Talking Point: Medical device industry in India at crossroads

The Task Force on Medical Device industry was created under the Department of Pharmaceuticals under the Chairmanship of the Secretary. The tariff rate on imported Medical Devices was brought down from 40% in 2005 to 5% (or 0%) by 2014. However, the tariff on raw-materials/ components needed for domestic manufacturing remained between 10 to 27%. 

In January 2016, Government, announced the first fiscal policy to support the Indian manufacturing by withdrawing Concessional Duty for few devices and nearly 60 pc of the devices got relief. But the IVD Products were touched and the Inverted Duty Structure remains obstacles for domestic manufacturing. 

Around 69% of the Indian population lives in rural areas and on the contrary 73% of qualified consulting doctors are urban areas and 8% of qualified doctors are in rural areas and remaining 19% are in semi-rural areas.  There is also an enormous rise in chronic diseases in rural areas.  

All this has resulted in a high demand for diagnostic services across the country and more in rural areas. The IVD market is estimated at Rs. 5,000 crores and growing at an annual rate of 18-20% across different segments. 

Indian Manufacturing Companies are unable compete with Chinese origin Medical Devices and Reagents because of the type of incentives they receive from Chinese Establishments are innovative and unimaginable. 

Domestic Industry wants to have a policy of 15% preferential pricing for Indian origin medical devices and reagents. The Indian medical devices and IVD industry is at crossroads. If the Centre does not complete the best efforts started and provide tariff protection and preferential market access to domestically manufactured products, India will continue to remain import dependent and domestic manufacturing will remain limited.