India’s Import Duty On Covid Goods Like Test Kits Is Highest In The World

India has become the top country in terms of import duty imposed on Covid-related goods. 

India levies the highest import duty on pandemic-related medical goods such as test kits, swab and viral transport medium set, sterilisation products, disinfectants, protective gears, infrared thermometers and inputs for vaccine production.

As a result, Covid treatment and vaccination are now costlier.

In Comparison With Other Countries

According to research conducted by Indira Gandhi Institute of Development Research in Mumbai, it was found that an import duty iof 15.2% is imposed on medical goods.

This figure is twice as high as in China and 7 times higher than the US. 

Compared to poorer countries such as Afghanistan and Bangladesh, India’s duty is 60% higher.

The data was compiled from United Nations Conference on Trade and Development and Organisation for Economic Cooperation and Development which published a report on India’s economy and policy. 

India’s import duty has seen a rapid growth in the period between April 2020 and Feb 2021.

Current Duty Rates

• For infrared thermometers, import duty rate is 8%
• Protective garments- 13.3%
• Gas cylinders for oxygen- 9.8%
• Test kits- 6.9%
• Disinfectants and sterilisation products- 55.8%
• Oxygen- 7.5%
• Oxygen therapy equipment and pulse oximeters- 5.6%
• Wheelchairs and mobile clinic vehicles- 10%
• Inputs required for vaccine production and distribution- 9.3%

India’s rates on all these goods are higher than China and US.

Back in April when the pandemic’s second wave broke out, the govt had removed basic customs duty on imported oxygen, Covid vaccines and vaccine inputs. 

But the waiver was applicable only for a brief period of 3 months.

India’s Vaccine Production Hampered

In the research paper, author C Veeramani, a professor at the institution, said that imposing tariffs on vaccine inputs will increase the costs of domestic vaccine production. 

Subsequently, the prices of vaccines will also rise. The cost here can be controlled if the govt removes the tariff on vaccine inputs.

Vaccine production involves the use of 9,000 different materials which come from 300 suppliers spanning 30 countries. 

Veeramani said that if the govt maintains its exorbitant rates, Covid treatment cost will also go up. 

It will add additional burdens on those infected or their family since they now have to bear the higher cost of treatment, medicine and equipment.

Why India Should Lower Or Remove Tariffs

India stands to gain from lowering tariff rates. 

One benefit is that domestic vaccine production can be integrated with the international value chain.

The second benefit is for the consumers who will be able to bear the costs.

India’s involvement in the global supply chain of Covid products and vaccines will also be strengthened.

The need of the hour is to make treatment affordable for all by removing tariffs and “streamlining trade related processes at and within the border”, concluded the paper.

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