India can be a medical devices hub
The Centre's decision to allow 100 per cent FDI to manufacture medical devices will benefit only multinationals who will push domestic players out of business, believes RAJIV NATH, coordinator of the Association of Indian Medical Device Industry. In an interview to KUNDAN PANDEY, he says the government should focus on enabling domestic players to meet the country's growing demand for medical devices Why are domestic manufacturers opposing the Centre's decision to allow 100 per cent FDI in the medical device industry? We are not opposing FDI in the industry. But there are caveats. We are against 100 per cent FDI in brownfield projects. The move will not only kill existing domestic manufacturers by making them an easy target for takeovers but will also defeat the very purpose of reducing import dependency or encouraging manufacturing of medical devices within the country.
Last time when FDI was permitted in the sector without conditions to increase manufacturing within the country, the whole idea got defeated as foreign companies simply put up marketing and trading shops in India without creating manufacturing bases. They simply imported goods and sold them here, increasing the country's import dependency. This time too, such things are going to happen. In a letter to MoS, commerce and industry, Nirmala Sitharaman, we have demanded a blanket ban on FDI in brownfield projects. For greenfield projects, we have demanded that at least 60 per cent of overall goods being sold by a foreign company in India have to be manufactured within the country. How big is the medical device industry in the country? How much of it is imported? The size of the Indian medical device market is nearly ` 30,000 crore. The industry is expected to grow nearly 10-fold in next 10 years because of increased healthcare spending, income and population growth. India's import dependency has been increasing over the years. In some electronic medical device segments, it is as high as 90 per cent. What are the major challenges the industry is facing? India has the potential and wherewithal to become a global manufacturing hub for medical devices. Yet, we have become import dependent. Some of the issues the industry is facing are rationalisation of tax structure, absence of export substitution policy, domestic preferential public procurement policy, separation of the medical device sector from drugs and cosmetics sector. As a result, a large number of domestic medical device manufacturers have either shut shop or turned importers.