In the past three years, the import of medical devices by India has increased despite talk about local manufacture by state and central governments. In FY 2020-21, the country imported US$ 6.24 billion (Rs 45,000 crore) of medical devices. The figures in FY 2018-19 were US$ 5.7 billion and in FY 2019-20 US$ 5.84 billion. In the FY 2020-21 financial year, the preponderant imports of US$ 3.6 billion were of electronic medical equipment that is in the main imported from the major global manufacturers by hospitals and diagnostic centers.
The central government is keen to encourage the manufacture of medical devices and equipment in the country and has in principle approved financial inputs for the infrastructure and development of four medical parks that are coming up in Himachal Pradesh, Tamil Nadu, Madhya Pradesh, and Uttar Pradesh. In addition, the central government has also added the manufacturing of medical devices to its list of Production Linked Incentive (PLI) schemes. Effective from FY 2021 to FY 2028, the PLI scheme for medical device manufacturing is of the order of Rs 3,240 (US$ 435 million) which will, ideally, attract significant devices in this sector. The schemes are the Department of Pharmaceuticals which operates under the Ministry of Chemicals and Fertilizers.
It is reported that 42 proposals have already been approved for the PLI scheme for medical devices. These entail investments of Rs 1,0599.33 crore by promoters, who say the projects will create at least 6,400 new jobs. According to the government, the medical device market in India at US$ 11 billion is the fourth largest in the world after Japan, China, and South Korea.
The Indian government’s information and estimates suggest that the country’s medical device market is growing at a CAGR of 15%. However, the government is anticipating an acceleration in production and consumption of medical devices with a projected CAGR of 37% to reach US$ 50 billion (Rs 37,000 crore) by 2025. It is not clear if this is a realistic expectation or an ambitious projection since it needs to be accompanied by a significant increase in government expenditure on healthcare beyond the measures to contain Covid-19.
