‘India’s medical device market to be supported by reforms’

The Make in India initiative will be a long-term driver of local medical device manufacturing, Fitch Solutions has said.

The scheme will continue to develop domestic production capabilities for medical device manufacturing as healthcare infrastructure continues to develop and go on to support medical device exports.

The initiative has given a much-needed thrust to the manufacturing of medical devices in the country as well as the development of related infrastructure.

Fitch said nearly 38 per cent of social infrastructure projects in India are in the healthcare industry.

Schemes that have been encouraging the market include the Production Linked Incentive scheme for promoting domestic manufacturing of medical devices which has attracted large investments and a significant total outlay.

Under this scheme, a five per cent incentive is provided on incremental sales of medical devices manufactured. Companies that meet the requirements will receive the incentives for a period of five years.

The scheme for the promotion of medical device parks will help develop the necessary infrastructure, providing 90 per cent of the project cost in north-eastern and hilly states and 70 per cent in other states.

The medical device market will be boosted in the long-term through the success of this initiative and its supporting policies, said Fitch. At the same time, diagnostic imaging and patient aids will be the most dynamic product areas registering low double-digit CAGRS in local currency terms throughout the forecast period. Diagnostic imaging will grow at a 202025 CAGR of 13.5 per cent in local currency terms and 10.7 per cent in USD terms, while patient aids is expected to grow at a 2020-25 CAGR of 14.1 per cent in local currency terms and 11.2 per cent in USD terms. In the short-term, diagnostic imaging will grow strongly throughout 2021 due to increased demand as a result of the Covid-19 pandemic, expanding by 40.8 per cent in 2021 and returning to mid-single digit growth from 2023, supported in the long-term by market advancements. Patient aids will be boosted in 2021 due to increased demand of therapeutic apparatus as a result of the Covid-19 pandemic and is expected to return to mid-single digit growth in 2023 as demand wanes, said Fitch.

Schemes that have been encouraging the market include the Production Linked Incentive scheme for promoting domestic manufacturing of medical devices.