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India levies 11.6% tariff on medical product imports against average of 4.8%: WTO study

Joe C Mathew     April 4, 2020

  • India's tariffs on medical products higher than WTO average
  • Global trade of medical products totalled about $2 trillion
  • Global trade of key COVID-19 medical products is $597 billion
  • Germany, US, Switzerland supply 35% of medical products
  • China, Germany, US export 40% of personal protective products

India levies higher tariffs for medical product imports than the average applied tariff rates of the member countries of the World Trade Organisation (WTO), a report on trade in medical products critical for the global response to the COVID-19 pandemic released by WTO on April 3 says.

While the average tariff rate of all WTO member countries for medical products is 4.8 per cent,  it is 11.6 per cent for India. More specifically, India levies 10 per cent tariff on medicines as against a WTO average of 2.1 per cent, 15 per cent on medical supplies as against 6.2 per cent (WTO average) and 9 per cent on medical equipment as against WTO average of 3.5 per cent. In the case of personal protective products, Indian tariff of 12 per cent is closer to the WTO average of 11.5 percent.

The report pointed out that the trade of products described as critical and in severe shortage in COVID-19 crisis totalled about $597 billion, or 1.7 per cent of total world trade in 2019. The products include disinfectants and sterilisation products, face masks, gloves, hand soap and sanitiser, patient monitors, protective spectacles and visors, sterilisers, syringes, thermometers, ultrasonic scanning apparatus, ventilators, oxygen masks, X-ray equipment, etc.

Imports and exports of medical products totalled about $2 trillion, including intra-EU trade, which represented approximately 5 per cent of total world merchandise trade in 2019, the report said.

According to WTO analysis, during the last three years, the United States was the largest importer of medical products, accounting for 19 per cent of total world imports in 2019. Germany had a share of 9 percent, followed by China and Belgium (6 per cent). The other countries who make up the top 10 importers include the Netherlands, Japan, UK, France, Italy, and Switzerland.

The US and Germany together account for more than 22 per cent of total world imports ($135 billion) of personal protective products (hand soap and sanitiser, face masks, and protective spectacles) in 2019. Almost 17 per cent or $23 billion worth of these products were exported by China.

China also supplied 25 per cent world exports of face masks in 2019. In the case of breathing apparatus, including respirators and ventilators, there are limited competition. Singapore has 18 per cent market share, followed by the US with 16 per cent,  and Netherlands and China (10 per cent each).

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The WTO report claims to provide a comprehensive overview of trade and tariffs imposed on medical goods in general, including many of which appear to be in severe shortage as a result of the current crisis, and how these goods are traded globally.

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