Summary –
Items falling under List 3 attract concessional duty of 5% while those falling under List 4 are exempted from import duty. List 4 includes critical items such as lifesaving drugs and diagnostics tests amongst others.
Government has allowed 5% import duty on diagnostics kits for the detection of Hepatitis B and HIV to boost domestic manufacturing based on the recommendations of the Association of Diagnostics Manufacturers of India (ADMI).
Diagnostic
ADMI had made recommendations to the Union Ministry of Finance in November 2021 regarding custom duties on in- vitro diagnostics (IVD) items falling under Lists 3 and 4 of the Customs Tariff list.
Items falling under List 3 attract concessional duty of 5% while those falling under List 4 are exempted from import duty. List 4 includes critical items such as lifesaving drugs and diagnostics tests amongst others.
“Diagnostics kits for the detection of Hepatitis B and HIV along with some ELISA kits, have been shifted from List 4 to List 3 based on ADMI’s recommendations. India has more than 15 domestic manufacturers for these products. There are validated and sufficient local manufacturing capacities for these products with a local content of more than 50%. A 5% import duty on these products will provide an advantage to locally manufactured products and encourage the domestic diagnostics industry,” said Veena Kohli, President, ADMI.
ADMI had also recommended that diagnostics kits and reagents based on obsolete technologies like Radioimmunoassay (RIA) should be omitted from List 4, which has also been approved. RIA was introduced more than 60 years ago primarily for the measurement of hormones. It requires the use of radioactive reagents which may be hazardous to health.
The Department of Pharmaceuticals (DoP) released the revised Public Procurement Order (PPO) on February 16, 2021, giving preference to 135 locally manufactured diagnostics parameters, in public procurement.
“ADMI had worked with the Government departments for over two years to establish sufficient local manufacturing capacity, competition and local content for these 135 IVD parameters. These policy decisions taken by the Government of India will provide the much needed impetus to the Indian diagnostics industry,” Kohli concluded.