"India is now making world class goods and exporting such products. We have made considerable progress in medical equipment, too. Till a few years back, we were dependent on imports for medical equipment. Now, not only we are manufacturing medical equipment but also exporting them in large quantities. This sector deserves further fillip," Sitharaman said in her second Union Budget presentation in Parliament.
The health cess will be imposed on imports of medical devices, except those exempt from BCD (basic customs duty).
"To achieve the twin objectives of giving impetus to the domestic industry and also to generate resource for health services, I propose to impose a nominal health cess, by way of a duty of customs, on the imports of medical equipment keeping in view that these goods are now being made significantly in India," she added.
The Indian medical devices industry has responded positively to the proposals in the Budget.
"Finally we may have something to help address over Rs 38,837 crore, 80-90 per cent import dependent Indian medical devices sector," Rajiv Nath, Forum Coordinator of Association of Indian Medical Device Industry (AiMeD), said in a statement.
AiMeD is an Umbrella Association of Indian Manufacturers of Medical Devices covering all types of Medical Devices including Consumables, Disposables, Equipments, Instruments, Electronics, Diagnostics and Implants.
According to the Finance Minister, the proposed scheme to encourage manufacture of mobile phones and ships can be adapted for manufacture of medical devices too with suitable modifications.
"It's an excellent idea to tax imports of medical devices to fund the capacity building of healthcare delivery in public healthcare and with twin advantage of accelerating medical devices manufacturing as a 'Make in India' enabler so that Indian national healthcare security concerns are addressed the inadequacy of which is being exposed in ongoing crisis to address the coronavirus epidemic preparedness," Nath added.
Healthcare industry body NATHEALTH also welcomed the move.
"We welcome healthcare infra being considered under the ambit of new infrastructure push and creation of a "Make in India" programme to boost manufacturing of medical equipments and localization of the manufacturing and innovation value chain," said Siddhartha Bhattacharya, Secretary General, NATHEALTH.
( With inputs from IANS )