As an industry leader, I am glad that the government’s Make in India initiative recognizes medical devices as a sunshine sector. Catering to a population of 1.2 billion and importing 70 percent of the medical devices, is definitely not a viable situation for any country.
Today, in spite of the liberalization of government policies allowing up to 100 percent FDI through the automatic route, very few MNCs are setting up their manufacturing bases in India. We still have a long way to go. It is appalling to know, that India loses `60 lakh crore a year, due to poor healthcare system. And it goes without saying diagnostics forms a base for healthcare and medical devices play a very important role.
To counter this loss, what we need is to Make in India, in order to address the two basic needs of affordability and accessibility. What this industry needs is the approach adopted by the automobile sector. Today, every single automobile manufacturer is making in India. And this is because the import duty on parts is only about 10 percent while on finished cars it is up to 90 percent. So obviously, it makes sense to manufacture in India and that is how it has become a booming industry, providing automobiles at affordable prices.
I believe that this model should be replicated in the medical devices sector if we are looking at reducing the burden on imports and making healthcare affordable.
On the positive side, there is a lot of support that the government is extending to ensure that the medical devices sector is considered as significant as the other sectors. The task force constituted by the government aims to include the segregation of medical devices from drugs. Currently only 15 categories of medical devices are regulated. The new set of rules should be able to enhance ease of doing business and ensure availability of quality medical devices.
As a manufacturer of diagnostic instruments, for me the direction in which the industry is moving is very exciting! It has steadily grown at a CAGR of 15.8 percent. As per industry estimates, the Indian medical devices market will grow to USD 50 billion by 2025. Currently, India is counted among the top 20 global medical devices market and is the fourth largest medical devices market in Asia after Japan, China, and South Korea.
There is a sea of opportunities for the Indian manufacturers. The government and industry need to work closely for a focused approach encompassing distinct and specific policies, an encouraging fiscal environment, large healthcare spend, a supportive environment for R&D and its commercialization, attracting global players, and at the same time encouraging indigenous players to scale up. The setting up of medical technology industrial parks linked with industrial corridors and technological transfer institutions is a positive move. Further the government’s efforts in encouraging FDIs, PPP, and inverted duty structure correction are all precursors to the growth of this sector.
Transasia has endorsed the Make in India concept right from the 1990s and was the first Indian diagnostic company to do so. We have been successfully combining world-class technologies from our global subsidiaries with efficient, low cost manufacturing in India to develop technologies in every area of clinical diagnostics and serve the needs of India and the emerging markets. Manufacturing in India at our facilities in Daman, Baddi, and Mumbai has helped us provide high quality, affordable solutions that are tailored to meet the domestic needs. Our latest manufacturing facility at Sikkim further strengthens our Make in India capabilities and helps us cater to the diagnostic needs of the far-east India and provide employment opportunities to the local population, who otherwise travel to different corners of the country in search of employment.