The Association of Indian Medical Device Industry (AiMeD) has cautioned that changing GST rates for medical devices could impact domestic competitiveness, if not managed carefully. Most devices now have a 12 percent GST, while inputs are taxed at 18 percent, causing an inverted duty structure and margin pressures. AiMeD noted that proposed GST changes—to either five per cent or 18 percent—both present significant risks requiring nuanced consideration.

“For equipment, electronics, reagents and implants, reducing GST to five percent would enhance affordability and market reach. However, applying a five percent rate to low-margin consumables like syringes, catheters and IV sets would worsen the inverted duty structure, increasing costs for Indian manufacturers and making imports cheaper. Retaining 12 percent GST for most consumables while allowing five percent for high-value equipment is the most balanced approach,” said Rajiv Nath, Forum Coordinator, AiMeD. 

Nath further emphasised that GST policy choices will directly impact patients and consumers as well as manufacturers.

“Raising GST to 18 percent would increase medical device costs for hospitals and households, while a flat five percent GST without refund reforms may create supply risks by discouraging local production. A calibrated structure is, therefore, essential to ensure both affordability for consumers and sustainability for Indian manufacturers,” he added.

Industry representatives from Indian Rubber Gloves Manufacturers Association (IRGMA) highlighted that nitrile gloves remain a special case, where manufacturers have sought 18 percent GST due to very high input credit accumulation and low value addition in a highly competitive price-sensitive import-dominated market.

AiMeD recommends streamlining GST refunds and allowing refunds on input services and capital goods to ease cash flow. GST was designed to tax value addition without reducing competitiveness. It also proposes raising the health cess on imports from five percent to 10 percent, with revenues directed to Ayushman Bharat, to offset the price advantage of cheaper imports.

“With Indian manufacturers already facing around 15 percent cost disability against imports from China and ASEAN countries, GST policy must support Make in India, not disadvantage it. A calibrated GST structure can simultaneously promote affordability for patients, protect consumer interests, strengthen domestic manufacturing, and align with the government’s vision of Atmanirbhar Bharat,” Nath added.