Medical devices: Budget unveils moves to drive growth

Budget Provisions:

• The Excise duty is being reduced to Nil on specified raw materials Viz stainless steel tube and wire, cobalt chromium tube, Hayness Alloy-25 and polypropylene mesh required for manufacture of Coronary stents/ Coronary stent system and artificial heart valve on actual user basis.

• Also, The Excise duty is being reduced to 6 per cent on specified raw materials viz polypropylene, Stainless Steel Strip and stainless steel capillary tube for manufacture of syringe, needle, catheters and cannulae on actual user basis.

• Further, The excise duty is being reduced to 6 per cent on parts of blood pressure monitors and blood glucose monitoring systems (Gluco-meters) on actual user basis. Also, the exemption to 'intraocular lens' is being restored.

• The full exemption from basic custom duty, CVD (Countervailing Duty) and SAD (Special Additional Duty) is being provided to specified raw materials viz stainless steel tube and wire, cobalt chromium tube, Hayness Alloy-25 and polypropylene mesh required for manufacture of Coronary stents/ coronary stent system and artificial heart valve on actual user basis.

• The basic customs duty is being reduced to 2.5 per cent along with 6 per cent CVD and Nil SAD on specified raw materials viz polypropylene, Stainless Steel Strip and Stainless Steel capillary tube for manufacture of syringe, needle, catheters and cannulae on actual user basis.

• The basic customs duty is being reduced to 2.5 per cent with 6 per cent CVD and Nil SAD on parts of blood pressure monitors and blood glucose monitoring systems (Glucometers) on actual user basis.

Industry Expectations not fulfilled:

• The excise duty on endovascular stents should be exempted –fulfilled.

• The Exemption of basic customs duty on Polydioxanone (PDS) plates would reduce the cost and benefit of the patients –partly

fulfilled.

• The Medical grade PVC sheeting used to manufacture peritoneal dialysis system equipment will attract customs duty of 10 per cent, CVD of 10 per cent and SAD of 4 per cent which should be reduced – not fulfilled.

Budget Impact:

The provision of NIL excise duty and exemption of customs duty on raw materials required for manufacture of Coronary stents/ Coronary stent system will led to available of these stents to cardiac patients at cheaper rates.

Also, the reduction of excise duty and customs duty on specified raw materials for manufacture of syringe, needle, catheters and cannulae makes them available at cheaper rates.

Further, The reduction in excise duty and basic customs duty on parts of blood pressure monitors and blood glucose monitoring systems (Glucometers) on actual user basis benefits the industry. All these expected to drive the demand in the near term. Overall the budget impact is positive on the industry.

Outlook:

The India's rapidly growing healthcare market provides significant opportunities for the medical devices business. Interestingly, the Union budget 2012-13 is the key positive for the industry few positive steps such as provision of NIL excise duty and exemption of customs duty on raw materials required for manufacture of Coronary stents/ Coronary stent system reduction of excise duty and customs duty on specified raw materials for manufacture of syringe, needle, catheters and cannulae will drive the demand in the near term. Also, the reduction in excise duty and basic customs duty on parts of blood pressure monitors and blood glucose monitoring systems (Glucometers) on actual user basis helps the industry significantly.