Local industry cries foul over nil import duty on Covid-19 medical supplies

Indian players who have invested in their units to rise up to the occassion say they may end up with idle capacity once Chinese firms ramp up production and bring prices down

Smita Shah, managing director of Mediklin Healthcare, a firm that makes protective gear has ramped up her production in the last one month. Besides paying for manpower who cannot come, she is paying incentives to those workers who work at her factory in Silvassa and now stay within the premises.

There is huge demand for personal protective equipment (PPE) kits for healthcare workers and many units like Mediklin have ramped up production. These units now find themselves in a spot as the government exempts duty on imports of PPE, masks, ventilators and Covid-19 test kits.

Basic customs duty and health cess have been abolished on these products with immediate effect. “In the context of Covid-19 situation, considering the immediate requirement of ventilators and other items, the Central Government has granted exemption from Basic Customs Duty and Health cess, on the import of these goods, with immediate effect," the government said. The exemption on all these products will be valid till September 30.

At present, customs duty on medical equipment is 7.5 per cent, while health cess is around 5 per cent.

Shah claims that at present Chinese protective gear and masks are available at high prices in India, but it is only a matter of time before manufacturers in that country ramp up their production and bring down the prices. Indian players who have invested in their units to rise up to the occassion would then find no buyers and there would be idle capacity in the country.

The manufacturers' lobby has already written to the government with their views. Rajiv Nath, forum coordinator of AiMED, said that the industry is not against imports to avert the crisis, but if it comes at the cost of local industry, they would take up the matter with the government.

A senior government official said that the rollback of import duty has been done to ensure that there is no shortage of supplies in the country in the times of crisis.