The Indian healthcare industry size is expected to touch USD280 billion by 2020, from an approximate value of USD160 billion in 2017.
With major investments in Medical Tourism, Healthcare IT and Pharmaceutical sectors, and a recent amendment to the country’s FDI policy, it is no wonder that India is on its way to a booming and vibrant healthcare landscape.
India’s medical device sector is heavily reliant on foreign imports
India’s medical device sector is substantially import dependent, with around 75-80% of demand met through companies from around the world. The domestic industry, though accounting for a comparatively small sliver of the medical devices used in the country, is gradually growing.
India has amended its FDI Policy
Earlier this year, the Indian Federal Government made some major changes to its FDI policy, providing more clarity on the rules for investing in the medical devices industry, and further expanding the list of devices that can now attract a Foreign Direct Investment. The updated list of medical devices can be found here.
The Updated list of Medical Devices that can now attract FDI
The Indian government has removed a clause from its existing FDI Policy, delinking it from the Drugs and Cosmetics Act of 1940. The move has widened the range of medical devices that can now attract a Foreign Direct Investment.
· Any instrument, apparatus, appliance, implant, material or other articles, whether used alone or in combination, plus any software tool, intended by its manufacturer to be used especially for human beings or animals for diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder.
· Any product or software that will assist diagnosis, monitoring, treatment, alleviation of, or assistance for, any injury or handicap, investigation, replacement or modification or support of the anatomy or a physiological process, supporting or sustaining life; disinfection of medical devices, control of conception and which does not achieve its primary intended action in or on the human body or animals by any pharmacological or immunological or metabolic means, but which may be assisted in its intended function by such means will now be considered as medical device irrespective of its status in the eyes of the drug regulator.
· Any accessories to such instruments, apparatus, appliance, material or other articles, a device which is reagent, reagent product, calibrator, control material, kit, instrument, apparatus, equipment or system, whether used alone or in combination, intended to be used for examination and providing information for medical or diagnostic purposes by means of in-vitro examination of specimens derived from the human body or animals.
The rise of the Private Sector
India’s private healthcare currently accounts for almost 74% of the country’s total healthcare expenditure, and is expected to grow its capacity at an annual rate of about 24% until 2020. This exponential growth can be attributed to a number of factors – tax benefits from the government and market preference over public hospitals to name a few.
Through the private sector, the average patient is able to get access to higher quality care and state-of-the art medical products and services across the country. The growth of the private sector poses as a huge opportunity for international companies looking to enter the country.
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IBEF, 2017, ‘Healthcare in India’, India Brand Equity Foundation
SKP Business Consulting, 2016, ‘The Medical Device Industry in India’.
India Briefing, 2018, India’s Medical Devices Industry: Choosing an Investment Model
Sengupta A., Nundy S., ND ‘The private health sector in India’