FDI policy amendments should augur well for MedTech sector: MTaI

New Delhi: The union cabinet has recently approved amendments in the FDI policy and has liberalized it in key sectors including that of pharmaceuticals.

Reacting to the fresh changes in the policy including the change in the definition of medical devices, the Medical Technology Association of India (MTaI) in a statement has expressed hope that the government’s decision would remove the barriers and prove to be a boon for the medical technology sector.

In his comments on the government’s move, Mr Pavan Choudary, DG, MTaI mentioned, “One of the important determinants of quality in the medical technology sector is FDI (and technology transfers which go hand in hand with it). This government had the foresight to bring FDI in the medical devices on the automatic route. This single noteworthy move, by encouraging the relevant public, made the FDI surge from an annual average of $63 Million to $161 million in 2015 and to $439 million in 2016.”

“The surge was demonstrative of the potential of this sector and what ease of doing business for the relevant communities and global participation can accomplish. This ascending gradient continued in January-March 2017, however, has witnessed a severe dent since” Mr Choudary said while adding further that it is too soon to definitively say what caused this fall. “However, there is no gainsaying the fact that unnuanced market interventions or the atmosphere of regulatory unpredictability and haste are the usual factors which drive away strategic investors.”

Mr Choudary called the MTaI members as the largest propellers of FDI in the Medical Devices sector and with the latest amendment announced last week are hopeful of retrieving at least some of the momentum lost.

Elaborating further, he said “How can we regain it one may ask? The amendment clearly defines the category and thus removes any ambiguities from the liberalizing order. There have been instances where some sub-categories in the medical devices sector could not avail for themselves the simplicity which was afforded by bringing medical devices on the automatic route because of a restrictive definition of medical devices in the Drugs & Cosmetics Act. These unintended barriers are being unmistakably removed and this should augur well for FDI in this sector.”