Corporate Law Newsletter Volume II, Issue 04

February 13, 2017
ISSUE No. 04
February 13, 2017

India: In an effort to provide conducive environment to domestic manufacturers, Government notifies New Rules for Medical Devices



The Government of India, under the aegis of Ministry of Health and Family Welfare has notified the Medical Devices Rules, 2017, which is scheduled to come into force on January 1, 2018. These rules aims to provide high- quality life-saving medical technology at affordable prices and also formulates new norms for the medical devices sector to attract investments. The new rules have been framed in conformity with Global Harmonization Task Force and confirm to best international practices. A few cardinal features of the Rules are as follows –

Classification based on associated risks

Under these Rules, medical devices have been classified as per GHTF practices into Class A (low risk), Class B (low moderate risk), Class C (moderate high risk) and Class D (high risk). The manufacturers of medical devices will be required to meet risk proportionate regulatory requirements that have been specified in the Rules. The intent behind the regulation is – ‘higher the risk, higher the level of regulation’. The medical devices could range from simple devices such as thermometers and disposable gloves to X-Ray, CT, MRI machines and implantable devices such as stents and artificial joints[1].

Self-Compliance by manufacturers

These Rules have involved a concept of self-compliance by manufacturers and, accordingly, the manufacturing licenses for Class A medical devices will be granted without prior audit of manufacturing site. In this case, the manufacturers will be required to do self-certification of compliance with the requirements and based on such certification, the license will be issued. However, post approval audit of manufacturing site will be carried out by the Notified Bodies to check conformance with Quality Management System[2].

Standards for medical devices

The medical devices shall confirm to the standards laid down under Bureau of Indian Standards. However, if no standards are specified then they are required to confirm to the standard laid down by the International Organization for Standardization (ISO) or the International Electro Technical Commission. Also these rules have been framed in conformity with Global Harmonization Task Force (GHTF) framework.

Licensing for manufacture and import

These rules provide for separate licenses to be obtained for the manufacture and import of medical devices and also impose conditions to be fulfilled for obtaining these licenses. For the first time there will be no requirement of periodic renewal of licenses. Accordingly, manufacturing and import licenses will remain valid till these are suspended or cancelled or surrendered. In order to reduce paper work and promote speedy disposal of application, the entire process starting from submission of application to grant of permission/license will be done online.

Quality Management

For all manufacturing sites, Quality Management System will need to be aligned with ISO 13485. The Notified Bodies (accredited by the National Accreditation Board for Certification Bodies) would undertake verification and assessment of the quality management system of Class A and Class B category devices. Manufacture of Class C and Class D medical devices will be regulated by the Central Licensing Authority[3].

Clinical Investigations

The new rules have relaxed the clinical trial norms. Clinical Investigation (clinical trials) of investigational medical devices (i.e. new devices) have also been made at par with international practices and, like clinical trials, these will be regulated by Central Drugs Standard Control Organization. The objective to conduct clinical investigation is to ensure patient safety and welfare and discovery of new medical devices[4]. These rules provide for the compensation payable to the subjects of a clinical investigation.


The initiative taken by the Legislature in bringing out the Medical Devices Rules, 2017 will boost governments ‘Make in India’ campaign by providing conductive environment for domestic manufacturers and promoting economic growth, long term investments and entrepreneurship. At present only 15 categories of Medical Devises are present and they are not fully equipped to meet the requirements of medical devices sector. It is expected that these rules will facilitate ease of doing business while ensuring availability of better medical devices for patient care and safety.






Exemption on Machinery Imported for Generation of Power


  • Powers of Central Government to Grant Exemption from Custom Duty

    Section 25 of the Customs Act, 1962 empowers the Central Government to grant exemptions from Custom Duty, if the Central Government is satisfied that it is necessary in the public interest to do so. The Central Government in furtherance to the above mentioned powers, by notification in the Official Gazette, is empowered to exempt goods of any specified description from the whole or any part of duty leviable thereon.

  • Notification No. 05/2017- Customs

    The Ministry of Finance on February 2, 2017 vide notification no. 05/2017 – Customs[1], exempted the payment of custom duty on all items of machinery required for;

    • The initial setting up of fuel cell based system for generation of power or for demonstration purposes; or
    • The balance of systems operating on bio-gas or bio-methane or by-product hydrogen.

    It is pertinent to note that for the purpose of this exemption, machinery will include all instruments, apparatus and appliances, transmission equipment and auxiliary equipment (including those required for testing and quality control) and components.

    Through the above notification, the amount of Custom Duty payable has been reduced to 5% on the value of machinery imported to India as against that previously mentioned in the First Schedule to the Customs Tariff Act, 1975. However, this reduction in the Custom Duty is subject to the below mentioned conditions;

    • The importer produces before the Deputy/ Assistant Commissioner of Customs, as the case may be, a certificate indicating the quantity, description and specification of such items. Such a certificate, recommending grant of the exemption, must be issued by an officer not below the rank of a Deputy Secretary to the Government of India in the Ministry of New and Renewable Energy.
    • The importer furnishes an undertaking to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, that such imported items shall be used for the purposes as specified above and, if the importer fails to comply with this condition, he shall be liable to pay, in respect of such items as is not proved to have been so used, an amount equal to the difference between the duty leviable before exemption on such items and that already paid at the time of importation.
  • Observations
  • The Indian Government had presented a report before the UN[2] where they have claimed that India will reduce their carbon emissions related to its Gross Domestic Product (GDP) by 30-35% by the year 2030. It has also been claimed that 40% of all electricity generated in India, by the same year, shall be generated from non-fossil fuels such as solar and wind energy.

    Currently, we understand that this notification of the Central Government has not been notified in the Official Gazette. However, this step of the Government should prove to be beneficial for all the companies who are involved in the production of renewable energy and shows the commitment of the Indian Government to generate a major portion of the country’s electricity needs from non-fossil fuels.

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