India yet to become Aatmanirbhar in medical devices sector

With government’s push to Make in India ‘Aatmanirbhar’ in medical device manufacturing during the pandemic, several local units making masks, PPE kits, thermometers, and gloves made their foray, eyeing the growing market.

However, many units had to close down amid declining demand as Covid-19 waned even as imports from countries like China kept on rising. Now, it is estimated that there are around 1,500 such local units, and many more are on the verge of closure, laments Rajiv Nath, forum coordinator, The Association of Indian Medical Device Industry (AiMeD), an umbrella organisation of domestic medical device manufacturers representing the interest of over 1,500 manufacturers of medical devices.

He said during pandemic time, from 1,200 units, the numbers had gone up to 1,800.

However, medical devices imports continue to grow unabated. India imported medical devices worth Rs. 63,200 crore in 2021-22, up 41% from Rs. 44,708 crore in 2020-21, as per data from the Union Ministry of Commerce and Industry. The Association has urged the government to neutralise the 12-15 per cent disability factor in manufacturing medical devices in India.

Nath said, “NITI Aayog and the Department of Pharmaceuticals recognises that Indian manufacturers have a 12-15 per cent disability factor in manufacturing medical devices in India. We urge the Government to neutralise this disability for reduction of medical devices imports in India as was in the case of consumer electronics, including mobile phones and even in the toy industry.”

At present, the duty on Chinese imports ranges mostly from zero to 10 per cent, but the bulk of the items are in the 7.5 per cent category and one item at 25%.

The Department of Science and Technology (DST) and Department of Biotechnology (DBT) should sit together and work to seek correction of tariff to a nominal 15 per cent so that the entrepreneurs can survive and have a productive relationship with Academic institutions for innovations in process and product development or incremental improvements in performance to become competitive, Nath added.

The Association has requested the government to expedite steps to end the 80% import dependence and ensure patients’ protection, stronger quality and safety regulations, price controls to make medical devices and quality treatment accessible and affordable and ethical indigenous manufacturing viable.

China remained the top import source for India as medical device imports from China grew 48% from Rs. 9,112 crore in 2020-21 to Rs. 13,538 crore in 2021-22. Imports from the USA also increased steeply by 48% to Rs. 10,245 crore in 2021-22 from Rs. 6,919 crore in 2020-21. The value of medical devices from China was nearly the same as the combined value of imports from Germany, Singapore and the Netherlands in 2021-22.

The capacity utilisation of the domestic industry had dropped by the October-December quarter of 2021-22. From the peak utilisation levels of 100 per cent, by November 2021, around 33 per cent, or one-third of India’s medical devices making capacity, was estimated to be lying idle. This is even higher currently, said Nath.

Our analysis shows India’s top five medical device import sources China, USA, Germany, Singapore and the Netherlands – together account for Rs. 37,519 crore, or 68%, of the total value of imports, he added.

The Association has also analysed the top 50 medical device import items from China to identify the areas of greater dependence for India. A bulk of the imported medical devices from China (in value terms) fall in the ‘other items’ sub-sections under various major categories, it found.

It has called for shifting from an 8 Digit HS Code to a 10 Digit HS Code as done by USA and Europe to give more granular data for enabling better analysis and policy making. Highlighting the urgent need for a separate department for medical devices, the AiMeD has requested Prime Minister Narendra Modi to change the name of Department of Pharmaceuticals (DoP) to Department of Pharmaceuticals & Medical Devices or to have a separate Department of Medical Devices to instill confidence among the local manufacturers.

In fact, recognising this huge import volume, dependency and long technology development cycle of medical devices, the Indian Council of Medical Research too has stressed on need for providing holistic support across the medical device development and commercialization cycle including R&D, scale-up, validation, regulatory compliance, market access etc. Daily Pioneer