Medtech, pharma welcome duty relief, seek GST cuts on key inputs

Industry welcomes customs duty exemption on petrochemicals but urges GST relief on inputs and faster refunds to ease cost pressures amid West Asia disruptions

Drugmakers and medical device manufacturers have demanded temporary relief on GST rates on key input raw materials and prompt overdue refunds, even as they welcomed the Centre’s move to provide full customs duty exemption on critical petrochemical products till June 30, 2026.

 

The Union Finance Ministry on Thursday decided to exempt 40 petrochemical products from customs duty, including those used in the manufacturing and packaging of drugs and medical devices such as polypropylene, polycarbonate and polyvinyl chloride (PVC) resin.

 

“This measure has been taken as a temporary and targeted relief in order to ensure continued availability of critical petrochemical inputs for domestic industry, reduce cost pressures on downstream sectors, and safeguard supply stability in the country,” the Ministry said on Thursday.

 

While welcoming the step, the domestic medtech manufacturers’ lobby Association of Indian Medical Device Industry (AIMED) said that it reiterates its request for temporary relief on GST rates for key input raw materials used in medical devices, as well as prompt overdue refunds due to the inverted GST tax structure.

 

“Reducing GST from the current 18 per cent on inputs to 5 per cent would provide much-needed cumulative relief, further mitigating war-induced cost escalations and bolstering the competitiveness of India's medical devices manufacturing ecosystem not only for Indian consumers but globally,” said AIMED Forum Coordinator Rajiv Nath.

 

The move comes at a time when the ongoing West Asia conflict is having an impact on energy supplies, freight costs and the timely movement of products. The Centre had recently also extended fiscal benefits under the RoDTEP scheme for exporters by six months, until September 30, amid disruptions to global trade caused by the ongoing West Asia crisis.

 

“The war has particularly affected India’s pharma and medtech sectors, with the conflict affecting input costs and squeezing margins for smaller exporters operating on tight pricing structures or tender-driven contracts, due to rising freight and insurance costs,” an executive of a Delhi-based medtech firm told Business Standard.

 

“In this difficult situation, we appreciate the Government of India’s proactive efforts to mitigate potential supply-related disruptions,” said Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance (IPA).

 

Himanshu Baid, managing director of medtech firm Poly Medicure, added that the duty exemption will provide much-needed relief to domestic manufacturers, especially MSMEs, with raw materials such as polypropylene, acrylonitrile butadiene styrene (ABS), polycarbonate and PVC resin forming the backbone of medical consumables manufacturing.

 

Nath said that the government’s action will ensure supply stability, lower input costs for the sector and support uninterrupted production of life-saving devices amid global volatility.

 

“This exemption will benefit not only medical devices but also pharmaceuticals, packaging, and other downstream industries, ultimately easing burdens on healthcare providers and patients,” he added.