India and the UK are poised to strengthen their medical devices trade significantly, thanks to a newly established free-trade agreement (FTA). This deal is anticipated to accelerate imports from the UK, potentially outpacing exports to the region. Industry experts believe that with lower tariffs, this FTA will not only enhance access to medical technologies for consumers in both nations but also catalyze innovations in healthcare.
Potential Challenges of the FTA
While domestic medtech organizations have largely embraced the FTA, they express concerns regarding the risk of “indirect dumping” from third-party countries, particularly China, if adequate safeguard measures are not implemented.
- Pavan Choudary, chairman of the Medical Technology Association of India (MTaI), emphasized the importance of transparency in manufacturing locations. “Every FTA should require clear disclosure of the actual manufacturing sites for all imported goods, as mandated by India’s Central Drugs Standard Control Organisation (CDSCO). This is vital to prevent products from being rerouted from unverified locations,” he stated.
Importance of Value Addition
Experts suggest that a 35% value addition requirement is a crucial criterion that should be integrated into the medtech trade between India and the UK. This rule of origin standard ensures that products undergo significant transformation in their country of origin, qualifying them as local goods.
- A leading manufacturer in the medical device sector noted, “By adhering to the 35% value addition rule, UK manufacturers can prove that their products meet the necessary transformation standards. This measure will help mitigate the risk of products from China or the EU being rerouted through the UK to circumvent tariffs imposed by India.”
The Role of Regulatory Compliance
Choudary further elaborated on the regulatory landscape, stating that “Some regions lack stringent manufacturing regulations, leading to inconsistent standards even within the same country. Ensuring transparent disclosure is essential for compliance and protects patient safety through traceability. This also creates a fair competitive environment for all companies, especially those committed to high regulatory standards.”
Trade Figures Highlight Growth
In the fiscal year 2024, India saw a substantial increase in medical device imports from the UK, amounting to ₹2,295 crores, which represents a 36% rise compared to the previous year. Meanwhile, exports reached ₹1,015 crores, marking a 13% annual increase. Key medical items traded between the two nations include:
- Disinfectants
- Spectacles
- Breathing appliances
- Hearing aids
- Orthopaedic devices
- Radiography equipment
- Medical, surgical, dental, and veterinary appliances
Conclusion
As the India-UK FTA unfolds, it brings both opportunities and challenges to the medical devices sector. The focus on regulatory compliance and transparency will be essential in safeguarding the integrity of trade and ensuring the well-being of consumers in both countries. The path ahead will require close attention to how these agreements are implemented and monitored, paving the way for a mutually beneficial relationship in the healthcare arena.
