GTRI Calls For Fair Market Access In Medical Device Sector Amid India-EU FTA Talks

New Delhi, Mar 17 (KNN) Economic think tank Global Trade Research Initiative (GTRI) has called upon India to pursue reciprocity and improve market access for its medical devices sector during negotiations with the European Union (EU) on the proposed free trade agreement (FTA).

GTRI founder Ajay Srivastava highlighted a significant imbalance in the current negotiations, noting that while the EU demands zero tariffs on medical devices from India, it maintains substantial regulatory barriers that effectively limit Indian exports to EU markets.

The situation presents a complex challenge for India, which currently applies modest tariffs ranging from zero to 10 percent on most medical devices. 

According to GTRI, reducing these tariffs without addressing the EU's regulatory hurdles would likely result in minimal export growth while significantly increasing imports from the EU.

For a balanced trade relationship, GTRI recommends that India adopt a firm stance on reciprocity, reducing its tariffs on medical devices only if the EU agrees to lower its non-tariff barriers. 

Srivastava explained that despite the EU's zero customs duties policy, market entry costs remain prohibitively high due to rigorous regulatory requirements.

The regulatory environment has become particularly challenging since the EU replaced the Medical Device Directives (EU-MDD) with the more stringent Medical Device Rules (EU-MDR). 

This transition has extended the certification approval process from a relatively manageable four to eight months to a lengthy two to three years. 

Compounding these difficulties is a shortage of notified bodies and auditors in the EU, resulting in substantially higher certification costs.

These regulatory challenges have forced many Indian exporters to either limit their presence in the EU market or withdraw entirely as the financial burden becomes unsustainable. 

Trade figures from 2024 illustrate the imbalance, with India's global medical device exports valued at USD 2.3 billion compared to imports of USD 4.7 billion. 

Within this trade relationship, the EU market accounted for USD 580 million in exports and USD 1.15 billion in imports.

Srivastava also identified India's absence from the Medical Device Single Audit Program (MDSAP) as a significant obstacle. 

This program allows for a single audit to satisfy regulatory requirements across multiple markets, and India's non-participation restricts the acceptance of Indian devices in key regulated markets.

To enhance export opportunities to the EU and other major markets, GTRI recommends that India pursue strategic reforms, including negotiating Mutual Recognition Agreements (MRAs) with the EU, the United States, and other regulated markets based on internationally harmonised ISO standards.

(KNN Bureau)