Medgate Today

OUTLOOK OF MEDTECH SECTOR IN INDIA -

- HIMANSHU BAID

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.

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