Indian medical device exports have continuously risen for 20-30 years. However, a significant imbalance exists between imports and exports. India is targeting a reduction of medical device imports from 80% to 50% in the next two decades.
We are actively strategising and implementing measures to reduce imports. This will boost the domestic medical device industry and enhance India's self-reliance in healthcare, paving the way for a more robust and sustainable future.
Industry Overview
The Indian medical devices market has grown steadily over the past decade, and this growth trajectory is set to continue. This has been catalysed by increasing healthcare expenditure, rising awareness about healthcare, technological advancements, and government initiatives. Valued at around $10 billion in 2020, the Indian MedTech industry is projected to reach $50 billion by 2025, a testament to its immense potential.
India's medical device products include diagnostic imaging equipment, surgical instruments, consumables, implants, etc. However, we are still heavily dependent on foreign manufacturers, primarily from countries like the United States, Germany, and China, for high-end imaging equipment and advanced surgical instruments.
The Current Ground Realities
Our overpowering dependence on imported medical devices poses an imminent challenge to healthcare delivery and economic sustainability. This vulnerability was starkly evident during the COVID-19 pandemic, underscoring the urgent need for us to reduce this dependency and strengthen our domestic manufacturing capabilities.
The exorbitant cost of imported medical devices burdens healthcare expenses for patients and hampers access to essential treatments, particularly for those from low-income backgrounds. This stark reality underscores the urgent need for India to bolster its domestic medical device manufacturing capabilities and reduce import dependency. However, a sub-optimal supply chain, inadequate infrastructure, financial constraints, and limited access to modern technology hinder the growth and scalability of domestic manufacturing, making it difficult for Indian companies to compete with foreign manufacturers on both quality and price.
Action Plan
Policy Reforms: The Indian government is crucial for creating an enabling growth environment. This includes implementing policy reforms to ease regulatory hurdles, incentivise domestic manufacturing, and promote innovation. Recent reforms, such as the National Medical Devices Policy 2023, have aimed to align with international standards. We must ensure the harmonisation of Indian standards with internationally accepted standards. This will streamline the process of acceptance of our products in other countries.
Streamlining approval processes, financial incentives such as tax breaks and subsidies, and fostering R&D initiatives will encourage domestic companies to invest in manufacturing high-quality medical devices.
Investment in Infrastructure and Technology: Developing robust manufacturing infrastructure and adopting advanced technologies are essential steps in enhancing the competitiveness of the Indian players.
The Government is investing in specialised medical device parks and industrial clusters with state-of-the-art research, production, and testing facilities. Collaborations between industry, academia, and research institutions will facilitate technology transfer and skill development within the sector.
Capacity Building and Skill Development: To meet its ever-growing demand, India needs a skilled workforce trained in manufacturing, quality control, and regulatory compliance.
The government should prioritise initiatives for skill development and vocational training tailored to the needs of the medical devices industry. Partnering with industry associations and academic institutions to design specialised training programs and certifications can help build a talent pool capable of driving innovation and growth in the sector.
Promotion of Domestic Procurement: Increasing domestic procurement of medical devices by government healthcare institutions can significantly boost the domestic industry.
The government must mandate that a certain percentage of medical devices be sourced domestically for public healthcare facilities and incentivise procurement from domestic manufacturers through preferential pricing and procurement policies.
Domestic Production of Raw Materials: To increase self-reliance, India must try to meet its raw material needs. The Government must facilitate the local manufacturing of critical raw materials.
The Association of Diagnostics Manufacturers of India (ADMI) has extended its support to the Department of Pharmaceuticals for collaborating with institutes like NIPER, AIIMS, IITs, and CCMB to produce essential Raw materials locally.
International Collaboration and Market Access: Government-to-government (G2G) collaboration and international partners can facilitate technology transfer, knowledge exchange, and market access for Indian medical device manufacturers.
The government should focus on forging strategic partnerships with leading global players in the medical devices industry to leverage their expertise, access new markets, and enhance the competitiveness of Indian products. Additionally, participating in international trade fairs, exhibitions, and regulatory harmonisation efforts can showcase India's capabilities and attract investments and collaborations abroad.
Research & Development: Local manufacturers need to invest significantly in research and development to innovate and improve the quality of their products. Collaboration with international technology providers and academic institutions can help transfer knowledge and adapt advanced technologies for local production.
The government has launched incentive schemes supporting telemedicine, digital health, and AI startups through BIRAC. Implementing the Digital Information Security in Healthcare Act and other data privacy laws is a step towards using data to drive innovation while ensuring the safety of sensitive information. The NMDP 2023 also encourages investments in technologies like 5G and IoMT to boost innovation.
Institutes such as NIPER, AIIMS, and IITs engage in research and development, including early-stage prototypes, Innovative testing methodologies, and collaborative projects with industry partners. Their expertise and capabilities should be further tapped.
Availability of Clinical Samples: This is a critical issue for the IVD industry within medical devices. The government must create regulatory guidelines to provide access to clinical samples to licenced IVD manufacturers.
Quality Improvement: Emphasizing quality assurance and obtaining international certifications can help local products compete better in domestic and international markets. This includes compliance with global standards such as ISO 13485 for medical devices.
Market Expansion and Diversification: Indian manufacturers should not only focus on the domestic market but also look at export opportunities. By expanding their market presence, they can achieve economies of scale and reduce per-unit costs, making their products more competitive.
Reducing India's dependency on imported medical devices is essential for enhancing healthcare accessibility, promoting economic self-reliance, and strengthening the country's position in the global medical devices market. The Indian government and medical device manufacturers can work together to achieve the ambitious target of reducing imports from 80% to 50% and pave the way for a self-sufficient and resilient healthcare ecosystem.
