Union Budget 2024-25

Nirmala Sitharaman, Minister of Finance & Corporate Affairs, presented the Union Budget 2024-25 in the Parliament on July 23, 2024.

Impact on MedTech sector.

In Priority 3, the FM laid emphasis on the healthcare sector.
“Our government is committed to all-round, all-pervasive and all inclusive development of people, particularly, farmers, youth, women and poor. For achieving social justice comprehensively, the saturation approach of covering all eligible people through various programmes including those for education and health will be adopted to empower them by improving their capabilities.”

Priority 8
Innovation, Research & Development
“We will operationalize the Anusandhan National Research Fund for basic research and prototype development. Further, we will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ₹ 1 lakh crore in line with the announcement in the interim budget.”

Foreign Direct Investment and Overseas Investment
The rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to (1) facilitate foreign direct investments, (2) nudge prioritization, and (3) promote opportunities for using Indian Rupee as a currency for overseas investments.”

Specific customs duty proposals.
“To provide relief to cancer patients, I propose to fully exempt three more medicines from customs duties. 120. I also propose changes in the BCD on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, so as to synchronise them with domestic capacity addition.”

FM allocated ₹89,287 crore for health
The government has allocated ₹89,287 crore for developing, maintaining and improving the country’s healthcare system, marginally higher from ₹88,956 crore in FY24. The government has also allocated ₹2,143 crore for PLI for the pharmaceutical industry.

The government has also proposed the exemption of three more cancer medications from customs duties. Earlier in March 2023, the government had fully exempted Pembrolizumab (Keytruda), a Merck cancer drug used for cervical cancer, from basic customs duty. The government also exempted customs duty for foods and drugs used for rare diseases. Some of the rare diseases mentioned in the National Policy For Rare Diseases 2021 list include Wilson’s disease, cystic fibrosis and Pompe disease.

Normally, medicines attract a basic customs duty of 10%, while some life-saving drugs or vaccines attract a concessional rate of 5%, or are completely exempt from duties. Some drugs such as treatments for spinal muscular atrophy or Duchenne muscular dystrophy have already been exempted from customs duty.

The government has also proposed changes in the BCD on x-ray tubes and flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, to synchronise them with domestic capacity addition.

The government will operationalise the Anusandhan National Research Fund for basic research and prototype development and will also set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ₹1 lakh crore in line with the announcement in the interim budget.

In the Interim Union Budget for 2024-25, presented earlier in February, the Finance Minister allocated ₹90,171 crore to the health sector for 2024-25, which was higher than the allocation of ₹79,221 crore in 2023-24.

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana allocation was raised from ₹7,200 crore in 2023-24 to ₹7,500 crore in 2024-25. Allocation for Pradhan Mantri Ayushman Bharat Health Infrastructure Mission was increased from ₹2,100 crore in 2023-24 to ₹4,108 crore in 2024-25.

RESPONSES

 INDUSTRY

Aravind Viswanathan, CEO Transasia Bio-Medicals Ltd.
The Interim Budget 2024 presented earlier this year marked a significant step forward in India’s healthcare sector, focusing on expanding healthcare infrastructure, including more medical colleges integrated with existing hospital facilities. Initiatives like the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) and the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM) underscored the government’s commitment to enhancing accessibility, affordability, and quality of care.

However, in the announcement of Union Budget 2024, the medical devices industry had hoped for more substantial measures to support affordable healthcare. We anticipated nominal duty increases on medical devices to support robust manufacturing capabilities. Measures such as removing GST on diagnostic services and lowering customs duties on imported equipment could have significantly reduced costs and improved accessibility. Additionally, a uniform GST rate of 5% on all Make in India medical devices would have leveled the playing field for domestic manufacturers facing higher operational costs compared to international counterparts.

Further, the removal of nil duty exemptions on certain medical devices could have further promoted the Make in India initiative, boosting our global competitiveness. We recommended strategic increases in customs duties to 10-15% to foster balanced trade conditions, stimulate local manufacturing, and decrease dependency on imports, which currently constitute 70% of the sector.

Then there are other critical aspects that continue to remain unaddressed. The Production Linked Incentive (PLI) scheme, for instance, should extend a 7% incentive to all domestically produced medical devices over the next decade. Moreover, incentivizing research and development with a weighted tax deduction of 200% is essential for advancing technological capabilities in the medical device sector and achieving self-reliance.

