How US tariff cut opens the door for Indian medical devices to take on China

The sharp reduction in US import tariffs on Indian goods, from as high as 50 per cent to 18 per cent, has been hailed as a major breakthrough for India’s medical devices sector, potentially unlocking billions of dollars in export opportunities and strengthening India’s position in global supply chains.

India’s medical devices industry, currently valued at around $11 billion, remains heavily import-dependent, with nearly 70–75 per cent of domestic demand met through imports, primarily from the US, China, and Europe. However, exports have been steadily rising, touching close to $3.5 billion annually, driven by products such as consumables, diagnostics, implants, and low-to-mid-tech devices. 

Easier access to the US market could significantly accelerate this growth trajectory, say experts. 

The tariff cut also aligns with India’s broader push to strengthen domestic manufacturing through policy interventions such as the Production Linked Incentive (PLI) scheme for medical devices and the establishment of dedicated medical device parks. 

Industry experts believe improved price competitiveness in the US could help Indian manufacturers move up the value chain, from low-margin consumables to more sophisticated equipment and devices.

From a strategic standpoint, the move reinforces India’s positioning as a reliable alternative manufacturing base amid ongoing geopolitical tensions and supply chain disruptions. 

US demand for cost-effective medical devices is also rising, driven by pressure to rein in healthcare costs and expand access. Indian manufacturers, known for producing quality devices at significantly lower prices, could find increased acceptance among US buyers, hospitals, and group purchasing organisations, especially in price-sensitive segments.

Industry body Association of Indian Medical Device Industry (AiMeD) says the move significantly lowers export costs for Indian manufacturers and comes at a time when global companies are actively diversifying away from China under the ‘China+1’ strategy.

Calling it a "game-changer” for the sector, Rajiv Nath, Forum Coordinator, AiMeD, said the tariff slash would enhance the global competitiveness of Indian medtech companies, spur fresh investments, and generate employment. “This is a vital boost for Indian manufacturers. It strengthens the ‘Make in India’ push in medical technology and opens up large-scale access to the US market,” Nath said.

Crucially, the revised tariff structure places India at a clear advantage vis-à-vis China. Nath explained that while Indian goods will now attract an 18 per cent duty, Chinese medical devices continue to face higher Section 301 tariffs, typically around 25 per cent, with additional hikes pushing duties up to 50–60 per cent on certain products such as respirators.

“Earlier, India faced duties of up to 50 per cent, while China was at roughly 30 per cent. The new deal flips that equation,” Nath noted. “India’s tariff rate is now below China’s base level, giving Indian medical devices a decisive competitive edge at a time when global buyers are actively rebalancing supply chains.”

That said, challenges remain. Compliance with stringent US Food and Drug Administration (FDA) regulations continues to be a hurdle for many Indian manufacturers, particularly smaller firms.

Industry bodies have repeatedly flagged the need for regulatory capacity-building, faster approvals, and mutual recognition mechanisms to ensure that tariff benefits translate into real market access.

Experts caution that sustaining the momentum will require policy stability on both sides. Any future tariff reversals could blunt the gains. For now, however, the reduction is being viewed as a rare convergence of trade policy and industrial strategy, one that could reshape India’s role in the global medical devices ecosystem if backed by long-term regulatory and diplomatic alignment.

The tariff relief is expected to benefit a wide range of Indian medical device manufacturers, particularly small and medium enterprises, by making their products more price-competitive in the world’s largest healthcare market. Industry leaders believe this could accelerate India’s transition from being a largely import-dependent market to a global manufacturing hub for medical technology.

However, AiMeD has stressed that tariffs alone will not be enough to realise the full potential of the opportunity. Nath urged sustained regulatory cooperation between India and the US, particularly on standards, approvals, and compliance frameworks. “Regulatory harmonisation will be critical if Indian manufacturers are to fully capitalise on this opening and scale up exports to the US,” he said.

With geopolitical shifts reshaping global trade and healthcare supply chains, the tariff cut is being seen as a timely push that could help Indian medical devices gain a firmer foothold internationally.