Budget 2024: Jatin Mahajan seeks redressal of concern areas on a war footing

New Delhi: Sharing his expectations for the upcoming Union Budget 2024, Jatin Mahajan, Secretary, Association of Diagnostic Manufacturers of India (ADMI) said: “The Medical Devices Industry is currently making headlines and demonstrating remarkable growth. With 2023 revenues at about ₹1,04,760 crores (US$12.8 billion), India is one of the leading MedTech markets and is likely to reach US$ 50 billion by the year 2030 with a CAGR of 16.4 %. This demonstrates that the potential for medical devices in India is enormous.”

The Union Budget is slated to be presented by Finance Minister, Nirmala Sitharaman on July 23, 2024.

Jatin Mahajan listed his detailed expectations:

Developments in 2023 have been very encouraging for Indian MedTech, with developments like National Medical Devices Policy 2023 (NMDP 2023), National Policy on Research and Development and Innovation in the Pharma-MedTech Sector in India, Scheme for Promotion of Research and Innovation in the Pharma MedTech Sector (PRIP), increased investments in the medical devices sector and the establishment of various medical device parks across the country. These are great initiatives, and we await their positive impact on the medical devices industry.

India Brand Equity Foundation (IBEF) puts India’s share in the overall medical devices market at just about 1.65%, putting India at 4th place in Asia after Japan, China, and South Korea, and amongst the top 20 globally.

We are hopeful that the Indian Government will continue to support and encourage this growth trajectory through adequate and timely policy interventions. The most critical aspect is exports-imports. Medical devices export from India stood at ₹19,803 crore (US$ 2.40 billion) in 2022, and likely to reach US$10 billion by 2025 (IBEF).

The Government constituted the Export Promotion Council for Medical Devices in 2023. This body must be strengthened to address the industry’s export issues adequately. EPC-MD can accelerate international growth and must be empowered and fast-paced. The Commerce Ministry’s task force to address the exporters’ woes of all exporters will hopefully also examine the MedTech exporters’ woes and address their trade and technical barriers. A clear-cut path needs to be chalked out. We would certainly like to be addressed in budget 2024.

Government’s decision in 2023 to allow imports of refurbished medical devices contravenes the National Medical Device Policy 2023, and opens the ground for the large-scale dumping of older technology and electronic waste from other countries. This is against the spirit of Atma Nirbhar Bharat and Make in India. It will stifle many Indian companies looking to develop low-cost, high-tech, innovative new-age solutions. This should be disallowed, except in critical cases where Indian solutions may not be available for the next few years.

Quality standardisation is a vital aspect hampering the overseas growth of Indian medical device companies. There is a need to bring in rationalisation. The Government must ensure that Indian standards like ICMED and BIS enjoy the same respect, credibility, parity and acceptance as international standards like ISO, FDA, CE, MDR and AIMD. Without an ‘at-par’ status, Indian exporters will continue to face bottlenecks, and forced to seek multiple region/country-specific and product specific certifications for exports.

With the Government being the largest buyers of medical device, MedTech companies dependent on Government procurements to make their business viable and sustainable. India’s procurement policy seems to favour imported devices, and the current trend highlights more imports than procurements from domestic players. Purchase preference policy for made-in-India products is toothless and ineffective, and is being largely ignored by both national and state government entities.

Competent Human resources and skill development are critical for business growth, and this need compelling government attention. The Government needs to partner with the industry to identify the specific need-gap for timely addressal of the issue through the Skill development initiative. Industry-academia linkages should be strengthened. Professional courses that fully cater to the industry’s skill requirements and ensure higher employment for the trained personnel need to be introduced.

AI – ML – IoT, and telemedicine have a massive influence on the medical devices segment, and there is an urgent need to put safeguards and guidelines in place. AI implementation and data privacy require a comprehensive AI and cyber security policy. The Government must take a leadership position and put the necessary framework in place, to safeguard against cyber-attacks, like the one on AIIMS in 2022.

Inverted duty structure has been the longest-standing woe of the medical devices segment. Raw materials imports are taxed more than finished imported products, making manufacturing in India unviable. The Government’s stoic inaction on this front is surprising and dismaying.

India is the global Centre for frugal medical device engineering. Most technological products and innovations originate from a well-developed ecosystem, and the US, Europe, and Japan collectively account for roughly 85 per cent of the approximately $220 billion in revenues. There is an urgent need for G2G and P2G interactions and interfaces to transfer relevant technologies to India (as is happening in defence productions).

There are several other issues, concerns, and attention areas that we have highlighted regularly – insufficiency of raw material & supplies, access to clinical trial samples, and the limited effectiveness of the PLI scheme for smaller players.

For a prominent position in the global MedTech map, the Government must address these concern areas on a war footing.