Overall, while the budget introduces vital reforms, additional targeted measures are needed to fully harness India’s potential in medical technology and ensure comprehensive healthcare for all.”

Thomas John, Managing Director, Agappe Diagnostics Ltd
“The Union Budget for 2024-25 emphasizes employment, skilling, MSMEs, and the middle class while maintaining fiscal discipline and supporting robust growth. This follows an 8.2% GDP growth in FY 2024, aided by a decade of government and RBI initiatives.

Employment and skilling:

• The budget targets the skilling of 4.1 crore individuals, enhancing ITIs, and offering internships with allowances. Three new employment incentive schemes aim to boost job creation. Special focus is given to women’s workforce participation and labour reforms with e-portals to ease compliance.

Agricultural productivity and rural development:

• Initiatives to enhance food security and rural development include comprehensive development in the eastern region, integrating 63,000 villages and five crore tribal individuals into the mainstream economy.

Support for MSMEs:

• Proposals include a self-financing guarantee fund, increased MUDRA loans to Rs 20 lakhs, and support for distressed MSMEs. Financial backing for food irradiation units and testing labs will boost food manufacturing.

Infrastructure and energy:

• A substantial allocation of 3.4% of GDP (₹11,11,111 crores) is dedicated to infrastructure, with significant investments in solar and nuclear energy.

Research and development:

• Establishment of a national research fund and private sector-led research initiatives supported by ₹1,00,000 crore aim to foster innovation, particularly in healthcare and medical devices.

Tax reforms and FDI:

• Simplified GST, reduced customs duties, and streamlined FDI regulations aim to enhance tax revenues, lower manufacturing costs, and boost economic growth. The ‘Vivad se Vishwas’ scheme and other measures aim to create a taxpayer-friendly environment.

Overall, the budget supports growth while maintaining fiscal discipline, aiming for a developed India or ‘Vikisit Bharat’.”

Dr Rajeev Gautam, Corporate Officer – HORIBA, Ltd., Japan and President – HORIBA India
“About 13% of the rise in the budget received for the Ministry of Health is a good, progressing sign of the government being more cautious about the healthcare sector.

However, there is still a huge lack of appropriate funding for healthcare expenditure, even when compared to neighboring SAARC nations.

GOI should ideally invest about 2.5 % of our GDP in the healthcare sector.

India must give precedence to and increase investments in healthcare, leveraging Public-Private Partnerships to improve services without a significant increase in budgets. Regular and inclusive screenings are necessary, along with additional training courses for healthcare professionals to attract and enhance talent in the healthcare industry.”

Sunil Khurana, CEO & MD – BPL Medical Technologies
“The Union Budget 2024, presented by our FM earlier today, presented several forward-looking proposals steering India’s economic growth. However, as the CEO & MD of BPL Medical Technologies as well as one of the members of the Indian MedTech Industry, I find myself contemplating the short-term and long-term implications of the budget, specifically on the medical device industry, with a combination of cautious optimism and unmet expectations.

A notable point mentioned in the budget is the changes in basic customs duty. This change under the Phased Manufacturing Programme, reduced customs duty from 15% to 5% for some of the components required in X-ray machines and flat panel detectors, a move that will certainly aid in our efforts to provide premium quality equipment. The government’s decision to provide relief in this area is a welcome move to maintain synchronicity with domestic production. In addition, the focus on skill development and R&D funding will boost local production and position India as a global leader in healthcare manufacturing. The new scheme for internships in 500 top companies for 1 crore youth over 5 years will create a huge difference, resulting in a highly skilled workforce and fostering innovation. We are optimistic that this will accelerate the research and innovation initiatives in the medical device industry.

While the budget rightfully prioritises several areas, its direct implication on the medical devices, however, seems limited. The specific measures that could have significantly boosted our sector were not addressed. For instance, an increase in customs duty on medical devices, a move which rightfully could’ve encouraged domestic manufacturing and reduced our dependency on import, was not addressed.

In conclusion, the union budget certainly holds potential but falls short of providing the much-needed push to the medical device sector. It is my humble urge to the government to consider strategic measures that will not only support but also significantly enhance the growth and global competitiveness of the Indian medical device industry.”

