Why the India-UK FTA has spooked medical device manufacturers. Hint: China

Apart from creating larger opportunities for Britain’s lifesciences sector, the India-UK FTA will mean reduced tariffs for medical devices going through the UK’s complex supply chains, which Chinese manufacturers can exploit, said industry experts. 

While the UK is not a major medtech manufacturing hub, it could serve as a conduit for third-country goods, particularly Chinese products, seeking backdoor access into India under the zero-duty terms, said a member of the Export Promotion Council of Medical Devices (EPCMD), a body set up by the Indian commerce ministry.

“There is a genuine concern that Chinese-origin products could be routed through the UK to exploit the zero-tariff provisions under an India-UK FTA,” this person said, requesting anonymity. “To prevent this, it is critical to enforce strict rules of origin, including a minimum of 55% UK content, excluding labour, packing, and shipping costs.”

The Indian government should consider including a 35% value-addition threshold and mandatory documentation to verify the medical devices imported into India and the manufacturing value-chain, this person added.

Another EPCMD member said the India-UK FTA must include “stringent origin verification protocols and clearly define the legal manufacturer and substantial transformation requirements”.

“India should maintain a mechanism for periodic review of product inflows, activate safeguard clauses where dumping or import surges are observed, and exclude sensitive or vulnerable product categories from blanket zero-tariff concessions,” this person added, also asking to not be identified. “These measures will ensure that genuine UK-origin products benefit from the agreement while protecting India’s growing and strategic domestic medical devices ecosystem.”

India’s medical devices sector is valued at $11 billion and expected to grow to $50 billion by 2030, according to the department of pharmaceuticals.

India’s medical device exports increased to ₹1,015.02 crore in 2023-24 from ₹897.41 crore in the year before, while imports surged to ₹2,295.37 crore from 1,682.14 crore.

Also read | India-UK FTA: Can exporters seize the opportunity amid tough competition?

‘Safeguard Indian medtech’

Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry, said the sector had raised its concerns with the department of pharmaceuticals and the department of commerce. 

“We needed fast-track regulatory approval based on ICMED-ISO certification to overcome non-tariff measures put in by the UK and to safeguard Indian manufacturers from rerouted products from China, etc., via the UK as purportedly made-in-UK or UK-country-of-origin products,” said Nath.

The Indian Certification for Medical Devices (ICMED) is a voluntary quality certification scheme for domestic medical device manufacturers, combining international quality requirements with Indian regulatory standards.

Under the India-UK FTA, several categories of “industrial goods” will attract zero import or export duties, including medical devices such as surgical instruments, diagnostic equipment, and electro-medical machinery like ECG machines and X-ray systems. 

This means that both imports from the UK to India and exports from India to the UK in these segments will enjoy duty-free access.

The Export Promotion Council of Medical Devices has submitted a proposal to the government with suggestions to safeguard the interests of Indian medtech manufacturers. These include implementing robust rules of origin, providing reciprocal benefits to Indian manufacturers, and ensuring that import-export policies support true value-creation and not just assembly or trading.

Also read | India, EU discuss textile duty relief in exchange for whisky concessions under FTA

Wider FTA opportunities

Despite the worries over Chinese products sneaking into India, the medical devices council acknowledged the free trade agreement would widen opportunities for Indian exporters.

“Indian medtech companies can now access the UK market at more competitive landed costs, improving chances of success in tenders and bulk procurement by institutions like the NHS (the UK’s National Health Service),” said the first council member quoted above.

“Second, the UK’s increasing reluctance to rely on Chinese medical imports positions Indian manufacturers as a favourable alternative, especially with zero-duty pricing. Third, easier access to high-value UK contracts may encourage Indian firms to upgrade quality standards and invest in regulatory compliance, spurring sector-wide growth,” this person said.

“However, it also opens the door to potentially harmful import practices that could disadvantage genuine Indian manufacturers. A balanced strategy with strict origin rules, domestic incentives, and regulatory support is crucial to ensuring that the FTA strengthens rather than weakens India’s medtech sector,” the member added.