India must aim at medical devices import substitution: EEPC India -Deloitte report
With its import dependence of 70-90 per cent for different categories of critical medical devices, India must aim for ''import substitution'' before targeting other countries for exports, according to an EEPC India-Deloitte report recommendation - which can be among the most vital inputs for policy makers, in the wake of Covid-19 pandemic.
''India’s medical device market is heavily dependent on imports . As much as 70-90 percent of domestic requirement , depending on the product category, is imported. The US is the largest exporter of medical devices to India. It is estimated that, approximately 25-30 per cent of medical device imported to India comes from the US, '' said the EEPC India-Deloitte report which had suggested sectoral roadmap for increasing the country's exports. The council had commissioned the study to suggest a five-year roadmap for pushing exports in different engineering segments.
EEPC India chairman Mr Ravi Sehgal said, though the report had come out in 2019 , much before the outbreak of the coronavirus , its recomendations , especially with regard to medical devices are most appropriate in the present context. The report emphatically suggested that ''the major aim for medical devices market should be import substitution before targeting other countries for exports''.
Sehgal said the EEPC India Deloitte recommendation on import substitution is also in sync with the avowed national objective set by Prime Minister Narendra Modi, who stated that , “...We have to be self-reliant and self-sufficient. It (Coronavirus pandemic) has taught us that we should not look for solutions outside the country. This is the biggest lesson we have learnt.”
Despite the strong demand for medical devices, India's domestic manufacturing has remained low, confined to low-value products. Manufacturing within the country involves medical disposables and consumables, which require rather a low upfront investment compared to medical electronic devices.
Diagnostic equipment, primarily imaging devices such as scanning apparatus, X-Ray machines, and Computer Tomography Apparatus are some of the major imports. Consequently,diagnostic equipment forms the single largest component in medical device imports.
India has the 4th largest medical device market in Asia, after Japan, China, and South Korea. Globally, India is
ranked as the 20th major medical market, with a size of USD 6 Billion.
''Domestic manufacturers believe that, in India, lack of medical device regulations was a major cause for the low-medium brand image of India’s medical devices in the export market. Regulations are not enforced in most of the categories. The Indian medical device market was mostly unregulated before January 2018. Govt of India has released Medical Device Rules effective from 1 January 2018 to regulate this market.''
Although, Indian medical device manufacturing is witnessing entry of new companies offering novel products, the establishment of a stable base to meet the domestic demand is a long drawn process , However, the government has taken several initiatives to boost domestic manufacturing, including 100 per cent automatic FDI, setting up of Medtech Parks in multiple locations, etc , the report noted.