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To support the growth of the fledgling medical devices industry in the country, the central government has recently launched a scheme ‘Strengthening of Medical Device Industry’ with an initial outlay of Rs. 500 crore for three years from 2024-25 to 2026-27. It is a comprehensive scheme which targets critical areas of the medical device industry, covering manufacturing of key components and accessories, skill development, support for clinical studies, development of common infrastructure and promotion of industry activities. Of course, by launching this much needed scheme, the government has shown its commitment to strengthen the medical devices industry through focused interventions that yield substantial and transformational outcomes. The primary aim of this new scheme is to reduce import dependency, and to make the sector self-reliant. One of the scheme’s most important features is its focus on reducing India’s import reliance, which has been challenging for the medical device sector. So quite rightly, a substantial Rs. 180 crore has been allocated for the Marginal Investment Scheme, designed to incentivise the local production of essential components that make up a significant portion of India’s medical device imports. With capital subsidies of up to Rs. 10 crore per project, the scheme aims to encourage domestic manufacturing and reduce dependence on foreign products. The scheme is going to be a game-changer and it will not only help the industry but will also be a long leap in making India self-reliant in production of medical devices.
Certainly, the central government has taken a small but crucial step as despite the efforts over the last decade through schemes including the production linked incentive (PLI) scheme, the dependence on imports still continues to be around 70 per cent, mostly from China. The new scheme is expected to have a multiplier effect in augmenting the domestic manufacturing capacities with significant reduction in imports, and to promote quality, human resource development, safety and efficacy of medical devices, and also enhance the depth of medical device value chains in the country. To deepen the country's manufacturing capability along the value chains of different segments of medical devices, it is essential to incentivise domestic manufacturing of key components, raw materials and accessories along with medical devices under the list of devices for which exemption has been provided by the Department of Expenditure for Global Tender Enquiry (GTE) due to lack of domestic manufacturing to meet the procurement demand of public hospitals. This new initiative will stimulate local production, drive innovation, and enhance India’s competitiveness in the global MedTech market. No doubt, the central government’s latest initiative has the potential to reinvigorate Indian medical devices manufacturers. The domestic players who have become traders and importers and shifted to pseudo manufacturing will now again be motivated to become actual manufacturers and produce complete products and their components in-house. The government deserves kudos for this initiative as it will prove to be a game changer by providing the much needed thrust to address the unmet needs of the Indian medical devices industry.
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