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P.T. Jyothi Datta

NEW DELHI, May 6

THE domestic medical devices industry fears that its exports would see a negative growth this year, following the scrapping of the brand-promotion scheme in this year's Exim Policy.

Faced with competitive generic products from the Chinese and Korean markets, the nascent domestic segment comprising over 100 manufacturers, has urged the Union Commerce Ministry to either revoke the scrapping of the scheme — where the manufacturers could avail 20 per cent DEPB benefit on the product group — or provide an alternate buffer.

Since it is unlikely that the brand promotion scheme would be brought back, alternatively the industry has sought a review of the value cap of Rs 55 per kg to Rs 1,950 per kg or the equivalent to DEPB of 17 per cent.

"The earlier value cap represented only the value of the plastic used in the medical product and not the complete sterile medical device which consists of steel/rubber and other value added components," the All India Syringes and Needles Manufacturers' Association said in its representation to the Union Commerce Minister.

The association comprises makers of disposable and auto-disposable syringes, disposable needles, non-pyrogenic sterile intravenous infusion set components and surgical blades.

Mr Pardeep Sareen, representative with the Hindustan Syringes and Medical Devices Ltd (HMD), told Business Line that the industry feared a de-growth of 63 per cent in this year's exports, as a result of scrapping the brand-promotion scheme.

HMD are the makers of the popular medical devices brands such as Dispovan, Scalpvan, Cathula, Unolok and Vaku8, which get exported under the same names.

In 1999, when the average price was Rs 11.50 per piece, the DEPB benefit was Rs 2.30 (20 per cent) per piece. "In 2000, a value cap of Rs 55 per kg was introduced and this represented the value of the plastic and not the medical item as the equivalent worked out to 0.60 per cent DEPB on the finished product."

However, later the DGFT had reviewed the situation and offered an alternative of 20 per cent DEPB on Indian branded exports, on similar lines as that provided by the Chinese Government for `Made in China' products.

The current average price is Rs 7.75 per piece and given the current situation, manufacturers are left with no choice but to increase price by 15 to 20 per cent, which the customer is unwilling to accept. Maintaining the price would result in 15 per cent to 20 per cent loss of profits, he pointed out, speaking on behalf of the industry.

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