Prime Minister’s ‘Make in India’ initiative has been welcomed by the Indian IVD industry too.
Creation of designated manufacturing zones for medical devices has further boosted it. The Andhra Pradesh MedTech Zone (AMTZ), the first step in this initiative, also happens to be the first of its kind in Asia. We understand Telengana, UP and some states will follow. With the Government of India having already notified the correction in inverted duty structure, the economics will shift even more favourably. Transasia recently set up a greenfield manufacturing facility in Sikkim- first ever medtech company in the state and will soon be the first exporter from Sikkim too!
Further to scale up the domestic capabilities, Indian government is providing 100 per cent FDI for greenfield operations under automatic route and 100 per cent FDI for brownfield operations via the Foreign Investment Promotion Board (FIPB). For medtech companies, this is a simpler process to infuse funds to set up a new plant. The campaign is expected to attract global companies to set up manufacturing base in India which will in turn build up the components ecosystem and enhance the manufacturing capabilities.
On the flip side, the FDI carries with it the risk of letting global companies monopolise the sector eventually ending all opportunities to develop indigenous technology. Secondly, there is some apprehension on the quality standards capabilities of the MSME sector which contributes nearly eight per cent of GDP and 45 per cent of manufactured output. There are hardly 50 manufacturers with `50 crores turnover in the Indian medtech industry. More MSMEs with high quality standards are required.
To mitigate these concerns, government is providing assistance but
more is expected – given the lack of scale in many products, government
can prioritise certain products for manufacturing. High volume, low-tech, labour intensive manufacturing sectors are easy picks and but should quickly graduate to more complex ones. Frugal innovation is a significant strength that India can offer – encourage it. The government needs to provide policy support for the demand side of the medical device industry to accelerate growth.
Some good initiatives of the government are: public-private partnerships (PPP) to support health for all; National Health Policy 2017. Under this policy, the government has announced ‘Free Diagnostics Service Initiative’ for providing a minimum set of diagnostics to the underserved people in India. Nearly 20 states have subsidised diagnostics and allowed (or will) PPP play.
The government has also been actively encouraging the implementation of the National Health Mission, aimed at achieving universal access to healthcare by strengthening health systems, institutions and capabilities. Its two sub-missions are: National Rural Health Mission and the National Urban Health Mission.
The policy aims to reduce the maternal mortality rate, infant and child death rate due to many non communicable and infectious diseases. Reduction in premature
mortality from cardiovascular diseases, cancer, diabetes or chronic respiratory diseases by 25 per cent by 2025 is also targeted in this policy.
Each above rely heavily upon diagnostics. Today there is significant room to ‘correct’ the skewed GST on some of the diagnostics products. e.g. Instruments attract 18 per cent, Reagents/consumables at 12 per cent while diagnostic services are exempted. Such correction will only give further fillip to manufacturing in India.
As Indian med tech players gear up to ride the ‘Make in India’ wave, let’s make for the emerging countries, let’s make for the World!