The duty cuts relating to the pharmaceuticals and healthcare industry announced by the government will bring tariffs in the Indian pharmaceutical industry closer to global tariff rates.
This is in line with India's commitment to the TRIPS agreement and the product patent regime that comes into effect from January 2005.
Analysts said it would help India become competitive globally. With prices in India already being among the lowest in the world, domestic pharmaceutical companies do not expect the import duty cuts to have any major adverse impact. The move is viewed as a step to reduce the cost of healthcare for the common man.
Dilip Shanghvi, Chairman and Managing Director of Sun Pharmaceuticals, told Business Standard: "There are several lists of life saving drugs used by different bodies. Hence, the overriding need is to define one common list and validate it to ensure the inclusion of products that are truly life saving. Since the government is sacrificing revenue, there is a need to ensure that the excise duty cut benefits the consumer in the form of lower medication prices."
On the reduction in excise duty and customs duty, Kamal K Sharma, managing director of Lupin, said: "The lowering of customs duty won't have much of an adverse impact as prices in India are already among the lowest in the world. This is because, at a global level, the Indian drug industry is already recognised to be the most competitive, if you take the parameters of quality, scale, and price considered together."
Habil Khorakiwala, chairman of Wockhardt and Wockhardt Hospitals, said: "The reduced duty on hospital equipment will encourage the growth of this capital-intensive sector. The government has moved positively and the liberalisation process continues. These measures will take the economy forward. The reduction in duties will benefit the consumer."
The last time we had such a reduction, it was reflected in pharmaceutical prices. Overall, it is a welcome move."
"It is a great development for patients as it will ease their burden. The duty cut on equipment will enable corporates conduct their business more effectively. We also expect some reduction in the custom duty on research equipment in the areas of pharmaceuticals, biotechnology and lifesciences," said Swati Piramal, director, strategic alliances and communications, at Nicholas Piramal India.