India still remains 80% import dependent in medical devices

Industry veteran, Rajiv Nath takes us through the Indian medical devices market scenario during 2022 and the industry outlook for 2023

About Author: Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD) & MD, Hindustan Syringes & Medical Devices. An industry veteran with rich experience spanning decades, Mr. Rajiv Nath has been a strong voice for Indian medical technology players. He is also President of All India Syringe and Needle Manufacturers Association (AISNMA). A regular participant of the national and international forums, Mr. Nath has traveled to more than 52 countries across the globe and has attended numerous meetings organized by WHO, UNICEF, ICAS.

India is known as the pharmacy of the world but in the medical devices sector, it lags far behind and is hugely dependent on imports. Currently imported medical devices account for 80 per cent of the domestic market, hurting profits of many small manufacturers in the sector.
The medical devices imports continued to grow unabated by 41% in FY22. India imported medical devices worth Rs. 63,200 crores in 2021-22, up 41% from Rs. 44,708 crores in 2020-21, as per data from the Union Ministry of Commerce and Industry.
China remained the top import source for India as medical device imports from China grew 48% from Rs. 9,112 crores in 2020-21 to Rs. 13,538 crores in 2021-22. Imports from the USA also increased steeply by 48% to Rs. 10,245 crores in 2021-22 from Rs. 6,919 crores in 2020-21. The value of medical devices from China was nearly the same as the combined value of imports from Germany, Singapore and the Netherlands in 2021-22.
It’s been a roller coaster ride as the capacity utilization of the domestic industry has dropped from the peak utilization levels of 100 per cent (and expansion of capacities) in mid-2021 to less than 33% currently in 2022 for covid critical medical devices but there’s been a rebound for non-covid related medical devices to pre Covid levels as elective surgeries and other healthcare interventions that were being postponed were taken up. While there’s rebounded demand but a cash flow tight market is keeping this demand subdued. The manufacturers are caught between highly inflationary times as prices of plastics, steels, paper & energy cost spiked and on other hand manufacturers face intense competition from spare capacities created and unable to pass on the cost increase fully to their clients.
Policy changes are very encouraging
On the other hand, at the policy front 2022 has been an eventful year with many strategic initiatives under deliverance whose impact will unfold over the next few years. The positive developments that took place in the Indian Medical Devices industry in the year 2022 are just a few months ago, the government. announced an extension of the PLI Scheme, announced financial assistance to 4 Medtech Parks in Himachal Pradesh, Uttar Pradesh, Madhya Pradesh & Tamil Naidu (in addition to the 2 existing Med Tech Parks at AMTZ, Vishakhapatnam & Telangana Med Tech Park at Hyderabad); announced creation of a revamped  Medical Devices Promotion Council under DoP,  then a Medical Devices Exports Promotion Council  to be located at U.P’s Medtech Park and rescheduled the roll out of the  Medical Devices Regulations to April 2023 and the starting of the registration and regulatory process for Resellers of medical devices and the Launch of ICMED Plus Product certification for medical devices.
It’s been a roller coaster ride as the capacity utilization of the domestic industry has dropped.”
In addition, the Parliamentary committee on Health came out with a set of recommendations to create a separate law and regulatory framework for medical devices and various steps the government may consider addressing the 80% import dependence. We are also delighted that the union government has also consulted stakeholders in drafting a Medical Devices Policy and look forward to its announcement.
Apart from the steps taken by government to encourage manufacturing of medical devices the Parliamentary Committee has suggested GOI needs to make manufacturing of medical devices in India to be a viable proposition as done for consumer electronics and mobile phone industry by reviewing and consulting stakeholders for a predictable tariff protection policy and for protecting ethical marketing with a cap on MRP or on trade margins.
We are more than hopeful and positive that the government will act upon the request of the Indian Medical Device Industry for a Separate Department of Medical Devices. This key strategic need has also been recommended by the Parliamentary Committee on Health.
India still remains 80 percent import dependent in medical devices. The Department of Pharmaceuticals and the Ministry of Chemicals & Fertilizers have so far had limited success to carry out the mandate given to them to boost manufacturing of medical devices and address the 70 to 80 per cent import dependency and have limited expertise of this industry as the high precision device industry has very little synergy with Chemical & Fertilizers industry.
Domestic manufacturing is the key
The vision ahead for a separate Department for Medical Devices is to make India one of top 5 manufacturing hubs for medical devices worldwide and be nodal interface of manufacturing industry with all Central Government’s Department’s to catalyse the growth of the Indian medical device sector-Make in India, Made by India & Made for India.
With government’s push to Make in India ‘Aatmanirbhar’ in medical device manufacturing during the pandemic, several local units making masks, PPE kits, thermometers, and gloves made their foray, eyeing the growing market.
During pandemic time, from 1,200 units, the numbers had gone up to 1,800. However, since medical devices imports continue to grow unabated, many units had to close down amid declining demand as Covid-19 waned even as imports from countries like China kept on rising. Now, it is estimated that there are around 1,500 such local units, and many more are on the verge of closure. The Association has urged the government to neutralize the 12-15 per cent disability factor in manufacturing medical devices in India.
The aspects that need attention to ensure that India genuinely become indigenous suppliers of medical devices are:
  • An adequate supply of indigenous raw material will guarantee seamless production and help in bringing down the cost of production
  • ICMED certificationBuyers need to seek ICMED certification from manufacturers which is granted by Certification Bodies accredited by NABCB under QCI
  • Separate Law for Medical Devices that provide innovation and quality access by Consumers while addressing Patient Safety Concerns
  • Rational Tariff StructureInverted duty goes against the spirit of Make in India and Aatmanirbhar Bharat. There must be incentivization for investors to make the Medical Products in India
  • Financials and IncentivizationThe government must give preference to Indian products for government procurements on basis of Quality Certification & Design Indian Certification to incentivize quality and indigenous innovation
In addition to the steps taken by government to encourage manufacturing of medical devices by setting up of dedicated MedTech parks and a PLI scheme GOI needs to make manufacturing of medical devices in India to be a viable proposition as done for consumer electronics and mobile phone industry by a predictable tariff protection policy, by protecting ethical marketing with a cap on MRP of maximum 4 times over imports landed price and by not scaring off investors by bring in a separate medical devices law that decriminalizes minor offences .
The road ahead is full of opportunities
If within 2 years of Covid pandemic, India could ramp up rapidly with high tech innovative quality medical devices with conducive policies to encourage growth, the Indian Medical Device Industry can achieve much greater success and make India the 2nd factory in the world for medical devices.
If the government implements even 70% of the recommendations made by the Parliamentary committee, we can see a reversal on the import dependence and growth of the domestic industry which will bring in affordable wider access to medical devices leading to better healthcare delivery. We are very optimistic and hope that we can realize our vision to be among the top 5 Manufacturing Hubs in the world for medical devices.

**This article was first published in the January 2023 edition of the BioVoice eMagazine. The views expressed by the author are his own.