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Medical Device Industry
In India : A Potential Global Manufacturing Hub
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Dr. Atul
Sardana
Director
Alfa Corpuscles Pvt. Ltd. |
The Indian Healthcare industry is on a high growth
trajectory having evolved significantly in the past few
decades.
However, healthcare provision remains inequitable and
challenges in access to quality and affordable healthcare
persist in large parts of our country.
The medical devices sector has also grown considerably
during this period and plays a critical role at each stage
of the healthcare continuum.
Although it has been instrumental in improving access and
affordability of healthcare services, a number of
ecosystem constraints had led to a high dependence on
imports for addressing domestic demand.
With recent policy changes and the skew in demand and
supply dynamics there is a significant opportunity and
rationale for manufacturing medical devices in India.
The Governments ‘Make in India’ initiative presents a
platform for the sector to revisit the operating model,
identify key imperatives for growth and explore
possibilities for creating a change in the medical devices
sector.
While the government and value chain participants have
undertaken several steps to address the issues of
healthcare access, quality and affordability, these have
been executed in silos.
Globally, medical device companies have focused largely on
extending life expectancy and improving quality of care,
there is a need to increase affordability for a widespread
impact which has been the focus of the Indian Startups and
Medical Device Industry.
The focus therefore for companies in India is to produce
medical devices that are both cost competitive and
effective to increase penetration and use. It is in this
context that the Make in India initiative becomes
significant for the medical devices industry.
The global medical devices and technology market was
expected to grow to USD 520 billion by 2020.
The Indian market is among the top twenty in the world by
market size. However, the per capita spend on medical
devices in India is the lowest among BRIC countries and it
is significantly behind developed economies like the US.
This current under – penetration of medical devices in
India represents a sizeable growth opportunity.
The opportunity is significant and recent studies indicate
that medical devices are expected to be a USD 25-30
billion industry in India by 2025. The Indian market is
currently growing at a CAGR of around 14-15% which is
significantly higher than global industry growth of 4-6%.
Even today the Indian medical devices industry is small,
with a disproportionate reliance on imports with most
local manufacturers producing products in the lower end of
the technology value chain.
We realise that limited availability of technology and
funds not enabling indigenous manufacturing.
Imports constitute around 75% of the medical devices
industry sales in India. A range of factors contribute to
this high percentage share of imports
1. An inverted duty structure historically favouring
import of finished goods than raw materials /components
for medical devices manufacturing
2. Even with MDR, the absence of a concrete dedicated
regulatory framework specific to medical devices
constraining investments in the market and, lack of a
component
manufacturing ecosystem and skills base to support
domestic manufacturing of medical devices.
3. In addition, global capacities of multinational firms
are also boosting imports
The Indian medical devices industry
comprises four segments – consumables and implants,
diagnostic imaging, instruments & appliances and patient
aids and, others.
In order to bridge the gap existing in
medium – high end technology products, an increasing
number of multinational companies are establishing and
growing their presence in India. Nearly all of the top 40
global medical devices companies today have a presence in
the country. The share of multinational firms is around
40% – 50% in consumables and instruments and appliances
and, as 80% – 90% in all other sub-segments. Most
multinational companies have their production base outside
India and import their products for the Indian market..
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