Iran war impact: Medical device input costs up by 50%, says industry body

The ongoing Strait of Hormuz blockade and escalating Middle East tensions have driven up medical device input costs by nearly 50% for critical plastics and over 20% for packaging says Association of Indian Medical Device Industry (AiMeD). The cost escalation, along with increase in the cost of fuel and reduced availability of PNG gas used for power generation and process heating is eroding razor-thin margins on essentials like syringes, nitrile gloves, catheters, and plastic disposable medical devices in a highly competitive, volume-driven market, Rajiv Nath, forum coordinator, AiMeD said.

“India's medical devices industry continues to depend on imports for specialised, high-grade polymers that meet stringent quality and regulatory standards. While 1-3 week shipment delays were manageable via buffers, prolonged disruptions risk production halts, hospital shortages, and costs due to inflated prices from market abuse by dominant large raw materials players”, he said.

The industry body pointed out that as of now there are no shortages of syringes or other medical disposables. "Supplies other than LPG (affecting a few examination glove manufacturers using it as a heat source) have not been disrupted. However, we are seeing substantial price increases, longer lead times, and highly elevated freight costs, which are pressuring cost structures and planning cycles. Many manufacturers have adjusted product pricing by 10-20% to sustain operations. There is no acute shortage in key polymer grades like Polypropylene, HDPE or LDPE, but evolving global supply chain dynamics require close monitoring to prevent impacts on production timelines and industry stability," Nath said.

According to Nath, the government can provide immediate relief by ensuring CONCOR reduces its inland freight haulage charges to cover costs without opportunistic hikes, honouring its assurance to refund excess GST paid within seven days, thereby alleviating acute working capital distress for medical device manufacturers. 

He also said the government should not reduce import duties on medical devices based on rumours of shortages . Instead, if wishing to providing support, the government should offer a temporary three-month rebate of 2.5% on raw materials imports and 5% on components imports for medical devices “, he added. “Urgent government action is needed to safeguard over five lakh jobs, ensure affordable healthcare access under Atmanirbhar Bharat, and protect exports to the US and EU."