Dr GSK Velu, Chairman & Managing Director, Trivitron Healthcare, Neuberg Diagnostics, Maxivision Super Specialty Eye Hospitals
“The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, is being acclaimed as visionary and progressive, with strong potential to boost economic growth and contribute to the vision of Viksit Bharat. A notable highlight for the medical device industry is the reduction in duty on the import of components for x-ray equipment until domestic production capabilities are established. This move is anticipated to encourage investment in making India a global manufacturing hub.

The Union Budget 2024 is comprehensive, addressing the diverse needs of the nation. It emphasizes financial stability, retail growth, educational advancements, accessible loans, and developmental initiatives. This budget supports India’s vision of becoming a thriving and progressive nation. By focusing on these critical areas, it embodies the spirit of ‘Vikas’ and positions India as a global leader.

The budget highlighted the fiscal incentives for research and development (R&D) and capital expenditure (CAPEX) in the medical devices sector under the budget. These measures set innovation, enhance production capabilities, and propel India towards self-reliance in medical technology.

The budget addresses import dependence in the medical device sector by introducing a health cess on customs duty for remaining medical devices. This aims to fund Ayushman Bharat and ensure quality, affordable healthcare.”

Himanshu Baid, Managing Director, Poly Medicure Ltd.
“We welcome the Union Budget’s focus on healthcare, which marks a pivotal step towards enhancing healthcare accessibility and quality in India.

Finance Minister’s proposed changes in customs duty aimed at synchronizing domestic capacity addition for X-ray tubes and Flat panel detectors is worthy. This measure will bolster local manufacturing capabilities in medical technology, fostering self-reliance and enhancing accessibility to critical diagnostic equipment.

Furthermore, the exemption of basic customs duty on three cancer treatment medicines is a commendable step towards improving affordability and availability of essential treatments. This initiative aligns with our commitment to advancing healthcare outcomes through innovative solutions.

The government’s initiatives to strengthen India’s healthcare infrastructure and accelerate growth in the pharmaceutical & medical device sector represent a significant leap towards sustainable development and innovation in healthcare. Overall, the Union Budget’s healthcare provisions set a positive tone for the sector’s growth and development, reinforcing our optimism for the future of healthcare in the country.”

Vikas Khanna, South Asia Manager, Brandon Medical
“The 2024 budget initiatives are a positive step towards a more resilient and efficient healthcare system in India.

Key initiatives include reducing the cost and burden on the cancer treatment by reducing the customs duty on cancer drugs and x ray medical equipment, it was not clear on the surgical equipment used for cancer surgeries and establishing new medical colleges using existing hospital infrastructure.

These initiatives emphasize preventive care, developing clinical staff, and enhancing research. Brandon Medical India remains committed to advocating for resilient healthcare, starting with robust medical infrastructure. Durable medical equipment prevents interruptions and saves costs. Our SMART approach (Standardisation, Modularity, Adaptability, Reliability, and Digital Technology Integration) in operating theatre design ensures surgical environments are future-proof and efficient.

In ICU design, we should integrate advanced technology with patient-focused features, streamline workflows, reduce clutter, and create comfortable spaces with innovative solutions to maximise space and adaptability to peak use during crises while future-proofing designs.”

Gaurav Agarwal, MD, Innvolution Healthcare Pvt Ltd
“The Interim Budget 2024 is a game-changer for the Medtech industry, with the government’s decision to reduce customs duties on x-ray tubes and flat panel detectors, components not currently manufactured in India. This strategic move will lower costs for healthcare providers, making advanced medical imaging technologies more accessible and affordable. Additionally, this initiative aligns with making India Atmanirbhar in the highly import-dependent x-ray segment. Furthermore, the budget’s focus on skill development and R&D funding will help cultivate a highly skilled workforce and foster innovation, positioning India as a global leader in the manufacturing of novel technologies. These initiatives reflect the government’s commitment to transforming India into a hub of manufacturing excellence and ensuring the best healthcare outcomes for all.”

Bhaumik Trivedi, Assistant Manager – Clinical & Diagnostic Business Development, Shimadzu Analytical (India) Pvt. Ltd.
“This is a budget of continuity and for inclusive growth. The decision to extend custom exemptions for Trastuzumab Deruxtecan, Osimertinib, and Durvalumab is a commendable step, and the proposed changes in the Basic Custom Duty (BCD) on X-ray tubes and flat panel detectors, aimed at aligning with the phased manufacturing programs, are positive moves. However, some long-standing healthcare sector demands remain unaddressed, such as increasing the GDP spent on healthcare as a national issue, focusing on newborn screening, promoting medical value travel in India, and rationalising GST with a uniform rate and full input tax credit eligibility.”

