India’s domestic medical devise industry constitutes just 1.6 per cent of the global medical device trade. Medical equipment used in the nation is imported 80 per cent of the time. The Union Ministry of Trade and Industry reports that India imported medical devices worth 63,200 crore in 2021–22, an increase of 41 per cent from 44,708 crore in 2020–21.
The PLI scheme provides a 5 per cent incentive on incremental sale of medical equipment over the base year 2019–20. If a company generates sales of Rs 250 crore in 2020–21 and Rs 100 crore in 2019–20, the extra Rs 150 crore in sales between the two years is referred to as incremental sales. The incentive will take the form of a cash reimbursement to the business account.
The scheme requires that the minimum incremental sales be Rs 60 crore in the first year, Rs 120 crore in the second year, and progressively Rs 280 crore by the fifth year.
Microbusinesses are those with yearly revenues of up to Rs 5 crore, whilst small businesses have revenues up to Rs 50 crore and medium businesses up to Rs 250 crore.
Himanshu Baid, Managing Director and Co-Founder, Poly Medicure expounding on PLI schemes mentioned, “Though there are PLI schemes available, their impact hasn’t been as expected. Moreover, they are more focused towards big companies rather than small companies and MSME which comprises 80 per cent of India’s manufacturing.”
“The PLI scheme for device manufacturing is having requisite criteria of Incremental sales worth 60 crore which the MSME sectors are unable to fulfil. The successive PLI schemes for pharma did took care of Incremental sale but its investment criteria are exorbitantly high which the MSME can’t achieve,” Baid added.
Underlying the Limited Access to Capital for MSME Baid explained, “Medical device Industry being a capital-intensive industry, there is shortage of capital because of which the medical technology sector should also get grant for scaling up.”
Speaking on regulatory challenges faced by medical device manufacturing industry in India, Baid stated, “Regulations too are overlapping. The new startups are unaware of who is regulating them as there is high ambiguity. Hence, we need to streamline regulatory environment and multiple government department approval for medical devices should be brought under single window clearance.
The lack of uniform regulations, the absence of a robust regulatory framework, and lengthy approval processes, also increases the time and costs of manufacturing medical devices.
India also faces competition from Other Countries. Although, it is the forth largest manufacturer of medical devices in Asia, it encounters stiff competition from other countries such as China and Taiwan, which have more advanced infrastructure, lower costs, and more supportive regulatory environments.
Principal Advisor, Health Policy, Confederation Of Indian Industry (CII), Dr Shubnum Singh said, “It is important to find this sweet spot on where lies the market need. On the other hand, there is operational safety and efficiency with device which should also be satisfied by the devise makers. In this cited point of care device like Glucometer used in diabetes which saves people life.”