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Medical Device Makers Oppose Zero-Duty Imports Under EU FTA
Context:
The medical devices lobby has formally opposed zero-duty imports under the EU-India Free Trade Agreement (FTA) in a letter to the Department of Pharmaceuticals (DoP).
Reasons for opposition:
- Local Industry Protection: The local medical devices industry fears that zero-duty imports will undermine domestic manufacturers and increase competition from imported products.
- Import Dependency:India is currently 70% dependent on imports for medical devices, with Germany and the Netherlands among the top suppliers.
Concerns Over EU Regulations
- The Association of Indian Medical Device Industry (AiMeD) claims that the EU’s regulatory system allows companies to label themselves as “legal manufacturers” without actual production, leading to “pseudo manufacturing.”
- Unlike the US and India, the EU does not mandate country of origin labelling.
- Request to Exclude Legal Manufacturers: AiMeD argued that entities claiming to be legal manufacturers should not benefit from zero-duty provisions if they cannot prove genuine manufacturing.
- Potential Influx from Non-EU Countries: The lobby expressed concern that the FTA could allow medical devices made in China and Taiwan to enter India through regulatory loopholes.
India-EU Free Trade Agreement (FTA):
Key Features of the India-EU FTA
- Trade in Goods and Services
- Investment Protections
- Sustainability and Labour Rights
- Geographical Indications (GI)
- Government Procurement
- Dispute Resolution Mechanisms
- Data Protection and Digital Trade
Current Status of Negotiations
- Restart of Negotiations
- Major Sticking Points
- Tariff reductions, particularly in sectors like automobiles, alcohol, and agricultural products.
- Data protection and privacy issues.
- Access to Indian markets for European goods and vice versa.
Importance of the FTA
- Boosting Bilateral Trade
- Promoting Investment
- Strategic Partnership
Challenges
- Tariff Sensitivities
- Regulatory Differences
- Sustainability and Labour Concerns
Way Ahead
- Flexible Negotiations
- Focus on Mutual Benefits
- Enhanced Cooperation