Harish Trivedi, CEO, CTSI – South Asia
“We applaud the government’s decision to exempt three additional medicines from customs duty for cancer patients. This move will significantly relieve cancer patients by making essential treatments more affordable and accessible. The proposed changes in customs duty on x-ray tubes and flat panel detectors for domestic x-ray machine production are also commendable. These measures will not only benefit patients but also enhance the overall healthcare infrastructure in the country. Such forward-thinking policies are crucial in our collective fight against cancer and improving patient outcomes.”

Dr Jagprag Singh Gujral, SVP MDO/ Head of Emerging Markets, Varian (a Siemens Healthineers Company) and Group CEO- CTSI
“We commend the government’s proactive steps in exempting three additional medicines from customs duty for cancer patients. This decision will alleviate a significant portion of the financial burden faced by patients and their families, making life-saving treatments more accessible.

The BCD changes for domestic capacity addition for medical technology items like x-ray tubes and flat panel detectors is a crucial step towards self-reliance and enabling access to care in cost conscious, underpenetrated market.

The thrust on MSME domestic manufacturing and abolishing Angel Tax will incentivise healthcare startups provide the foundation for enabling technology led innovations in the life sciences domain.

We are optimistic that these measures aim to strengthen the healthcare infrastructure and the Government’s commitment to improving healthcare accessibility and affordability is evident in the announcements. We look forward to collaborating with all stakeholders to ensure these benefits reach those in need.”

Tetsuya Yamada, MD, OMRON Healthcare India
“We commend the healthcare initiatives outlined in the Union Budget. The increased allocation for health and wellness, coupled with a strong emphasis on digital health infrastructure & telemedicine, is a significant step towards boosting accessibility and efficiency of healthcare services through digital means. OMRON Healthcare has long been dedicated to empowering individuals with the tools needed to monitor and manage their health effectively. The proposed budget’s support for innovations in healthcare aligns perfectly with our commitment to provide easily accessible and user-friendly health monitoring solutions. We believe that these measures will not only improve the quality of healthcare but also foster a culture of proactive health management among citizens. We look forward to contributing to this transformative journey and supporting the government’s vision of a healthier, more resilient India.”

Anish Bafna, CEO and MD, Healthium Medtech
“The Union Budget 2024-25 sets the foundation for our nation’s unrelenting pursuit towards Viksit Bharat 2047. The announced exemption of custom duties on the three additional cancer formulations is an industry welcoming move towards patient centricity, easing the financial and socio-economic burden of the disease on patients. Additionally, the detailed changes in basic custom duties on medical equipments like x-rays and flat panel detectors under the government’s phased manufacturing program will go a long way to bolster the domestic production capacity for local players. Such interventions from the government will propel conducive policymaking and enhance affordability and accessibility in healthcare, while supporting manufacturing and innovation in the medical sector.

The increased impetus on job creation and central skilling programs will boost productivity and excellence in the workforce for developing sectors like manufacturing and MSMEs. Tailored initiatives like Anusandhan National Research Fund for powering innovation, research and prototype development, will encourage the spirit of self-reliance, promote talent and generate indigenous solutions in healthcare. The financial outlay of ₹1 Lakh Crore will further spur private sector-driven research and innovation at a commercial scale. Moreover, the ₹1,000 crore fund announced to boost India’s space economy will encourage private innovation, advance our Atmanirbharta initiatives and benefit 180+ startups, and more incubated applications.”

Sunilkumar Parmar, Zonal Sales Manager, B&E Bio-technology Co., Ltd.
“Nirmala Sitharaman’s 2024 budget brings promising advancements for the healthcare industry, particularly in the areas of in vitro diagnostics (IVD), hospitals and diagnostic centers, manufacturing, and exports.

The IVD sector is set to benefit significantly from the budget’s focus on enhancing research and development. Increased funding for innovation in diagnostic technologies will improve early disease detection and patient outcomes. This support is crucial for developing cost-effective and cutting-edge diagnostic tools that can meet the growing healthcare needs of the population.

