufacturing, the absence of key measures such as tariff protection and investment incentives leaves the sector vulnerable to rising import bills, which are expected to exceed Rs 75,000 crore this year.

The Indian medical devices industry had hoped for key policy interventions, including an increase in customs duty from the current 7.5 per cent to at least 10-15 per cent, along with a predictable tariff policy.

Nath also highlighted the need to correct inverted duty structures by extending the 5 per cent health cess on all remaining medical devices, beyond the limited set of items covered in 2020.

Additionally, the industry has been advocating for trade margin capping on imports, income tax benefits for capital expenditure and R&D investments, and a uniform 12 per cent GST rate across all medical devices to simplify taxation and improve business efficiency.

Despite the industry’s disappointment, Nath expressed hope that some of these measures might still find a place in the fine print of the budget documents.

He urged the government to reconsider the sector’s demands to reduce dependency on imports and promote domestic manufacturing as part of the 'Make in India' initiative.