Though the Budget’s healthcare related policies are in the right direction, it did not offer anything concrete to incentivise the import-dependent medical devices manufacturing industry, according to players.

Rajiv Nath, Forum Coordinator, Association of Indian Medical Devices Industry (AIMED), said though the focus on healthcare facility for rural population and medical insurance for senior citizens is laudable some concrete steps to build a robust medical devices industry would have brought down the overall healthcare cost, which is one of the biggest challenges.

Waiting for clarity

“Though there have been announcements from the Government to open three medical devices parks, there is no clarity on medical devices policy and regulatory framework, which will affect investments in the sector,” he added.

GSK Velu, Chairman and Managing Director, Trivitron group of companies, said cut in weighted tax deduction in research and development from 200 per cent to 150 per cent from FY18 will have a significant impact on the industry.

Tax relief for R&D

“For an industry which is highly import-dependent, this is not a good move,” he said. Medical devices industry is still nascent in India and tax benefits for R&D are essential for growth as the field is capital intensive.

Finance Minister Arun Jaitley has proposed a new patents regime under which 10 per cent tax on income will be charged on commercial exploitation of patents developed in India. Velu said though this is a welcome move, it will not help the medical devices industry in the short run due to its long gestation period.

The Budget has also proposed 100 per cent tax exemption for the first three years for start-ups. Siraj Dhanani, Founder and Chief Executive Officer, InnAccel, a medical technology start-up, said the initiative will not have much impact on start-ups in the medical technology and devices space as they hardly make any profit for the first 3-5 years.

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