In a bid to reduce India’s 80-85 per cent dependence on medical device imports, the Association of Indian Medical Device Industry in its pre-budget recommendations wants the government to address the soaring import bill, which currently stands over Rs 63,200 crore.
According to the Global Trade Research Initiative (GTRI) report from August 2023, the Indian medical devices industry has the potential to expand from $12 billion today to $50 billion by 2030. This expansion could reduce import reliance to 35 per cent and boost exports from the current $3.4 billion to $18 billion by 2030. The ripple effect of this shift could generate over 1.5 million jobs in medical device manufacturing and related healthcare services.
Rajiv Nath, Forum Coordinator at AiMeD, emphasises the need for the government to withdraw Duty Exemption notifications on medical devices and provide nominal protection to neutralise competitiveness disabilities in manufacturing medical devices in India. Additionally, the industry seeks a phased approach to custom duty increases on critical components, ensuring the viability of manufacturing and avoiding erosion of competitiveness with zero-duty Free Trade Agreement (FTA) countries.
“Consumers do need to be protected but instead of a low duty strategy, we have been recommending for Customs to monitor MRP of imports and when found unreasonably higher than imports’ landed price, recommend to NPPA to consider capping MRP,” Nath further added.
Speaking on the same, Mudit Dandwate, CEO and Co-Founder of Dozee, underscores the significance of reducing import dependence in the medical device sector. He highlights the vast potential for growth in domestic production, given the increasing number of hospitals, rising healthcare penetration in tier II and tier III cities, and the escalating demand for quality healthcare.
“The Union Budget 2024-25 should broaden the scope of the PLI scheme while considering potential industries that could be included, with the goal of achieving $1 trillion exports by 2025. By laying the required foundation and streamlining the approval procedure, the government can guarantee a sturdy framework aimed at not just drawing in foreign investments but also inspiring local ‘Make in India’ players to thrive,” Dandwate further added.
Beyond the pre-budget recommendations, experts stress critical policy interventions for the Indian MedTech industry. These include enhancing quality regulations to meet global standards, providing incentives for achieving and surpassing international benchmarks, and promoting indigenous products through awareness campaigns and strategic initiatives.
Discussing the impact of a flat 12 per cent GST rate on the entire medical device spectrum, experts suggest that such a reduction could enhance accessibility and affordability of quality medical services for patients. They emphasise the need for broader policy measures, including expanding the scope of Production Linked Incentive (PLI) schemes, simplifying approval procedures, and targeting $1 trillion in exports by 2025.
With increased government support, industry leaders project significant growth for the Indian MedTech industry in the next 5-10 years. The sustained growth rate of 13-15 per cent year on year could lead to exponential expansion, possibly four to five times the current size.
Challenges faced by Indian MedTech companies, such as limited access to capital, a shortage of skilled workforce, and issues with technology transfer, require a multi-faceted approach. Suggestions include government-backed funding programs, venture capital support, industry partnerships, specialised training programs, and collaborative frameworks between industry players and research institutions.
Gurmeet Singh Chugh, Chairman of Translumina Medical Devices, emphasises the need to establish a robust ecosystem in India, eliminating the necessity for local MedTech companies to conduct high-end equipment testing, such as the chemical characterisation of stents, in European countries. Chugh highlights that this testing, which costs approximately 70 to 80 lakh rupees when conducted in a European lab, could attract more participants in the field if similar testing facilities were available within India. He underscores the critical importance of chemical characterisation testing for all metal implants and laments the absence of a single lab in India offering such services.
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