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Challenges and Opportunities For Medical Disposables & Implants Industry in India


To gradually transition from an import dependent to an export oriented sector, the Government with all stakeholders, needs to come together to prepare and develop our medical technology ecosystem.

Himanshu Baid
Managing Director
Poly Medicure Ltd.
& Chairman-CII
Medical Technology Division

With 17% of world population and a GDP growth rate of 7.2%, India is amongst the fastest growing economies of the world. The Indian healthcare sector grew at a rate of 18% from 2010 till 2016 and is expected to advance at a rate of 15% during 2016-20 to reach USD 280 billion by 2020.


With 1/6th of world’s population and a growing demand for healthcare services, India is also likely to witness a spur in the demand for allied technologies, medical devices, medical equipment and medical consumables which will aid in delivery of affordable healthcare. Medical Technology can be instrumental in shaping healthcare for all in India as it provides the opportunity to leapfrog over India’s longstanding healthcare challenges – accessibility, affordability and quality.

Current global medical technology market is around US$ 350 Billion. Which is expected to grow to US$ 500 billion+ by 2025. The Indian market is among the top twenty in the world by market size, but its only 2% in value.

The Indian medical device sector is expected to grow at a CAGR of 15 % for next 4-5 years. Medical Technology can be instrumental in shaping healthcare for all in India.


• It plays a key role throughout the patient’s care continuum – preventive, diagnostic, as well as palliative treatments

• It has positively impacted the healthcare delivery and patient outcomes


Medical Technology in India, like in several other countries in the world, is largely import dependent. Over 70 per cent of high end medical devices and critical care equipment are imported whereas large volume and comparatively low to medium - end consumables, disposables and equipment’s are mostly locally manufactured.


While the inverted duty regime is being touted as one of the primary reason for this imbalance over the years, the country’s Make in India initiative is being implemented through a ‘policy push’ to encourage local manufacturing and shift from an import dependent to an export oriented market. The key issue remains that an import dependent economy cannot suddenly shift to indigenous manufacturing simply through driving policy decisions in a sector such as healthcare. To gradually transition from an import dependent to an export-oriented sector, the Government with all stakeholders, needs to come together to prepare and develop our medical technology ecosystem. To create such a healthy ecosystem in the near term, we will have to grant equal importance to imports and domestic manufacturing with a view to improve clinical outcomes and have continued access to global technology enabling a smooth transition.

Industry proposes three thrust areas :

1. Healthcare expansion by ramping up government spending on Healthcare:

The size of the Indian medical technology market is a key constraint for investment in India, particularly in local manufacturing. On most healthcare metrics India has one of the lowest ratios, be it doctors, per capita health care spend as a percentage of GDP, or even hospital beds. The US$50 billion opportunity for Medtech in India can only be realized if domestic demand is unlocked. Further - more, a significant part of the demand generation opportunity will be with the recently announced Ayushman Bharat programme that aims to provide healthcare benefits for the 10 crore poor families or around 40 per cent of the population. This makes the program the world’s largest government-funded health care program. Every family will receive a benefit coverage up to Rs 5 lakhs per year under the National Health Protection Scheme, which is likely to cost the government around Rs 1000-1200 as the premium of each family. The Government has urged the Indian Medical Devices Industry to brace for meeting the demands of the ambitious health insurance scheme. The Government expects the Medical Devices industry to double in next five years. With this clear approaching domestic opportunity, all stakeholders are optimistic about the future of ‘Make in India’ and are expecting manufacturing investments to follow in the very near future.

We need to wait and watch how the government is going to fulfill the promise of bringing over 10 crore Below the Poverty Line (BPL) families under a health insurance scheme and enhanced health insurance cover up to 5 lakh. Funding such a large project in short term will be challenging.

2. Single window regulation for medical device related manufacturing:

A Single window clearance for not only setting up the manufacturing facility but also for day-to-day operations would go a long way in addressing the primary concerns of investors in local manufacturing in India. Alignment of policy implementation across different state and national bodies will help reduce the challenges of running efficient operations in India. Designating areas as Medical technology hubs is not enough.

The supporting infrastructure and desired talent needs to be put in place. When designating areas as hubs, the government needs to make sure the inbound and outbound clearances (e.g., customs) are streamlined, logistical challenges are addressed with sufficient Third Party Logistics (3PL) capacity and finally enough technical training is in the vicinity to provide trained manpower to the hubs.

3. Economic incentives and rationalized duty structure:

It is important to create incentives to enhance the attractiveness of local manufacturing. As we know, the cost of capital in India today is high and traditional incentives such as capital subsidy and soft loans will help companies to consider investing in India. Finally, there is a need to establish appropriate duty structures for imported raw materials (to address the inverted duty structure challenges), which will encourage indigenous manufacturing.

For the medical devices industry, the recent budget was a disappointment. In 2016, the government had reduced the custom duty for some of raw materials to 2.5 per cent, but it was not done for in Vitro Diagnostic (IVD)s, which is a part of the sector. If the government really wants to “Make in India” they should have reduced the custom duty of all the raw materials used in the medical devices, including IVDs. The government announced a lot of measures to boost local manufacturing, but they are not implemented as yet. For example, the number of medical parks, which were announced in various states, is still a non-starter as none of them are operational. The projects are delayed in various states.

The medical devices industry is just like the automobile industry, as a lot of Research and Development (R&D) takes place. By allowing weighted tax deduction of upto 200 percent on R&D investments for the sector will promote innovation. Currently it is reduced to 150 per cent and further it is said to be reduced to 100 per cent.

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