HONG KONG – India has been slowly easing restrictions on the export of its med-tech products, giving hope to domestic manufacturers looking to meet global demand for their output.
In January 2020, all types of facemasks were banned from being exported. Then the country clamped down on export of active pharmaceutical ingredients (APIs) and other items as it geared up to tackle the COVID-19 pandemic.
This situation continued up until May, when the Directorate General of Foreign Trade (DGFT) started prohibiting other goods, such as alcohol-based hand sanitizers from being exported.
But recent notices from the DGFT have seen a slight reversal in trend.
In April, the policy on previously export restricted APIs was revised.
In May, non-medical/non-surgical masks of all types could be exported once again. The restrictions on the export of paracetamol were also lifted.
June seems to be a continuation of that, alcohol-based hand sanitizers were the first to be freed from restrictions, with only those in dispenser pump containers still prohibited from export.
“We are pleased to share that many of the routine IVD diagnostic kits falling under HSN code 3822 have been removed from export restrictions and a few specific items related to COVID-19 testing retained,” Rajiv Nath, the forum coordinator for the Association of Indian Medical Device Industry (AIMED), told BioWorld recently.
“The IVD exporters were a harried lot as they faced the ironic position of a huge fall in domestic demand of non-COVID IVD testing in India and idle capacity alongside a surge in demand and queries from international business.”
Removing these restrictions was one of the goals the association had as unsold inventories piled up. There remain other restrictions AIMED hopes to see lifted soon.
“Next we are hoping for similar good news on the lifting of export restrictions on three-layer masks, for which a huge manufacturing capacity lies unutilized currently,” said Nath.
AIMED estimated that India has an annual production capacity of 1.5 billion three-layer masks. After deducting the numbers from local demand, the surplus capacity is 532.03 million.
The country also supposedly has a manufacturing capacity of 59.4 million pieces of four-layer masks and a production capacity of 31.2 million pieces of N95 masks. There is a surplus capacity of 1.9 million and 1.05 million in each category, respectively.
The surplus comes from manufacturers ramping up their production lines since the outbreak began. But with the export restrictions in place to ensure a domestic stockpile, manufacturers have been unable to get them out to meet overseas demand.
“The world is looking increasingly at India as a dependable source of medical devices,” said Nath.
He shared that AIMED recently joined a webinar held by the Indian Peru Chamber of Commerce (INCHAM) to explore importing COVID-19 related medical devices and other devices from India.
There are also other reasons for India’s med-tech industry to feel optimistic. The Indian government has announced an Aatma Nirbharta (self-reliance) campaign that will see preference given to med-tech suppliers
In the future, tender enquiries for purchases of less than IDR 200 crore (IDR 2 billion/US$26 million) will be reserved for domestic firms. Also, only suppliers with more than 20% ‘local content’ in their goods or services will be allowed to participate in such bids.
The government will also give preference to class I suppliers, those with 50% or more of local content.
“The concept of the class I supplier has been introduced so that in cases where local suppliers are to be given the order, even within that group we should give first preference to the ones whose domestic value addition is significantly high,” said Nath.
Domestic advocacy groups have reacted positively to the news.
“The India medical devices industry is happy that now domestic will be preferred over foreign wherever possible,” said Nath.
“The medical devices sector has always been the backbone of in-patient health care. Despite numerous challenges, it has shown commitment and resilience in the face of adversity and has ensured uninterrupted supply of medical devices to hospitals,” said Pavan Choudary, the chairman and director general of Medical Technology Association of India (MTal).
“But the challenges are only increasing for the sector as it braces for the extension of the lockdown. There is an urgent need for intervention from the government to help the med-tech sector recover and continue fulfilling its role in ensuring critical care services in the country.”
MTal has made several requests to the government, which include: the commitment to a health care infrastructure development package to increase spending; a fiscal package to release all pending payments; lifting duties and cess (a government levy) to increase affordability for patients; restarting elective surgery in all zones; and reducing aviation fuel and logistic costs for device shipment.