US Tariffs Threaten Growth of India’s Medical Device Industry
The U.S. government has announced new reciprocal tariffs on around 60 countries, a historic move aimed at countering high global duties on American products. As part of this measure, Indian medical device exports to the U.S. will now face a steep 26% tariff, raising concerns about potential disruptions to the sector.
On Thursday, the Association of Indian Medical Device Industry (AiMeD) expressed concerns over the impact of these tariffs on the sector’s growth. “India has long been a key supplier of affordable, high-quality medical devices to the U.S., especially in the low-value, high-volume consumables category. However, this new tariff may impact our exports. We must explore alternative opportunities where the U.S. seeks to diversify its supply chain,” said Rajiv Nath, Forum Coordinator at AiMeD.
Trade Imbalance and Comparative Tariffs
In the financial year 2023-24, India exported $714.38 million worth of medical devices to the U.S., while imports from the U.S. to India stood at $1,519.94 million, according to data from the Export Promotion Council of Medical Devices.
A comparison of tariffs imposed on medical device exports to the U.S. reveals:
- India: 26%
- China: 34%
- Europe: 20%
- Vietnam: 46%
- Taiwan: 32%
- Japan: 24%
- South Korea: 25%
- Switzerland: 31%
- Indonesia: 32%
- Malaysia: 24%
- Turkey: 10%
Industry Response
While India may gain a slight price advantage over China (8%) in certain product categories, the overall impact remains uncertain. “The real effect depends on whether Indian prices remain competitive, particularly if the price gap exceeds 15%,” noted Himanshu Baid, Managing Director of Polymedicure.
Baid also highlighted that tariffs are not India’s biggest hurdle in the U.S. market. “Regulatory hurdles in the U.S. are steep, with FDA approval costs ranging from $9,280 to over $540,000, whereas U.S. exporters face relatively minimal costs when entering India. Addressing these imbalances through bilateral collaboration is crucial,” he said.
Call for Government Support
AiMeD has urged the Indian government to engage in bilateral negotiations to address tariff and regulatory disparities. “A balanced approach is essential for India to strengthen its position as a competitive global player in the medical device industry,” Nath emphasized.
