Union Budget 2025 targets healthcare, medical education & Al, omitting medical devices.

The overall macro-economic and policy direction measures announced in the Union Budget 2025, particularly focusing on cancer care, medical education, AI, R&D and innovation, is appreciable. There are many key points in the budget announcements that will strengthen the economy and propel the GDP growth. However, without any mention of investment promotion measures for the 70 per cent imports-dependent medical devices sector in the budget speech, industry disappointment was an expected reaction. Let's delve further.

- Dr Manbeena Chawla

Union Minister of Finance and Corporate Affairs Nirmala Sitharaman presented the Union Budget 2025-26 in Parliament on February 1, 2025. While multiple new initiatives within the healthcare sector were announced such as the establishment of new Day Care Cancer Centres in district hospitals; Full exemption from Basic Customs Duty of 36 lifesaving drugs and medicines for treating cancer, rare diseases and chronic diseases; addition of 10,000 seats in medical colleges and hospitals next year; Announcement of National Manufacturing Mission; Promotion of medical tourism etc., expectations of the Medical Devices sector have not been met.

The Indian Medical Devices Industry was expecting an increase in Custom Duty to a nominal 10 per cent to 15 per cent (and as a Predictable Tariff Policy); Correction of Inverted Duty by levying Health Cess of 5 per cent custom duty on balance Medical Devices; Trade Margin Capping by monitoring MRP of Imports; Income Tax benefits for CAPEX and R&D investments in Medical Devices. The industry was also hoping that the government could consider standardising the GST rate of 12 per cent across all medical devices as it would simplify the tax structure, ensuring consistency and ease of doing business.

“The industry is disappointed that expectations of the Medical Devices sector and many of which had been supported by the Department of Pharmaceutical too as an investment enabler under the National Medical Device 2023 policy finds no mention in the budget speech. We were hoping to see the Finance Minister speak about Medical Devices as Make in India enabler and address the 70 per cent import dependence due to inadequate tariff protection with duties at zero to 7.5 per cent in most cases and an ever-rising imports bill that is expected to cross Rs 75,000 crore this year”, said