Rising Impact on Medical device costs

The medical device industry in India currently faces a significant financial challenge. Recent conflicts in West Asia have disrupted critical shipping routes, leading to a sharp surge in medical device costs. Specifically, the blockade of the Strait of Hormuz has created an environment where raw material prices are skyrocketing. Consequently, manufacturers are struggling to maintain the affordability of essential healthcare products for the Indian market.

The Association of Indian Medical Device Industry (AiMeD) recently addressed these concerns in a formal letter to Commerce and Industry Minister Piyush Goyal. In this communication, AiMeD highlighted that the prolonged shipping disruptions have caused unprecedented increases in key raw materials. For instance, the price of critical plastics used in medical disposables has risen by 50 per cent. Additionally, packaging material costs have increased by more than 20 per cent since the outbreak of the conflict.

Proposed Duty Rebates to Mitigate Expenses

To address the rising medical device costs, the industry has requested immediate government intervention. Therefore, they are seeking a temporary three-month customs duty rebate to offset these expenses. The proposal includes a 2.5 per cent rebate on raw materials and a 5 per cent rebate on vital components. Although manufacturers initially relied on buffer stocks to manage early shipment delays, those reserves are now depleted. As a result, many production facilities now face the risk of slowdowns and opportunistic pricing from suppliers.

Furthermore, the expanding energy crisis is compounding these operational difficulties. Curtailed commercial gas supplies have led to a doubling of PNG gas prices, which are essential for process heating and power. Because of these factors, the cost of manufacturing has reached a critical point. Industry leaders emphasize that without policy support, the increased financial burden may eventually impact patient care and product availability across India.

Frequently Asked Questions

Q1: Why are medical device costs increasing in India?

Costs are rising primarily due to the blockade of the Strait of Hormuz. This disruption has significantly inflated the price of energy and raw materials like plastics and packaging.

Q2: What relief measures has the medical device industry requested?

The industry has requested a temporary three-month customs duty rebate. This includes 2.5 per cent on raw materials and 5 per cent on components to maintain product affordability.

Q3: How has the energy crisis affected medical manufacturing?

The energy crisis has led to a doubling of gas prices used for process heating. This increase results in production slowdowns and higher operational disruptions across various manufacturing facilities.

Disclaimer: This content is for informational and educational purposes only. It does not constitute medical advice or replace professional judgment. Refer to the latest local and national guidelines for clinical practice.

References

1. Med device industry seeks duty refund as West Asia conflict fuels Input cost - ETHealthworld


2. Global Shipping Trends and the Impact of Middle East Conflicts on Trade - World Trade Report 2026


3. Ministry of Commerce and Industry Updates on Import-Export Rebates - Government of India Press Briefings