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Innovation and ease of doing business to fuel the growth of Indian MedTech and pharma industry

The landscape of Indian healthcare is all set to undergo a huge transformation, driven by cutting-edge advancements in medical technology. From enhanced patient care to diagnostics to integrating artificial intelligence (AI) for smarter diagnostics, this year shall become a landmark year, taking Indian healthcare to a higher trajectory.

As India strives to enhance its position as a global player in the healthcare sector, the medical devices industry shall witness continued expansion, offering significant opportunities for growth, investment, and technological innovation during FY2024-25.

The government, in its interim Budget of 2024, has announced establishment of a corpus fund of ₹100,000 crore that will extend low-cost and zero-interest loans for research and innovation. Private companies can avail these loans up to 50 years, and this will mark a new pathway for the progress of the MedTech sector. There is a need to facilitate faster approval for setting up R&D centers and faster approvals for products/devices.

The prospects for the medical devices industry in India look promising in 2024 as the sector continues to undergo significant growth, following the implementation of the National Medical Devices Policy 2023 under the supervision of Medical Devices Promotion Council. The Medical Devices Export Promotion Council as well as enforcement of Medical Devices Ruless making licensing mandatory for manufacturers and importers, is expected to further boost the domestic industry by fostering a conducive business environment. Similarly, collaborations between domestic and international players for technology transfer and technical know-how shall go on to contribute to the development of cutting-edge medical devices within the country.

Similarly, the launch of the Promotion of Research and Innovation in Pharma MedTech Sector (PRIP) Scheme and the National Policy on Research and Development and Innovation in Pharma-MedTech Sector is a noble and ambitious intent to support Prime Minister Narendra Modi’s vision of an Atmanirbhar Bharat. The new policy and the PRIP scheme will lead to a coordinated approach by bringing various institutions and R&D projects on to a common platform, enabling a closer connect and also to seek competitive advantage.

While we are excited about the expected trends of growth, we need to note that our current domestic supply and exports are still below potential. Indigenous companies fulfil just 34.6 percent of the USD 12-billion Indian market needs, while imports cover the remaining 64.4 percent, costing USD 7.6 billion in FY2023. The Indian medical devices industry has the potential to expand from USD 12 billion to USD 50 billion by 2030, reducing import reliance to 35 percent and boosting exports to USD 18 billion. This shift alone could create 1.5 million jobs. However, achieving the full potential of the sector will require further support as the sector faces a 15-percent cost disability due to the high cost of power, multiple regulatory approvals, supply chain bottlenecks, etc.

We expect the central government to remove Input Tax Credit for IGST on items with zero import duty to prevent unfair advantages over domestic producers and halt the import of used or old medical devices, ensuring safety, environmental protection, and domestic industry growth.

We also want to encourage affordable access to medical devices by ethical suppliers. There must be a strong vigilance to monitor the MRPs of medical devices being imported and cap excessive artificially inflated MRPs.

The potential of the Indian medical devices industry can be realized through these strategic actions, contributing to economic growth, self-sufficiency, and improved healthcare services. Healthcare access in India needs to be affordable and of high quality, so it is imperative to build reliance on a robust, quality, and price-competitive domestic industry that relies on fair marketing practices.

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