OUTLOOK OF MEDTECH SECTOR IN INDIA -
The Indian medical devices industry comprises four segments – consumables and implants, diagnostic imaging, instruments & appliances and patient aids and, others. The current market size of the medical devices industry in India is estimated to be $11 bn. Medical device sector is projected to register a CAGR of 14.8% and is expected to reach $11.86 bn in 2021-22 & is poised for significant growth in the next five years and reach upto USD 50 Billion. India relies on imports to supply its healthcare system with medical technology, with a dependence of 7080% on high end devices. The medical tourism, one of India’s fastest growing industries, has created significant demand for specialized & high-tech medical equipment. There is consistent demand for surgical instruments, cancer diagnostics, orthopedic and prosthetic equipment, imaging, orthodontic and dental implants, and electro medical equipment.
At outset of this new decade, the world witnessed one of the biggest and toughest health crisis in the form of COVID-19. India being no different also coped up with this tough time. But challenging times often bring out the best out of us, a great opportunity is underlying beneath the tough times and is likely to better shape the growth of healthcare industry in India. The experiences gained during this time have demonstrated the potential fundamental shifts across the healthcare and well-being continuum. In the current Union Budget an allocation of Rs 2,23,846 crore towards healthcare and wellness , a whopping 137% rise from the budget last year. This clearly shows that Healthcare and Wellness in now one of the biggest priority of the Government. The Government of India has taken several steps to ensure the growth of a vibrant ecosystem of medical devices manufacturing in India. Medical Devices has been recognized as a sunrise sector. A Productions Linked Incentives Scheme for Medical Devices was introduced to incentivize the local manufacturers. Under PLI scheme, incentive @ 5% of incremental sales over the base year 2019-20 will be provided on the segments of medical devices identified. This will lead to large incremental production over a period of 5 years. The outlay for the PLI scheme is Rs 3,420 Crores. Govt. will also help in development of 4 medical device parks with an outlay of Rs 400 crores.
These park would enable domestic manufacturing of high-end medical devices at a lower cost , significantly enhance job creation and push forward Governments ageing of reducing dependence on Imports.
On the regulatory front, Medical Devices Rules published by the Govt. in 2018 and amended in 2020 will bring conformity with Global best practices and standards. It has introduced riskbased classification system and product standards for medical devices, single window clearance, definitive timelines for obtaining registration and licenses. It has also consolidated requirement of obtaining registration certificate and import license into a single license for foreign manufacturers. India allows 100% foreign direct investment in medical devices on the automatic route for both brownfield and greenfield setups. Strong FDI inflows reflect the confidence of global players in the Indian market. $600 mn was received in the last 5 years with an estimated total of $2.1 bn since April 2000.
The demand for medical devices is predicted to rise so as to meet the demands of a growing population and inclusion of rural in mainstream economy. According to the United Nations, India’s population is set to touch 1.45 billion by 2028, making it the world’s most populous nation. With an increasingly ageing population, there will be a greater demand for better health care facilities and medical devices. Also, the society is more prone to lifestylerelated ailments, including obesity, diabetes, stroke and cancer with socioeconomic changes.
With many private players making their foray into healthcare, there is a growth in the number of hospitals, diagnostic centres and specialized facilities. Most of these hospitals have their quality and accreditation at par with international standards. The medical devices sector has grown considerably during last few years and plays a critical role at each stage of the healthcare continuum. The current demand and supply side dynamics clearly provide a significant opportunity for manufacturing medical devices in India. The Government of India’s ‘Make in India’ initiative presents a platform for the sector to identify key imperatives for growth, revisit the operating model and explore possibilities for creating a step change in the medical devices sector.
Many companies are looking at India as an alternative manufacturing hub. Medical Devices industry along with the govt. are working towards a conducive business climate with simplified land and labor laws, better infrastructure and logistics, enabling India to develop a robust manufacturing ecosystem. This will help to attract foreign capital, latest technology, create jobs and boost our exports. Skill and Scale is the primary focus to be both quality and cost competitive and serve a global customer base. Huge scope exists in Med Device sector, not only to be selfreliant but also capture a considerable share of the global supply chain.
The demand for medical devices is predicted to rise so as to meet the demands of a growing population and inclusion of rural in mainstream economy.
Despite the current challenges, some advantages India continues to offer are in areas like reduced cost of labor, a high level of technical expertise, and funding from Venture & PE funds. India also continues to make an upward journey towards Ease of doing Business Index. With changing economic & regulatory environment and a futuristic and collaborative approach, India is poised to exponentially grow its medical devices sector to its full potential in coming year which will lead to considerable improvement of Healthcare standards in India and make Healthcare more accessible and affordable to citizens of our country.