India’s medical technology industry is expected to achieve exports of up to US$ 20 billion (Rs. 1,69,000 crore) by FY30, according to the Confederation of Indian Industry (CII). While the sector shows significant growth potential, increased government incentives and enhanced ease of doing business are required to help meet this ambitious target.

Key Challenges and Recommendations

During a recent address, CII Chairman of the National Medical Technology Forum, Mr. Himanshu Baid, highlighted several areas that need attention to help the sector reach its full potential:

1. Expansion of PLI Scheme: Mr. Baid emphasized that the Production Linked Incentive (PLI) scheme, which currently covers a limited range of medical devices, should be expanded to include more products. This would encourage local production and reduce dependency on imports, boosting the sector's ability to compete in the global market.

2. Export Incentives: India’s medical exports currently stand at approximately US$ 4 billion (Rs. 33,800 crore), while imports are significantly higher at nearly US$ 8 billion (Rs. 67,600 crore). To balance this trade deficit, Mr. Baid called for export incentives to offset hidden manufacturing costs. These incentives could support the competitiveness of Indian-made medical devices in international markets.

3. Lowering Tariffs and Streamlining Regulations: To help India increase its medical technology exports, Mr. Baid suggested reducing tariffs on raw materials and medical device components. He also advocated for the simplification of regulatory processes, which could help the industry scale production and accelerate shipments.

4. Creating a Dedicated Regulatory Body: In line with improving regulation, Mr. Baid proposed the creation of a separate regulatory body for medical devices, distinct from the pharmaceutical sector. This body would be tasked with overseeing standards, certification, and safety regulations specifically for medical technology products, making it easier for manufacturers to comply with global norms.

India's Competitive Advantage

Mr. Baid pointed out that India already holds a competitive advantage in several key areas:

• Low Labour Costs: India’s cost-efficient labor is one of the main drivers for its growth in the medical technology sector. This advantage positions India well in the global market, particularly as more countries adopt the “China plus one” strategy, seeking alternatives to Chinese manufacturing.

• Software and Hardware Expertise: India’s established expertise in software and hardware development further complements the growth of its medical technology sector, enabling local companies to offer innovative solutions at competitive prices.

Policy and Infrastructure Needs

To unlock its export potential, Mr. Baid highlighted several policy measures that could propel India’s medical technology sector:

• Increased Remission under RoDTEP Scheme: The Remission of Duties and Taxes on Export Products (RoDTEP) scheme, which reimburses taxes and duties on exports, could be more beneficial if it is raised to 2-2.5%. This increase would provide manufacturers with greater financial relief, helping them become more competitive globally.

• Improved Export Infrastructure: Faster shipment times and better export infrastructure were also identified as key factors for increasing medical technology exports. Streamlined logistics and upgraded facilities would enhance the country’s ability to meet the demands of international markets.

Conclusion

The medical technology industry in India is on the verge of substantial growth, with exports projected to reach US$ 20 billion by FY30. To achieve this ambitious target, government support through expanded schemes like PLI, export incentives, and regulatory reforms will be crucial. By leveraging India’s strengths in cost-effective manufacturing, technology innovation, and global demand for alternatives to China, the medical technology sector can play a significant role in driving India’s economic growth while improving global health outcomes.

With the right policies in place, India can unlock its full potential and emerge as a major player in the global medical device market.