Medical device and equipment market in India is undergoing a significant transformation with several factors contributing to its evolution. The major ones are the governmental push with regulatory changes and the increasing demand for quality equipment at low cost. The Medical Devices and Equipment industry, valued at US$ 2.5 billion comprises 6 percent of India’s US$ 40 billion healthcare sector. It is growing at a faster annual rate of 15 percent than 10-12 percent growth seen in the overall healthcare sector.
Challenges to be addressed
Although the country has considerable manufacturing capability in the low-end devices segment, the high-end equipment manufacturing has to catch up a lot.
Currently, India imports almost 85-90 per cent of the sophisticated medical devices from other countries, primarily China due to low cost. Even though the government has allowed 100 per cent foreign direct investments (FDI) in companies manufacturing medical devices through the automatic route, there is a lot that needs to be done to set necessary infrastructures like supply chain and logistics channels. The government also needs to take steps to reduce the high cost of finance for local manufacturers.
Another step in the same direction which is also a demand of medical equipment manufacturers would be to reduce the effective rate of Goods and Service Tax (GST) on medical devices to 5 percent from the present 18 percent. At the same time, there is also a need for the Government to set up import restrictions and duty protection on the import of medical devices in India, which would restrict imports and give a fillip to the growth of local manufacturing.
“India has some of the best doctors in the world and state-of-the-art healthcare facilities, the strong foothold in the medical devices manufacturing sector will only further reduce the cost of treatment and at the same time enhance the country’s image as a global healthcare destination,” says Deepak Sood, Secretary General, ASSOCHAM.
Considering the level of quality control required in this sector, manufacturers often have to trade off with the overall throughput which again is not desirable. Hence, they need technology to strike the right balance and ensure that quality products are made with utmost efficiency.
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