(MENAFN- Live Mint)

New Delhi: India is working on a plan to help domestic medical device makers cope with stiff US tariffs and regulations that make exports difficult and costly.

The Department of Pharmaceuticals' (DoP) plan could include subsidies for small and medium enterprises (SMEs) to reduce high compliance costs, mutual recognition agreements with the US Food and Drug Administration (US FDA) so that Indian products are accepted more easily, expansion of accredited testing labs, and setting up of a dedicated export facilitation desk to guide exporters through the procedures, according to documents reviewed by Mint and two people familiar with the matter.

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Indian exporters currently face significant trade barriers, including high FDA registration costs . They are required to hire US-based agents, and their Indian clinical data is often not accepted, with the US insisting on local studies. All these factors make exports slow and expensive.

DoP's Export Promotion Council for Medical Devices (EPCMD) and industry association recently submitted the proposals to the government that aim to reduce the average approval time for exporters by 30% and increase export value to the US by 25% within three years.

According to the first of the two persons cited earlier, a comprehensive analysis of market access barriers and export trends for India's medical device sector was presented at a high-level meeting attended by top DoP officials and industry stakeholders.

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“Proposed solutions including targeted subsidies for SMEs, mutual recognition agreements with the FDA, and an improved regulatory infrastructure, are being aimed to enhance the global competitiveness of the Indian medical device industry. These measures are designed to reduce compliance costs, streamline exports, and ultimately reverse the trade imbalance," the person added. "The government sought inputs from industry associations to review the situation following multiple reports of US imposing tariffs."

To be sure, these are recommendations from the industry, and a final decision on the medical devices sector has yet to be made by the government.

India's medical device industry is currently valued at about $12 billion, and is projected to swell to $50 billion by 2030.

“This initiative directly addresses the country's over-reliance on medical device imports. By promoting domestic manufacturing, the government plans to reduce vulnerability to supply chain disruptions, lower healthcare costs for its citizens, and align with its "Atmanirbhar Bharat" (self-reliant India) initiative," said the second person. Both the persons spoke to Mint on the condition of anonymity.

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Queries sent to the spokesperson of the DoP on Wednesday remained unanswered till press time.

While Indian medical device exports to the US increased between May and August 2025, the trade deficit continues to grow as imports from the US outpaced exports. During May-August, India's medical devices exports to the US rose 9.3% to $279.58 million, while imports increased 15.2% to $646.20 million, resulting in a $366.62 million trade deficit.

This imbalance is driven by a number of significant hurdles that Indian companies face when trying to enter the US market. The primary obstacle is the high cost of getting products approved by the US FDA. According to government documents reviewed by Mint, these costs can range from $30,000 for basic devices such as catheter, thermometer etc. to over $483,560 for each complex device such as dialysis, X-ray, MRI, and ultrasound machines. Beyond the direct costs, Indian exporters are also required to have a local US agent, which adds to their operational expenses and complexity.

The Indian medical device industry welcomed the move.

Himanshu Baid, managing director at Polymedicure Ltd, a medical device manufacturer, said that the roadmap being prepared for India's medical devices sector signals a shift towards building long-term competitiveness rather than short-term compliance.

“Strengthening the testing infrastructure and accreditation processes will enable the industry to focus on innovation, scale, and global quality benchmarks. Empowering SMEs through targeted support and harmonized standards will catalyze the next phase of growth, wherein Indian medtech companies will not only manufacture at scale, but also design and develop technologies suited for global needs."

“These reforms can transform India from being a cost-efficient manufacturing destination into a knowledge-driven medtech hub, powered by stronger clinical capabilities, research collaborations, and a more enabling regulatory framework," he added.

Last month's meeting also focussed on the vexed issue of high tariffs imposed on Indian goods, which can be as high as 50% on medical devices. This is significantly higher than the 30% tariff for Chinese products and 15% for those from the European Union, putting Indian companies at a significant disadvantage.

The immediate plan over the next 12 months includes targeted subsidies to SMEs to help them with high costs like ISO 13485 certification and FDA consultant fees. Additionally, a single online portal will be created to simplify export paperwork and customs clearance. There will also be an "Export Facilitation Desk" with representatives from the Department of Pharmaceuticals, the Department of Commerce, and industry associations to guide companies through the complex FDA process.

For the medium term (6-24 months), the plan revolves around pursuing mutual recognition agreements with regulators to speed up the review period and expand the number of accredited laboratories in India to reduce the need for expensive overseas testing.

The long-term vision includes making India's regulations match global standards, using diplomatic efforts to address discriminatory tariffs, and building a stronger research and development (R&D) ecosystem to produce higher-value, and more innovative products.

Rajiv Nath, Forum Coordinator, Association of Indian Manufacturers of Medical Devices (AiMeD), said that India's medical device exports crossed $4 billion in 2024-25 versus over $8 billion in imports, and added that India's medical device exports can grow only if trade is reciprocal.

“While we keep tariffs low, the US and EU's stringent regulatory barriers make market entry very costly and slow. India must align domestic medical device regulations with global ISO standards, pursue MRAs (mutual recognition agreements), and build testing infrastructure that is accredited to both the International Laboratory Accreditation Cooperation (ILAC) and the US FDA Accreditation Scheme for Conformity Assessment (ASCA) to enable global acceptance and demand fairer access to these markets before cutting tariffs to safeguard industry and exports," Nath said.

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