Navigating the future – Prospects and challenges in India’s MedTech and IVD sector

India’s medical technology (MedTech) and in-vitro diagnostics (IVD) sector have been witnessing remarkable growth in recent years, driven by a combination of favorable government policies, technological advancements, and increasing healthcare needs. As we look ahead to the next couple of years, it is essential to note how the industry will evolve, with a particular emphasis on government policies, regulatory frameworks, import policies, government spending, standards, and other pertinent issues.

An international report in December 2023 found the Indian MedTech and IVD market to be the fastest-growing in the world, offering significant growth opportunities, encouraged by key strengths, such as market size, cost-effective manufacturing, a skilled workforce, and a thriving startup ecosystem. The Indian IVD market is estimated to touch USD 1.71 billion in 2024, with the prospect of touching around USD 2.34 billion by 2029. This growth is expected due to an increasing prevalence of chronic diseases, rising demand for advanced and more precise diagnostic solutions, and advancements in healthcare infrastructure.

While imports constitute over 75 percent of the current MedTech market, India has been working toward being self-sufficient under the Union government’s Make in India initiative, which is also expanding opportunities for global players looking at having a local footprint. There remains no doubt that over the last decade, the Indian MedTech ecosystem has witnessed an evolution with more budget going to R&D, increased venture capital investment, government funding and promising startups working on India-specific products.

While government policies play a pivotal role in shaping the trajectory of the MedTech and IVD industry, India has introduced various initiatives to promote indigenous manufacturing, fostering innovation, and ensuring quality standards. The government allowing 100-percent FDI under the automatic route for medical device manufacturing has attracted global investments and boosted industry growth. Additionally, initiatives, such as production-linked incentive schemes and establishment of medical devices parks across different states are encouraging domestic production and creating an enabling ecosystem for innovation.

The release of the First National Medical Devices Policy stresses on the government’s commitment to driving sectoral growth and fostering a helpful regulatory environment. India’s export potential in the MedTech sector is also promising, with exports expected to reach around USD 10 billion by 2025, highlighting the country’s growing competitiveness in the global market.

Government spending and investment in healthcare infrastructure and technology are crucial drivers of industry growth. India has witnessed robust FDI inflows in the medical and surgical appliances sector, totaling USD 3.22 billion from April 2000 to September 2023. Furthermore, schemes like production-linked incentives and investments in research and development (R&D) aim to foster innovation and drive economic growth in the sector.

Since maintaining stringent quality standards and regulatory compliance is essential for the MedTech and IVD industry, India has been aligning its regulatory framework with international standards to enhance product quality and facilitate exports. Additionally, investments in R&D and innovation are critical for developing cutting-edge technologies that meet global standards and cater to diverse healthcare needs.

The sector, however, faces some challenges that require attention. Bridging the gap between urban and rural healthcare infrastructure, ensuring affordability and accessibility of medical technologies, and addressing regulatory complexities are pressing concerns. Here it becomes imperative that we foster a culture of innovation, develop local talent, and promote indigenous R&D capabilities to sustain industry growth.

As India embarks on its journey toward becoming a global healthcare hub, addressing challenges, such as import dependency, quality assurance, and healthcare accessibility will require collaborative efforts from all stakeholders. The MedTech and IVD industry, which is poised for significant expansion and innovation, can fulfill its potential and contribute to a transformative healthcare journey by leveraging opportunities, embracing technological advancements, and fostering an encouraging ecosystem.