The Indian medical device industry, the fourth largest in Asia, is expected to grow to USD 7 billion by end of 2016.
The sector is currently import dependent wherein the domestic firms primarily manufacture low technology products such as disposables/ medical supplies. Most MNCs are involved in distribution of medical technology products, although large global players have already set up manufacturing operations in India. However, in recent years, some domestic firms have expanded local manufacturing operations to produce cost effective medical devices.
Apart from growth dynamics such as greater spend in healthcare by Government of India and adoption of health insurance, other factors such as India's experience in IT innovation and the Government's 'Make in India' initiative are also set to drive this sector to the next level.
The Government and the industry is working towards creating a proper ecosystem for medical device innovation and to provide specific regulations for medical devices, which were earlier treated as pharmaceuticals under India's Drug & Cosmetics Act.
Manufacturing of Medtech devices in India is a sunrise industry and this industry offers considerable opportunities for foreign companies not only looking to export parts & components, semi-finished/ finished products, but also to leverage India as a low cost manufacturing destination. Many large players have also set up R&D unit in India to leverage the advantage of low cost skilled labour.
Examples include GE’s John F Welch Technology Centre in Bangalore and & Johnson’s R&D Centre for Medical Devices in Mumbai
It is only in the last one and a half decades that Indian companies have ventured into R&D and manufacturing of technology based medtech products and many Indian companies are actively looking to collaborate with foreign companies who have proven & innovative technology for advanced diagnosis and treatment solutions.
Foreign Direct Investment Policy
As per the press release, effective January 21, 2015, up to 100% FDI is permitted without government approval in new as well as existing companies that manufacture medical devices including in those companies that are engaged in the manufacture of medical devices that are regulated as drugs under Drugs & Cosmetics Act, 1940.