The ongoing conflict in West Asia has significantly increased input costs for manufacturers of essential medical disposables in India, intensifying pressure on their working capital. In a letter to the Union Finance Ministry, the Association of Indian Medical Device Industry (AIMED) highlighted the urgent need for government intervention to support liquidity, ensure uninterrupted production, and safeguard the supply of critical medical devices to hospitals across the country.
AIMED highlighted that India relies on imports for specialised, medical-grade polymers that meet strict regulatory standards, and that prolonged disruptions could threaten manufacturing continuity and the stability of hospital supplies.
While there are currently no shortages of syringes or other medical disposables, the letter warned that ongoing supply delays and escalating input costs could lead to production slowdowns and leave manufacturers vulnerable to “opportunistic pricing by dominant raw material suppliers.”
The industry continues to face severe working capital constraints due to the inverted GST duty structure, with 18 per cent GST on inputs compared with 5 per cent GST on finished devices, resulting in “large accumulations of unutilised input tax credit and increased bank borrowings,” the letter explained.
To alleviate the strain, AIMED urged the government to fast-track pending GST refunds. The letter noted that while authorities had assured refunds within seven days, many claims from last year’s GST rate reduction remain unresolved, making delays unsustainable amid rising costs. AIMED emphasised that immediately clearing pending refunds and adhering to the seven-day timeline would provide “critical liquidity relief to manufacturers.”
The association also recommended avoiding reductions in import duties on finished medical devices, warning that such a move could disadvantage domestic manufacturers, increase low-priced imports, and undermine progress under Make in India and the Production Linked Manufacturing Ecosystem. Instead, AIMED suggested a temporary, targeted customs duty rebate, possibly three months of 2.5 per cent on raw material imports and 5 per cent on component imports for medical devices under Chapter 90.
The letter further stressed that timely government intervention is essential to maintain employment, stabilise supply chains, and ensure uninterrupted availability of essential medical disposables to hospitals, while safeguarding the domestic medical device manufacturing ecosystem from financial stress.
Source from: https://www.businessworld.in/article/aimed-flags-gst-delays-for-medical-device-makers-600078
