Setting the record straight: USTR claims vs India's medical device policy

The United States Trade Representative (USTR) has highlighted issues in its 2025 National Trade Estimate (NTE) report about barriers to exporting medical devices to India. These concerns include high tariffs, price controls, and unclear guidelines for importing refurbished medical devices. The USTR earlier expressed concerns about the lack of adjustments in price caps for essential medical devices such as coronary stents and knee implants. In this context, it is important to understand the issues involved and address the claims made by US multinational corporations (MNCs) via the USTR.

 

India’s Medical Devices Policy 2023 is an initiative aimed at reducing the country’s 70 per cent dependence on imports, primarily from the US, which has a significant presence in the market. The reliance on imports has affected accessibility, availability, and affordability, leading the government to introduce production-linked incentive (PLI) schemes, medical device parks, and regulatory changes under the Central Drugs Standard Control Organisation (CDSCO), Bureau of Indian Standards (BIS), and the Legal Metrology Regulations. The policy promotes domestic manufacturing through medical device parks, schemes for research and development, and fair competition, especially for micro, small and medium enterprises (MSMEs) addressing India's various medical and healthcare needs.

 

Multinational corporations, especially US-based firms, continue to engage in anti-competitive practices such as acquiring local companies to create monopolies and limiting the sale of essential components like X-ray tubes to domestic manufacturers. The Covid-19 pandemic highlighted India's susceptibility to supply-chain disruptions and monopolistic pricing by global entities. Nonetheless, the USTR inaccurately characterises India's policy as protectionist, ignoring the country's legitimate requirements for healthcare security and self-reliance.

 

India has banned imports of refurbished, repaired, and second-hand medical devices to boost domestic manufacturing and ensure patient safety. High-end new machines remain available for those who can afford them, providing choices without harming local industry. While this policy promotes a competitive market, India must still tackle challenges related to availability, accessibility, and affordability due to its large population and low income. This move counters US MNCs’ narrative and positions India as an emerging global medical device hub rather than a protectionist market.

 

The USTR incorrectly portrays India's medical devices sector. It criticises India's tariffs, which are nominal at 7.5 per cent, and the Indian industry seeks a reasonable increase to 10–15 per cent to support domestic manufacturing. The USTR also opposes price controls by India’s National Pharmaceutical Pricing Authority (NPPA) on coronary stents and knee implants, alleging restricted market access for US firms. Despite this, reimbursement rates for US-made stents in some Indian states are nearly double those for Indian manufacturers due to unethical marketing practices, overlooking India's affordability concerns and purchasing capacity.

 

The USTR raises several concerns: regulatory challenges, despite reforms by CDSCO and BIS; customs clearance delays, though Indian Customs has reduced import times; and intellectual property issues, such as patentability criteria and compulsory licensing, which protect public health.

 

The USTR also objects to local content requirements, deeming them discriminatory, despite their importance in promoting domestic manufacturing under the ‘Make-in-India’ initiative. The US Buy American policy similarly restricts Indian manufacturers from bidding for US government contracts. Additionally, the USTR objects to data privacy regulations, even though India aligns its policies with global norms to protect sensitive healthcare data. It also challenges India's standards and certifications, overlooking their significance in ensuring quality and safety, like the emphasis on accreditation, certification, and standards in the US. Lastly, it protests market withdrawal restrictions, which are implemented to prevent sudden supply disruptions and safeguard patient interests.

 

The Indian medical device industry faces challenges from international trade dynamics, regulatory barriers, and domestic policy inconsistencies. There are external challenges — for instance, in the West Asia and North Africa (WANA) region, Chinese product dumping depresses prices as the US Food and Drug Administration (USFDA) has cracked down on Chinese imports. Similarly, in the European Union, the delays and high costs for Conformité Européenne (CE) certification and renewals affect Indian exporters’ market access. Likewise, in Japan, the weaker yen and Indonesia’s preference for local manufacturing reduce India's competitiveness. Further, CDSCO delays in issuing licences and Free Sale Certificates are also hindering Class C and D indigenous manufacturers from accessing global markets.

 

Low tariffs (0–7.5 per cent) discourage local manufacturing, coupled with Harmonised System (HS) misclassification by importers to reduce duties. Additionally, private hospitals prefer high-margin imported brands and even inflated maximum retail price (MRP) tags. Consequently, the benefits of low duty do not result in lowered MRPs.

 

Policy updates are necessary, including revising the Global Tender Exemption (GTE) list to remove 119 medical devices manufactured in India. Multinational companies lobby for mandatory USFDA/CE requirements to limit Indian competition in government tenders. Current Government e-Marketplace (GeM) procurement norms allow relabelled imports with less than 20 per cent domestic content without verification. Given this context, enforcing local value addition criteria is important to support Indian medical device manufacturers.

 

While exposing such misguided narratives of the USTR for MNCs, India's policymakers should focus on supporting domestic medical device manufacturers in any trade negotiations to ensure the availability, accessibility, and affordability of medical devices for India's large and low-income population. Reliance on imports has resulted in high costs and supply vulnerabilities, while practices by multinational corporations may impact self-reliance. An effective Make-in-India strategy can enhance healthcare infrastructure, reduce costs, and provide quality medical devices to all, promoting equitable healthcare for millions.

 

 

Rajiv Nath is Forum Coordinator, AiMeD and Ram Singh, Professor & Head, IIFT New Delhi. 

 

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