India has received a total of over US $114 billion Foreign Direct Investment (FDI) in past three financial years—2014-15, to 2016-17. This figure is 40% more while comparing to previous three fiscal years—2011-12 to 2013-14.
FDI is prerequisite in making India a manufacturing hub. And to attract more FDI in the country, India is gradually easing norms in various sectors including medical devices manufacturing space.
With much awaited Medical Devices Rules in effect from Jan 1, 2018, the country expects to promote and boost its medical devices manufacturing industry. The benefits of new rules are:
- Except 15 categories of medical devices, the rule has separated medical devices manufacturing industry from pharmaceutical industry
- Relaxation of four phases clinical trial norms in the devices sphere
- Classified devices into four categories as per risks associated with them—low (class A), low moderate (Class B), moderate high (Class C) and high (Class D)
- The rule will ease the manufactures in obtaining licenses from authorities without prior audit of manufacturing site if they are manufacturing the devices with low risk
- The end of periodic renewal system of licenses. The licenses (manufacturing and import licenses) will be valid until it is suspended or cancelled
The new rule has not just benefitted 800 Indian medical devices manufacturers of the country but is playing key role in attracting medical devices manufacturing multinational companies (MNCs).
With the ease in norms and the potential exposed by medical devices market in this South Asian nation, many MNCs are entering in India to set up their own facilities or are acquiring domestic manufacturers. Some of its examples are:
|3M||Manufacturing plant in Pune|
|Becton Dickinson||Manufacturing facility in Haryana|
|Hollister||Manufacturing facility in Haryana|
|Philip Medical System||Acquired Mumbai-based Medtronics Alpha X-Ray Technologies|
Besides new rule, country’s initiation to set up three Med-Tech Parks in three different states— Andhra Pradesh, Maharashtra and Gujarat—is also one of the prominent factors to lure domestic and foreign investors in India.
The parks will have in-house common manufacturing facilities and also facilitates with raw material procurement which aims to reduce the cost of production of medical devices significantly. This will offer competitive advantages to Indian medical devices manufacturers over imported ones and discourage the import of medical devices.
Currently, India imports over 65% of medical devices and exports nearly 30% of domestic production to more than 150 countries across the globe.
Moreover, the rising population of India another promising factor to drive the market of medical devices in the country. As per UN, India is estimated to be the most populous nation of the world with a population of 1.45 billion by 2028.
In order to address the growing medical need of rising and ageing population, the country requires better healthcare facilities and medical devices.
Hence, due to all this, the market of medical devices in India is emerging as sunrise sector for investors. It is estimated to witness five-fold growth reaching US $25 billion by 2025 from US $5 billion (excluding rural market potential) at present.
For more information on “Key Medical Device Companies in Asia-Pacific, 2016” please visit https://store.frost.com/key-medical-device-companies-in-asia-pacific-2016.html
Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at email@example.com
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at firstname.lastname@example.org | +603 6204 5830