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Brand Scheme Scrapping Irks Medical Devices
Industry
THE domestic medical devices industry fears that its exports would see a
negative growth this year, following the scrapping of the brand-promotion scheme
in this year's Exim Policy.
Faced with competitive generic products from the Chinese and Korean markets, the
nascent domestic segment comprising over 100 manufacturers, has urged the Union
Commerce Ministry to either revoke the scrapping of the scheme - where the
manufacturers could avail 20 per cent DEPB benefit on the product group - or
provide an alternate buffer.
Since it is unlikely that the brand promotion scheme would be brought back,
alternatively the industry has sought a review of the value cap of Rs 55 per kg
to Rs 1,950 per kg or the equivalent to DEPB of 17 per cent.
"The earlier value cap represented only the value of the plastic used in the
medical product and not the complete sterile medical device which consists of
steel/rubber and other value added components," the All India Syringes and
Needles Manufacturers' Association said in its representation to the Union
Commerce Minister.
The association comprises makers of disposable and auto-disposable syringes,
disposable needles, non-pyrogenic sterile intravenous infusion set components
and surgical blades.
Mr Pardeep Sareen, representative with the Hindustan Syringes and Medical
Devices Ltd (HMD), told Business Line that the industry feared a de-growth of 63
per cent in this year's exports, as a result of scrapping the brand-promotion
scheme.
HMD are the makers of the popular medical devices brands such as Dispovan,
Scalpvan, Cathula, Unolok and Vaku8, which get exported under the same names.
In 1999, when the average price was Rs 11.50 per piece, the DEPB benefit was Rs
2.30 (20 per cent) per piece. "In 2000, a value cap of Rs 55 per kg was
introduced and this represented the value of the plastic and not the medical
item as the equivalent worked out to 0.60 per cent DEPB on the finished
product."
However, later the DGFT had reviewed the situation and offered an alternative of
20 per cent DEPB on Indian branded exports, on similar lines as that provided by
the Chinese Government for `Made in China' products.
The current average price is Rs 7.75 per piece and given the current situation,
manufacturers are left with no choice but to increase price by 15 to 20 per
cent, which the customer is unwilling to accept. Maintaining the price would
result in 15 per cent to 20 per cent loss of profits, he pointed out, speaking
on behalf of the industry.
(Ref:- http://www.blonnet.com/2002/05/07/stories/
2002050701810200.htm )
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