India's X-Ray Sector Set for Change with Custom Duty Reductions

In the Union Budget 2024, Finance Minister Nirmala Sitharaman made a notable announcement regarding medical equipment, including X-Ray machines. The budget introduced exemptions on basic customs duties for specific cancer drugs and revised duty rates for X-ray components. According to industry stakeholders the medical device market is likely to grow at an exponential rate, reaching $50 billion by 2030 and poised to a five fold increase to reach $ 250 by 2047.

Furthermore, India's imports of medical devices have consistently been over INR 61,000 Cr for the last three years, and this year, they have increased by 13% to INR 69,000 Cr.

This policy change aims to bolster domestic manufacturing and improve accessibility to advanced medical technologies. Allocating INR 36,000 Cr for the National Health Mission (NHM) further underscores the government's commitment to enhancing public health infrastructure.

Impact on Digital X-Ray Machines

The recent reduction in customs duties on X-ray components, specifically X-Ray tubes and flat panel detectors, is expected to have a substantial impact on the Indian healthcare sector.

Speaking exclusively with DHN, Kabir Mahajan, Associate Director at Mahajan Imaging & Labs, explained that while the decrease in duties should eventually lower costs for digital X-Ray machines, achieving a fully self-sufficient domestic manufacturing base may take several years.

Mahajan noted that the immediate effect of reduced customs duties would be decreased component costs, which could stimulate local production efforts.

However, he emphasized that overcoming challenges such as the need for advanced technology, substantial capital investment, and developing a robust supply chain would take time. The full benefits of these changes will be realized gradually as domestic production scales up.

Benefits of Boosting Domestic Manufacturing

The push towards increasing domestic manufacturing of X-Ray components presents several advantages for the healthcare sector.

Firstly, lower customs duties are expected to make local production more cost-effective. This, in turn, could lead to reduced overall costs for digital X-Ray machines, making advanced imaging technology more accessible across various healthcare settings.

Additionally, enhancing domestic manufacturing capabilities will mitigate risks associated with global supply chain disruptions and fluctuating international prices.

A stable and reliable supply of X-Ray components will help healthcare facilities meet the growing demand for diagnostic imaging.

Mahajan also highlighted that growing local manufacturing would foster technological innovation and skill development. As domestic companies ramp up production, they will contribute to job creation and bolster India's position in the global medical device market.

Challenges Facing Domestic Production

Despite the positive outlook, the domestic industry faces several challenges in producing X-Ray tubes and flat panel detectors. Technological complexity is a significant barrier, as these components require specialized technology and precision engineering. Domestic manufacturers will need to make substantial investments in advanced machinery and technology to meet the required quality standards.

Another crucial challenge is building a reliable supply chain for high-quality raw materials. Developing this supply chain is essential to ensuring a consistent supply of necessary materials for manufacturing X-Ray components.

Moreover, adhering to stringent regulatory and quality standards presents additional hurdles. The processes for meeting these standards are often complex, time-consuming, and costly.

Mahajan pointed out that while the reduced customs duties offer a boost, overcoming these challenges is vital for the domestic industry to realize its full potential in producing X-ray components.

Future Expectations for Domestic Production

Looking ahead, Mahajan estimated that it would take several years for domestic production to meet the demand for X-Ray components in India substantially.

While reducing customs duties will stimulate local manufacturing, establishing a fully operational production infrastructure requires time. Investment in technology, skilled labor, and building a reliable supply chain are critical factors influencing the pace of this transition.

Mahajan suggested several measures to further support the growth of local medical device manufacturing. These include increasing financial incentives, prioritizing investment in research and development (R&D), enhancing skill development programs, and fostering public-private partnerships. Such steps, combined with the recent duty revisions, could significantly bolster the domestic medical device sector.

Wrapping Up

The Union Budget 2024's revisions to customs duties on X-ray components mark a significant step towards enhancing India's domestic manufacturing capabilities.

While the immediate impact on cost and availability may take time to materialize fully, the long-term benefits of a more robust domestic manufacturing sector are clear.

As the industry adapts to these changes, improved access to advanced medical imaging technologies will benefit healthcare providers and patients nationwide.