Hospitals and diagnostic centers will see a substantial impact from the budget’s allocation of ₹20,000 crore for new hospital constructions, especially in underserved rural and semi-urban areas. This initiative will expand healthcare accessibility, ensuring quality medical care reaches more people.

Overall, the 2024 budget provides a robust framework for advancing the healthcare industry, addressing critical areas such as diagnostics, infrastructure, and manufacturing. These measures are expected to drive innovation, improve healthcare delivery, and position India as a leader in the global healthcare sector.”

HOSPITALS

Dr Sangita Reddy, JMD, Apollo Hospitals Group
“The budget announcement demonstrates the Government’s commitment to enhancing the healthcare system through a holistic approach. The change in the Basic Customs Duty (BCD) for x-ray tubes and flat panel detectors under the phased manufacturing program is a great strategic move. This will reduce costs and give a boost to domestic manufacturing capacity of India.

Further, announcement of exemption of customs duties on three cancer medications is a notable step in improving treatment accessibility and affordability for a major health challenge. This move shows the Government’s dedication to addressing the cancer burden and alleviating patient financial stress.

In the interim budget the government allocated ₹90,171 crore for the health sector, this investment was crucial for developing sustainable healthcare strategies across India. Additionally, the budget had already announced health coverage for individuals over 70 up to ₹5 lakhs and an innovation fund, which are critical for advancing healthcare. These moves have helped the healthcare sector to strengthen infrastructure.”

Dr Azad Moopen, Founder & Chairman, Aster DM Healthcare
“With 66% of the Indian population still under the age of 35 and an estimated 7-8 million youth entering the job market annually, Union Budget 2024-25 provides a much-needed impetus to advancing employment opportunities and youth upskilling, supported by focus on comprehensive development for the country. Although healthcare did not seem to have a major focus this time, it is promising to see the 12.5% hike in budget allocation for the sector at Rs. 89,287 crores as compared to the last Budget.

In a period of maintaining the status quo, the government is taking bold strides with initiatives outlined in the Interim Budget 2024, including the establishment of new medical colleges, the promotion of vaccines for cervical cancer, expanded maternal and child care schemes, and the innovative “You Win” platform for immunisation.

Additionally, the proposed reduction in customs duties on x-ray tubes and flat panel detectors for domestic x-ray machine production, alongside the exemption of three cancer medicines from customs duty, marks a significant relief for cancer patients nationwide. This progressive budget underscores a commitment to fostering inclusive growth within the healthcare sector, striving to bridge the rural-urban divide and ensure equitable access to essential services.”

Dr Praveen Gupta, Principle Director and Chief of Neurology, Fortis Hospital
“Broad reforms, combined with nine priorities and initiatives will enable the development of advanced healthcare solutions, ensuring that the sector keeps pace with global technological advancements. The integration of advanced technology and the creation of comprehensive databases will further enhance the efficiency and accessibility of healthcare services, benefiting both providers and patients. Effective collaboration between the government and the private sector will be essential to fully realize the potential of these initiatives.

The exemption of custom duties on three cancer medicines and reduction of duties on certain medical technologies such as x-ray tubes and flat panel detectors is a significant move to strengthen domestic capabilities in the healthcare sector. Though, these measures are far less than expectations, however they will make advanced cancer treatments more affordable and accessible, addressing a critical need given the high cost of such treatments. Additionally, priorities align with the broader goal of enhancing infrastructure investment and energy efficiency, creating a more conducive environment for improving healthcare delivery and outcomes in India.”

Sandhya J, Group CFO, Narayana Health
“The Union interim Budget had allocated Rs.89,287 crore to health care. So, there is no major change in the allocation to healthcare sector. The Finance Ministry has made commendable efforts to address long-term capacity building through nine broad priorities and a clear roadmap. We welcome the budget’s focus on exempting key cancer medicines and reducing import duties on med tech technologies such as x-ray tubes and flat panel detectors to make them more affordable. These measures will definitely give us the ability to pass the benefits to patients.

While we appreciate these initiatives, however, certain expectations remain unmet. The healthcare sector is a long-term industry that requires long-term affordable credit facilities. Similar to infrastructure projects that have access to 20-30year bonds, hospitals should receive the same status and have access to extended credit term facilities. As an essential service, lack of Input credit increases the cost of service, which could have been addressed.

