The war in West Asia has escalated input costs and was straining working capital for manufacturers of essential medical disposables, said the Association of Indian Medical Device Industry (Aimed), in a letter to the Union Finance Ministry.
They called for fast-tracking of GST refunds, or a temporary customs duty rebate on the import of raw materials or components, to ease the pressure faced by companies.
Manufacturers are reporting unprecedented increases in key raw materials and energy inputs, the letter said, outlining a “nearly 50 percent rise in critical plastics used in syringes, IV sets, catheters, and examination gloves; over 20 percent increase in packaging materials and diesel-based self-generated power and doubling of Adani PNG gas prices, widely used for process heating and captive power.”
Stressing that there were no shortages in the market presently, the letter said, shipment delays of one-to- three weeks were manageable, but the prolonged nature of disruptions could result in production slowdowns and expose the industry “to opportunistic pricing by dominant raw material suppliers.”
“India remains dependent on imports for specialized, medical-grade polymers that meet stringent regulatory standards. Any sustained disruption directly threatens manufacturing continuity and the stability of hospital supplies,” Aimed said.
“There is currently no shortage of syringes or other medical disposables, and there is no cause for public concern. But manufacturers are experiencing “huge cost escalations; longer lead times; elevated freight and logistics costs,” the letter said. Companies have already increased ex-factory prices by about 10-20 percent, Aimed spokesperson Rajiv Nath told businessline.
Working capital distress
The association called for fast-tracking of GST Refunds to ease “acute working capital distress”. The industry continues to face severe working capital blocks due to the inverted duty structure, the letter explained, pointing to “18 per cent GST on inputs, versus 5 per cent GST on finished medical devices.”
This resulted in “large accumulations of unutilized input tax credit and increased bank borrowings,” they said, adding that Government may have assured that excess GST would be refunded in seven days, but “refunds from the GST rate reduction last year remain pending in most cases. This delay is now becoming unsustainable amid rising input costs,” the letter said.
The single step of immediately clearing pending GST refunds and adherence to the seven-day timeline will provide “critical liquidity relief to manufacturers,” it said.
The association urged the Centre to avoid reducing import duties on finished medical devices. “Any reduction in import duties at this stage would severely disadvantage domestic manufacturers already under stress and could lead to a surge in low-priced imports, undermining the progress made under Make in India and the Production Linked Manufacturing Ecosystem,” it said.
Aimed suggested a temporary and targeted, possibly three-month, customs duty rebate of “2.5 per cent on raw material imports, and 5 per cent on component imports for medical devices under Chapter 90..” the letter said.
Published on March 30, 2026
