India Import Regulations for Pre-Owned (Used and Refurbished) Medical Devices - Customs Forum

**admin** · 07-23-2011, 17:35 PM

General Market Condition: Restricted
End-users are becoming increasingly aware of the state-of-the-art Cancer Diagnostic and Treatment Equipment (CD&TE) equipment available in the world market. Most of India's leading cancer specialists attend medical conferences in the United States and Europe to keep abreast of the latest technologies. Price, product features and payment terms are key factors which influence purchase decisions of hospital administrators. Charitable organizations and rural hospitals unable to afford the latest, new equipment often purchase used or reconditioned equipment imported from abroad.
Used medical equipment also has market potential in the country. The present GOI's current Export-Import policy allows imports of used equipment including used CD&TE equipment. Used equipment including CD&TE equipment that is less than 10 years old can be imported into the country. The importer should not sell, transfer or otherwise dispose of this equipment within a period of two years from the date of import. The Director General of Foreign Trade, New Delhi, will grant a waiver to this requirement. Price-sensitive Indian end-users prefer to buy refurbished medical equipment including cancer treatment equipment for some low-end applications. However, these buyers look forward to continued support for spare parts and service commitments.
In July 2000, India's Directorate General of Foreign Trade (DGFT), Ministry of Commerce, issued a policy circular detailing guidelines for importing second-hand capital goods, including medical equipment. The policy incorporates changes to paragraph 5.3 of the Export Import Policy of 1997-2002 and paragraphs 5.29 and 5.30 of the handbook of procedures. As per the provisions contained therein, import of second-hand capital goods is restricted and subject to import licensing procedures.
Applications for such licenses are considered by the inter-ministerial Restricted Items Licensing Committee under the DGFT, New Delhi. The Committee will consider such applications according to the following guidelines:

Capital goods not older than 5 years: The committee will normally allow imports of such capital goods automatically.
Capital goods older than five years but less than ten years old: The committee will take into consideration the comparative advantages/benefits of such imports vis-à-vis new capital goods.
Capital goods older than 10 years: Imports of such capital goods normally will not be allowed except for heavy equipment in the infrastructure and core sectors.

The imported capital goods will have to conform to acceptable environmental and industrial safety norms. Apart from the criteria mentioned above, the committee might establish any other criteria, as it may deem necessary.
Under immense pressure from the domestic industry the Indian Government has eased the imports of second-hand machinery. The Government of India will now allow second hand capital goods imported into the country under the special import license route. An importer has to purchase the special import license from the open market at a premium and can import the second hand machinery, which is less than five-years-old. For machinery more than five-years-old the current procedure for imports will apply. It will not be possible for importing capital goods more than ten years old. A notification to this effect is being prepared by the Indian government.
Ministry officials said applications for import of second-hand machinery more than five years old will be placed before special licensing committees in the same manner as application for import of other restricted items.
When the new export import policy was announced in March 1999, several industry associations had complained that import of used equipment must be made easier so that the Indian industry can acquire the latest equipment and compete globally. This new announcement is in keeping with the demand from the user industry and the chamber of commerce representations.
Capital goods account for 25 percent of total imports and 75-80 percent of the capital goods imported into India was used machinery and equipment. Such a large percentage of imports will now be able to bring in latest equipment. This will also facilitate the import of used equipment by small-scale sector, which cannot afford new capital equipment.
Best Prospects
Refurbished medical laboratory instruments also find a ready market in India. These instruments are used as back-up machines in top-of-the-line hospitals. Less sophisticated hospitals and district hospitals view refurbished medical laboratory instruments as optimal for their laboratories because the investment cost is substantially lower than for new instruments. Some international companies operating in India also sell used medical laboratory instrument to their Indian customers. Also, Indian hospitals and agents demand continuous service support for these instruments and require spares when needed. US Companies in the used/refurbished medical instruments business may consider setting up liaison offices in India to promote their products.
There are several restrictions on the import of used equipment in India, prescribed by India's import-export policy, in force from 1997 to 2002. Second-hand capital goods with a minimum residual life of 5 years can be imported by actual users of such equipment without a license. The importer is required to furnish a self-declaration to the customs department specifying the residual life of the second-hand capital goods in a prescribed format.
The importer is also required to furnish a certificate from an internationally reputed inspection and certification agency that the purchase price of the equipment is reasonable. This certificate is required at the time of clearing the goods through customs, where the CIF value of the goods exceeds Indian rupees 10 million (US$ 238,000). Where the second-hand equipment has a CIF value of up to RS. 1 million (US$ 23,800), customs authorities will not insist upon such a certificate.
The second hand equipment shall not be transferred, sold or otherwise disposed of within a period of 5 years from the date of import, except with prior permission of the director general of Foreign Trade. While selling, US firms should remember that valuation of used or second-hand equipment is a very technical area with frequent disputes between customs and the importer.
Spares, including accessories and tools for the maintenance and operation of such equipment, can be imported to the extent of 15 percent of the value of the equipment.
India is a high-cost economy for capital equipment, and Indian manufacturers and investors constantly seek to reduce their capital costs. For this reason, demand for used and reconditioned equipment is high across a range of industry sectors. The best opportunities for US firms to pursue are in the industry sectors of construction, mining, medical, machine tools, plastics, steel, oil refining, computers, printing, packaging and dairy equipment.
While rates of customs duty vary from product to product, they are, generally speaking, lower for used equipment as compared with new equipment.

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