Customs duty is a high burden as well as 80% of medical equipment in the country are imported and we will definitely await some positive action in that space. The aim is to bring down the landed cost of health care. We would also look forward to see how the thrust on research helps innovation in health care. As these get addressed in the future, it will greatly benefit the healthcare industry and contribute to sustainable growth.

Finance Minister Nirmala Sitharaman has outlined the government Nine Priorities and some of them would have trickle down effects on healthcare sector too. Though the budgetary fund allocations remain the same as mentioned in the interim budget.”

Vishal Bali, Executive Chairman, Asia Healthcare Holdings
“What the Budget achieves is the focus on youth and employment through schemes with an outlay of Rs 2 trillion, support for MSME’s, an outlay of Rs 1.52 trillion towards agriculture, fiscal deficit of 4.9% of GDP and Infrastructure investment of 3.4% of GDP. What the budget does not achieve is give focus to healthcare as another pillar of Viksit Bharat, give it the capital outlay of more than 2.5% of GDP and reforms that will support the growth of the sector and give an impetus to indigenous manufacturing of medical technology. An outlay of Rs 90,958cr is a mere 12.9% growth over the previous year which is insufficient towards bridging the demand supply gap in India’s healthcare.”

Abrarali Dalal, Director & CEO, Sahyadri Hospitals Pvt Ltd.
“The government has allocated ₹89,287 crore for the development, maintenance, and improvement of the country’s healthcare system, a slight increase from ₹88,956 crore in FY24. The union budget’s removal of basic customs duty on three critical cancer treatment drugs and the reduction of duties on medical technologies such as X-ray tubes and flat panel detectors will notably enhance the affordability and accessibility of healthcare, particularly for advanced cancer treatments. Through the ‘Anusandhan National Research Fund’ the increased research funding will foster innovation, development and improved treatment options in the healthcare sector. Although these initiatives show promise, there is still potential for further enhancements to fully bolster India’s healthcare infrastructure.”

Dr Manisha Karmarkar, CEO, DPU Super Specialty Hospital, Pimpri, Pune
“The government’s decision to extend custom exemptions for three additional cancer medicines is a commendable step towards making critical treatments more accessible and affordable for patients battling cancer. This initiative will undoubtedly enhance the quality of care and provide much-needed relief to countless families.

Furthermore, the proposed changes in the Basic Customs Duty (BCD) on x-ray tubes and flat panel detectors, aimed at aligning with the phased manufacturing program, are a significant stride towards bolstering our domestic medical equipment manufacturing capabilities. By synchronizing these duties with domestic capacity addition, the government is fostering an environment conducive to innovation and self-reliance in the medical technology sector.

These policy changes reflect a strong commitment to strengthening our healthcare infrastructure and ensuring that advanced medical treatments and technologies are within reach for all.”

Behram Khodaiji, CEO of Ruby Hall Clinic
“We are delighted to see the government’s proactive measures in the Union Budget 2024 aimed at providing substantial relief to cancer patients. The changes in Basic Customs Duty (BCD) for X-ray tubes and flat panel detectors used in x-ray machines under the phased manufacturing program are highly appreciated. Synchronizing these changes with domestic capacity addition will bolster our diagnostic capabilities and promote the growth of the domestic medical device industry. These measures reflect a comprehensive strategy to enhance India’s healthcare infrastructure and patient care. The exemption of three additional cancer treatment medicines from customs duty is a welcome step towards making vital treatments more accessible and affordable for cancer patients.”

Dr Sanjeev Singh, Medical Director, Amrita Hospital, Faridabad
“We welcome the healthcare initiatives outlined in the Union Budget 2024-25. The exemption of customs duties on three cancer treatment medicines is a significant step toward making life-saving treatments more affordable for patients. Additionally, the proposed changes in basic customs duties for x-ray tubes and flat panel detectors will bolster the domestic manufacturing of essential medical equipment, ensuring better accessibility and reduced costs. The government’s commitment to constructing new medical colleges is also commendable, as it will help bridge the gap in medical education and healthcare services, especially in developing areas of the nation. These measures reflect a positive move towards improving healthcare infrastructure and patient care across India.”

D. S. Negi, CEO, Rajiv Gandhi Cancer Institute & Research Centre (RGCIRC)
“We welcome the government’s announcement in the Budget 2024-25 to fully exempt three additional cancer medicines from custom duties. This is a significant step towards making essential cancer treatments more accessible and affordable for patients across India. The high cost of cancer medications has been a major barrier for many patients, and this exemption will undoubtedly provide much-needed financial relief to those battling the disease.

