India’s MedTech and IVD sector – A decade of transformation

India’s healthcare landscape is undergoing a rapid transformation, propelled by factors such as a burgeoning population, rising disposable incomes, and a growing emphasis on preventive healthcare. At the core of this evolution lie the MedTech and IVD sectors. To fully harness its potential, a comprehensive, long-term strategy is imperative.

India has made strides in this direction with initiatives like Ayushman Bharat, the National Health Policy, and the Make in India campaign.

India’s MedTech sector offers a booming opportunity with massive efforts done through streamlining regulations (release of Medical Devices Rules), fostering public–private partnerships (AMTZ, Academia and University collaboration), strengthening data protection (Data Protection and Security Act 2023) and intellectual property rights. Simplifying the regulatory process can expedite market entry and encourage domestic R&D. Public-private collaborations can accelerate technology transfer, bridge the infrastructure gap, and improve healthcare delivery.

A significant challenge hindering the sector’s growth is India’s heavy reliance on MedTech and IVD imports. India’s MedTech imports were estimated at around USD 12 billion in 2022 that keep increasing yearly. The government’s Make in India initiative offers a promising avenue for attracting global players and nurturing local capabilities. Building a robust domestic supply chain will enhance self-reliance and contribute to cost reduction. The government can provide incentives for domestic manufacturing, such as tax breaks and subsidies, and invest in skill development programs.

India’s public healthcare expenditure as a percentage of GDP is currently around 1.3 percent, significantly lower than the global average of 6 percent. Increasing public healthcare expenditure to at least 2.5 percent of GDP can create a larger MedTech and IVD products market.

India has the potential to emerge as a global medical tourism destination. The country’s low-cost, high-quality healthcare services can attract patients from across the globe.

Adherence to global quality and safety standards is paramount. India must invest in strengthening its regulatory framework, promoting accreditation and certification programs, and encouraging industry self-regulation. Implementing robust post-market surveillance systems and establishing a solid pharmacovigilance network can further build trust in the Indian MedTech industry.

The PLI scheme offers a significant opportunity. The government has allocated ₹63 billion for the MedTech PLI scheme. To maximize its impact, the government should provide targeted incentives for high-value products, invest in skill development, promote R&D activities, and establish mentorship programs for startups and SMEs in the MedTech sector.

The next decade presents a unique opportunity. India can become a global leader by implementing a comprehensive strategy that addresses policy, regulation, manufacturing, investment, quality, and infrastructure. The insights from McKinsey and FICCI underscore the potential of the Indian MedTech and IVD sector and provide valuable recommendations for policymakers and industry stakeholders.