 "technology, health, medical devices, start ups")
Steps such as raising customs duty on certain items, banning import of used or old equipment, and introduction of performance linked incentive scheme for value-added production will help India's medical devices industry touch $ 50 billion by 2030, a report by think tank GTRI said.
Suggesting six action points for the government and industry for accelerating growth of the sector, the Global Trade Research Initiative (GTRI) also asked the government to not allow input tax credit (ITC) for the IGST paid on import of items where basic customs duty is zero; combatting foreign influence; and encourage local sourcing for essential Make in India products.
"The Indian medical devices industry can expand from $ 12 billion to $ 50 billion by 2030, reducing import reliance to 35 per cent and boosting exports to $ 18 billion from $ 3.4 billion at present. The industry's growth potential could surpass that of the smartphone sector due to India's expanding health sector, projected to reach $ 600 billion by 2030," GTRI Co-founder Ajay Srivastava said.
He said this shift could generate over 1.5 million jobs in medical device manufacturing and healthcare services like hospitals and labs.
It has also suggested that basic customs duty be raised from the current 0-7.5 per cent to 15-20 per cent for devices not covered under WTO's Information Technology Agreement - 1.
"This approach is WTO (World Trade Organization) compatible, as bound duties stand at 40 per cent. Initial duty hike should apply to products with demonstrated quality production and exports of around Rs 20 crore," it said.
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Global import duties for medical devices vary such as in Brazil it is 14 per cent, Russia (0-15 per cent), India (0-7.5 per cent), China (3.3-17 per cent), South Africa (0-20 per cent). It also said that developed countries, and China does not allow import of used products.
Old devices used for MRI or ultrasound scanning, X rays, Mammography may provide faulty prognosis and threaten lives, the report said adding many old devices are at risk of spreading harmful contaminants like depleted Uranium.
It asked for a Performance Linked Incentive (PLI) plus scheme for high import-intensive products, such as diagnostic reagent kits, surgical instruments, and other medical devices.
"Offer incentives to companies that add significant value in India rather than just assembling imported components," the report said adding India should guard against foreign interests dictating policy outcomes reports of foreign lobbies.
It added that the government should ensure that Indian manufacturers can compete effectively with foreign imports for vital supplies, including masks, oximeters, syringes, thermometers, examination gloves, and blood collection tubes, in government tenders and critical healthcare scenarios.
The government notified the National Medical Devices Policy in April but the current domestic supply and exports are far below potential, the report said.
"Local firms fulfil just 34.6 per cent of the $ 12 billion Indian market needs, while imports cover the remaining 64.4 per cent, costing $ 7.6 billion in FY'2023," Srivastava said adding achieving the full potential of the sector will require further support as the sector faces 15 per cent cost disability due to high cost of power, supply chain inefficiencies.
Government support is needed to check dumping, ramp up domestic production and cut imports. India has 1,200 local companies and multinational corporations that manufacture a wide range of devices, except for advanced high-tech ones.
The sector showcased its capabilities during the COVID-19 pandemic by swiftly scaling up the production of essential items like ventilators, Rapid Antigen Test kits, PPE kits, and N-95 masks for both domestic and global use. Currently, India produces around $ 7.6 billion worth of medical devices, out of which $ 3.4 billion is exported, and the remaining $ 4.2 billion is used domestically.
However, the annual demand for medical devices in India is valued at $ 11.8 billion, with the rest being covered by imports totalling $ 7.6 billion.
Commenting on the sector, Administration in charge of Patna-based Sanjeevani hospital Manish Singh said the government should adopt a three pronged strategy to boost growth of this segment.
Singh suggested domestic industries to manufacture technology driven medical equipment of high quality at minimum possible prices; gradual substitution of foreign-made devices in big private hospitals with the Indian ones; and creation of a department of trained sales force armed with sufficient data to target the world market.
Echoing similar views, Richa Chauhan, Senior consultant (Oncologist), Mahavir Cancer Sansthan, said Government of India's initiative to give a push to medical equipment manufacturing in the country is a "highly appreciable" decision.
The diagnosis and treatment of many diseases including the life threatening cancer requires high-end machines like CT Scan, MRI, Cobalt-based Radiotherapy units, and linear accelerators.
"With only a few manufacturers across the world for radiotherapy machines, there is an urgent need for indigenous production of these machines," Chauhan said. She suggested that the manufacturers should work in close collaboration with the users of the machine to rectify or modify the devices accordingly.
"With no dearth of talent in our country, I am sure we can utilise this opportunity and become a leading manufacturer and importer of medical devices," she added.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