Furthermore, the proposed reduction in the basic custom duty (BCD) on x-ray tubes and flat panel detectors for use in medical x-ray machines are commendable. By aligning these changes with domestic capacity addition, the government is not only supporting the growth of local manufacturing but also ensuring that advanced medical technology is available to improve diagnostic accuracy and treatment outcomes for cancer patients. We applaud the government for these decisive measures and are confident that they will bring us closer to a future where every cancer patient has access to the best possible care.”

ASSOCIATIONS

Rajiv Nath, Forum Coordinator, AiMeD
“The Union Budget-2024 is visionary and progressive. It will give a boost to the country’s overall economic growth. It reflects the determination of Prime Minister Shri Narendra Modi to realize the goal of a US $ 10 trillion economy by 2030 and Viksit Bharat by 2047.”

Nine priorities of the government – productivity and resilience in agriculture; employment and skilling; inclusive human resource and development, and social justice; manufacturing services; urban development; energy security; infrastructure; innovation and research and development; and next generation reforms – will act as a catalyst for the country’s overall economy.

We are thankful to the GoI for the reduction in duty on the import of components of x-ray equipment until these get to be produced in India. This enables continuity in investment in efforts to become a manufacturing hub of x-ray equipment globally.

In a representation to Arunish Chawla, Secretary, DoP, dated January 19, 2024, AiMeD had raised the issue of increase in custom duty and removal of benefits for import of x-ray tube and flat panel detector under the Phased Manufacturing Programme (PMP). Since there are no domestic manufacturers available for these two critical components, the relief from the government is appreciable.

We at AiMeD had, however, been hoping that the recommendations of Department of Pharmacy (DoP), which were backed by DGHS, would have helped on nominal duty increase on at least those medical devices that India had substantial manufacturing capacity as demonstrated during Covid-19 pandemic times.

During Covid-19 pandemic, Indian medical devices showed its resilience in manufacturing syringes, masks, oximeters, oxygen concentrator and certain testing kits while the so-called world leaders were caught unawares. Removal of nil duty exemption on some of these medical devices would have acted as a further enabler for Make in India drive and enhance our global competitiveness.

The imports of medical devices are consistently over Rs 61,000 crore for the last three years and regretfully this year have increased by 13 per cent to Rs 69,000 crore. To address this, AiMeD has proposed the implementation of a 5 per cent health cess on custom duty for the remaining medical devices as this was earlier applied to a limonite’s medical devices and this health cess was used to fund resources for Ayushman Bharat.

Another pivotal aspect highlighted by AiMeD was the necessity for trade margin capping. By monitoring the Maximum Retail Price (MRP) of imports, the Government will curb the excessive mark-ups often seen in the market. This measure will make medical devices more affordable and accessible to the Indian populace, ultimately benefiting public health as consumers are affected not by import duty protection as much as by artificially inflated MRP of medical devices.”

Pavan Choudary, Chairman, Medical Technology Association of India (MTaI)
“The budget harnesses both the domestic and international currents to optimally forge the path ahead. This ambition is logical as India has 18% of the world’s population but only 5% of the world’s wealth and technology. The West and Japan together have 15% of the world’s population but have 70% of the world’s wealth and technology! So, the policy makers haven’t ignored such a big reservoir of Capital and technology and that is why the emphasis on FDI facilitation. Coming to MedTech, it is FDI which brings most of the investment in the sector and it scaled a new high of USD 502 million in 2023.

As healthcare skilling benefits substantially from the government’s overall emphasis on skilling, this is a welcome focus area too. Healthcare skilling helps us tap the lucrative global market as well. Currently a whooping 24% of foreign workforce in healthcare in the world is from India! And the government targets exporting 300,000 Healthcare Workers (including doctors, nurses, technicians) annually. Train in India for the world, needs international MedTech’s engagement and we stand ready to provide it.

Customs duty reduction on finished goods is a pending demand. Even though that has not happened, the reduction of custom duty on X ray machine components is perhaps reflective of the realization that only those products which we can manufacture in the short to mid-term can be protected without triggering adverse unintended consequences. We do hope that tariff barriers on finished MedTech products which are not import substitutable in the short to mid-term, will eventually, come down. This would further patient affordability and foster competition and quality.”

