Jatin Mahajan, Managing Director, J Mitra & Co shares his views on medtech industry in India and highlights the challenges & opportunities
The medical devices market in India stood at Rs. 77,539 crores in 2020 and is expected to grow at a CAGR of 35.4 per cent from 2020 to 2025 (IBEF report).
Diagnostics account for around 70 per cent of all therapeutical decisions, and it is the first line of defense against all diseases and ailments. But India has the lowest per capita spend of around USD 3 (INR 200) on medical devices and an import dependency of 75-80 per cent.
Healthcare is the largest service sector of the Indian economy, and yet providing access to quality healthcare for the 1.3 billion-plus population is a considerable challenge. Moreover, we house 16 per cent of the world’s population and 21 per cent of the world’s disease burden. Therefore, Aatmanirbhar Bharat (or self-reliant India) in medtech is not a choice but an unavoidable necessity. The corona pandemic has aptly proved that mass disruptions can happen anytime, and Aatmanirbhar is necessary for existence and survival.
Multinational corporations cater to the high-end segment comprising the diagnostics imaging segment. On the other hand, domestic players operate primarily in the consumables segment. Numbering about 800, these domestic players account for around 65 per cent of India’s total medical devices manufacturers.
The government has taken steps for the growth and proliferation of the sector in the country. It recognised the medical devices segment as a sunrise sector under the “Make in India” campaign in 2014. Accordingly, India has initiated schemes to strengthen the segment – which includes boosting research and development and augmenting manufacturing through the 100 per cent FDI route.
The Government’s intentions seem good, but the on-ground realities and concrete actions depict a somewhat different story – the intents are taking a very long time in translating into concrete time-bound actions. Under the aegis of AiMED, we have made numerous representations to the Government highlighting the various issues and concerns.
According to the Department of Pharmaceuticals, indigenous manufacturers have a disability of 12-15 per cent due to lack of sufficient infrastructure, logistical and supply chain issues, high cost of finance, power supply, limited design capabilities, low focus on R&D and skill development.
The current environment is choking the domestic segment and driving them to a slow death. Moreover, the PLI scheme does not consider the various disadvantages and constraints that the Indian device manufacturers face vis-à-vis the foreign manufacturers to the tune of 15 per cent. The business balance tips in favor of “exported-to-India” products.
The Indian manufacturers invest heavily to create a robust manufacturing infrastructure that makes India self-reliant, creates job opportunities, and boosts India as a global manufacturing hub. On the other hand, foreign players profiteer from the available option in India without any commitment towards its overall economic growth. And yet, these Indian manufacturers get no benefits and encouragement for their initiatives and allegiance.
India’s stand related to COVID-19 procurement has been in contrast to its Make in India initiative. It has focused on procuring from foreign companies and neglecting home-grown Indian companies with much better track records, creating a high-capacity, low-demand situation for Indian companies.
The medtech industry strongly urges the government to:
- Correct the duty structure on medtech devices
- Provide incentives for domestic production
- Improve the financial benefits for domestic manufacturers in the MSME category
- Implementing a Procurement policy that favors quality domestic products as against imported products
- Removing dependency on imported raw materials and creation of conducive business environments
- Adopt the rule-based classification of medical devices as per GHTF definition
- Implement legislative changes in favor of a comprehensive Medical Device Regulations
- Create a conducive ecosystem for SME’s focusing on medtech by establishing medical technology clusters with shared infrastructure and facilities
- Encourage greater collaboration between medical centers and technological institutions.
- Inclusion of medical technology education within the medical curriculum
- Insurance sector reforms to stimulate health insurance, thereby providing the financial incentives for medical technology innovation.
- Set up a venture investment fund to address the lack of early-stage venture capital
The Indian medtech industry has tremendous potential, not just for the domestic requirement but also for the international market. There is much that works to India’s advantage. But, the Indian medtech industry is like a caged lion waiting for the right opportunities, incentives, and environment to showcase its true might.
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