Right move gone wrong

While the Cen­tre has right­fully recog­nised med­i­cal de­vices as a sep­a­rate cat­e­gory for pol­icy mak­ing, its de­ci­sion to al­low 100 per cent for­eign in­vest­ment in the sec­tor will threaten do­mes­tic play­ers


Gov­ern­ment recog­nises med­i­cal de­vices as a sep­a­rate sec­tor, but un­re­stricted for­eign di­rect in­vest­ment is not a wise move

WITH THE hope of mak­ing health­care af­ford­able, the Cen­tre on De­cem­ber 24 last year al­lowed 100 per cent for­eign di­rect in­vest­ment (fdi) in med­i­cal de­vices sec­tor. The pol­icy also recog­nised med­i­cal de­vices as a sep­a­rate cat­e­gory for the first time which was till now a part of drugs. V K Sub­bu­raj, sec­re­tary, Depart­ment of Phar­ma­ceu­ti­cals, says the move will re­duce In­dia’s ex­ces­sive de­pen­dency on im­ports for med­i­cal de­vices which at present stand at 85 per cent.The coun­try is ranked among the world’s top 20 med­i­cal de­vice users by UK-based re­search group Espi­com. And do­mes­tic man­u­fac­tur­ers say the de­mand is in­creas­ing ev­ery year.

Though the gov­ern­ment is right in read­ing the chal­lenges faced by the in­dus­try, the so­lu­tion, fear man­u­fac­tur­ers and ex­perts, has the po­ten­tial to worsen the sit­u­a­tion. Ra­jiv Nath, co­or­di­na­tor of the As­so­ci­a­tion of In­dian Med­i­cal De­vice In­dus­try, says the de­ci­sion will cre­ate prob­lems for small man­u­fac­tur­ers. Nath’s con­cern stems from the fact that most med­i­cal de­vice man­u­fac­tur­ers in the coun­try are small when com­pared to global man­u­fac­tur­ers. He says just 50 do­mes­tic man­u­fac­tur­ers have over ` 50 crore turnover in med­i­cal de­vices and most of the oth­ers are even smaller. “The move to al­low 100 per cent fdi in brown­field projects would make small man­u­fac­tur­ers easy pick­ings for mncs,” says he. Shobha Mishra, direc­tor of health ser­vices at in­dus­try body ficci, says that while the move will help star­tups get fund­ing, “ac­qui­si­tion of small man­u­fac­turer by multi­na­tion­als” is a fear the gov­ern­ment needs to ad­dress.

Do­mes­tic man­u­fac­tures have, how­ever, wel­comed the de­ci­sion to cre­ate a sep­a­rate cat­e­gory for med­i­cal de­vices for pol­icy mak­ing. As per the Cabi­net or­der, med­i­cal de­vices will now fall un­der the med­i­cal and den­tal in­stru­ments and sup­plies cat­e­gory. San­jay Ban­er­jee, chair­per­son of the In­dia chap­ter of the Ad­vance Med­i­cal Tech­nol­ogy As­so­ci­a­tion, an in­ter­na­tional group of med­i­cal de­vice man­u­fac­tur­ers, says it was a long-stand­ing de­mand which has fi­nally been met.

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