India will reduce import duties on medical devices covered in the production-linked incentive (PLI) scheme only from the sixth year onward, under its free trade agreement with the UK, a government official said on Thursday. The conclusion of negotiations for the agreement was announced by both sides on May 6. It is aimed at boosting bilateral trade in goods and services to USD 120 billion in the next five years from the present USD 60 billion.
"Aligning the consumer needs with the Make in India programme, only duty reduction from the sixth year (no elimination) offered on medical devices coming under the PLI," the official said.
While the import duty on the sector is up to 7.5 per cent in India, it stands at 4.2 per cent in the UK.
Some industry experts have raised concerns that a reduction in the duty may lead to the dumping of these items from countries like China. To curb this, India should impose high value-addition norms for the sector to allow imports at concessional duty.
As per estimates, India's medical devices imports from the UK rose by over 35 per cent to Rs 2,295 crore in 2023-24. The country's exports are around Rs 1,000 crore.
The major devices traded between the two countries include disinfectants, spectacles, breathing appliances, hearing aids, orthopaedic appliances, radiography apparatus, and appliances used in medical, surgical, dental and veterinary sciences.
The government has announced a PLI incentive scheme to promote domestic manufacturing of medical devices.
Under the PLI Scheme for Promoting Domestic Manufacturing of Medical Devices, 19 green-field projects have been commissioned and production of 44 products, including high-end medical devices like linear accelerators, MRI machines, CT-Scans, Mammograms, C-Arms, Ultrasound machines, etc., which were previously imported into the country, has started.
In the agreement, India will reduce tariffs on 90 per cent of UK imports, with 85 per cent of these tariff lines or product categories will become tariff-free within ten years.
The official said the pact has also established mechanisms to address non-tariff barriers (NTBs) to ensure smoother flow of goods and services and thereby, preventing unwarranted restrictions on Indian exports.
To address NTBs, both sides will sign mutual recognition agreements (MRAs).
The UK has agreed to the digital transmission of a certificate of origin.
The legal scrubbing of the text is expected to take around three months, followed by about a year for approval by the UK Parliament. The deal will be implemented thereafter on a mutually agreed-upon date.
"Aligning the consumer needs with the Make in India programme, only duty reduction from the sixth year (no elimination) offered on medical devices coming under the PLI," the official said.
While the import duty on the sector is up to 7.5 per cent in India, it stands at 4.2 per cent in the UK.
Some industry experts have raised concerns that a reduction in the duty may lead to the dumping of these items from countries like China. To curb this, India should impose high value-addition norms for the sector to allow imports at concessional duty.
As per estimates, India's medical devices imports from the UK rose by over 35 per cent to Rs 2,295 crore in 2023-24. The country's exports are around Rs 1,000 crore.
The major devices traded between the two countries include disinfectants, spectacles, breathing appliances, hearing aids, orthopaedic appliances, radiography apparatus, and appliances used in medical, surgical, dental and veterinary sciences.
The government has announced a PLI incentive scheme to promote domestic manufacturing of medical devices.
Under the PLI Scheme for Promoting Domestic Manufacturing of Medical Devices, 19 green-field projects have been commissioned and production of 44 products, including high-end medical devices like linear accelerators, MRI machines, CT-Scans, Mammograms, C-Arms, Ultrasound machines, etc., which were previously imported into the country, has started.
In the agreement, India will reduce tariffs on 90 per cent of UK imports, with 85 per cent of these tariff lines or product categories will become tariff-free within ten years.
The official said the pact has also established mechanisms to address non-tariff barriers (NTBs) to ensure smoother flow of goods and services and thereby, preventing unwarranted restrictions on Indian exports.
To address NTBs, both sides will sign mutual recognition agreements (MRAs).
The UK has agreed to the digital transmission of a certificate of origin.
The legal scrubbing of the text is expected to take around three months, followed by about a year for approval by the UK Parliament. The deal will be implemented thereafter on a mutually agreed-upon date.
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