Dr Harsh Mahajan, Chairman, FICCI -Health Services Committee and Founder & Chairman, Mahajan Imaging & Labs
“This is a budget of continuity and for inclusive growth. Exemption of three life saving medicines for cancer treatment is a welcome step. Exemption of customs duty on components of xray tubes and digital detectors, will lead to spurring of indigenous manufacturing of digital xray machines in India.

Allocation of funds for innovation and skilling will also help those who are working in the healthcare sector.”

Ganesh P Sabat, CEO – Sahajanand Medical Technologies Ltd & Co-Chair FICCI Medical Devices Committee
“The Union Budget 2024 by Finance Minister Nirmala Sitaraman a crucial step towards ensuring India’s continued economic growth and development in the next 5 years to come as we inch towards achieving the Sustainable Development Goals by 2030. The ‘Nine Priority Areas’ — Agriculture, Employment, Inclusive Development, Manufacturing and Services, Urban Development, Energy, Infrastructure, Innovation and R&D, and Next Generation Reforms are well curated to boost infrastructure development, create employment opportunities, and reduce the urban-rural divide while promoting digitalization, Health-tech benefits and stimulating economic growth in the manufacturing industry with an emphasis towards Research and Innovation. The announcement of 12 new industrial parks under the National Industrial Corridor, focusing on creating integrated zones, is expected to significantly revise manufacturing growth whilst meeting the rising job demands through the transformative boost in the education sector. From the MedTech industry, while we go through the final nuances and allocations in the budget document, however the focus on cancer care drugs, puts back to flash the need for India to do more towards Non-Communicable Diseases (NCDs) especially when it comes to areas like cardiac care where India is inching to become the disease capital globally. This will not only motivate us to sustain innovation but will also attract more investments in research and development of newer product therapies ensuring patient safety, better outcomes and give a boost to the Made-in-India for the World as we set our goals towards ‘Viksit Bharat’ 2047.”

Dr K Hari Prasad, Group Chairman & Non-Executive Director, Quality Care India Ltd.
“Thank the Finance Minister for her continued efforts in making healthcare more accessible by exempting additional cancer medications from customs duties, building on the exemptions introduced in the last budget. This, along with the customs duty exemptions for foods and drugs used for rare diseases, significantly alleviates the financial burden on patients who are already grappling with the trauma of their conditions.

We eagerly anticipate further exemptions for drugs and medical consumables related to other lifestyle diseases, which will help make healthcare accessible to even more people. However, it is worth noting that the increase in the healthcare budget allocation compared to the previous year is marginal. There is still a pressing need to substantially bridge the gap in achieving the vision of quality healthcare for all.”

CONSULTANTS

Hitesh Sharma, Partner and Life Sciences Leader – Tax, EY India
“The budget has maintained a neutral stance towards the Pharmaceutical and Healthcare sector. Noteworthy advancements include a commitment to enhance R&D, with an emphasis on basic research and the development of prototypes – reemphasis of commitment made in interim budget. Additionally, the budget proposes the elimination of customs duties on select cancer medications and a reduction of Basic Customs Duty (BCD) on specific x-ray related products. Also skilling initiative and support would help the healthcare sector. However, the budget did not focus on healthcare infrastructure, the manufacturing of medical devices, or incentives for R&D, which were notable omissions.”

Anjan Bose, Founding Secretary General, NATHEALTH; Former President, Philips Healthcare & Consumer Lifestyle; and currently advisor to eminent organizations
“This was being termed a Budget of Hope. FM’s announcements point towards focus on growth, job creation, skilling, youth, MSMEs, digital infrastructure, green energy, fiscal prudence, incentivising states…Abolition of Angel tax for all classes of investors should have growth-enabling impact on start-up ecosystem including that of Healthcare especially HealthTech segment…For Healthcare sector, there were positive announcements on import duty rationalization for some cancer medicines and medtech items like x-ray tube and flat panel detector…there were many asks from the sector like on Ayushman Bharat pricing, GST rationalisation, overall budget allocation for Healthcare sector etc…so we have to wait for the details with the fine prints to come out.”

For Union Budget speech of Finance Minister, https://medicalbuyer.co.in/finance-minister-presentation-union-budget-2024-25/
MB Bureau