The Indian medical device industry has the potential to touch $47 billion by FY30, four times its current size of $12 billion, says a KPMG report. The growth will be driven by increasing healthcare needs and the government's commitment to facilitate growth, it suggests.
The suggestion comes in the backdrop of a KPMG survey with medical device industry leaders which revealed that 90% of the respondents found lack of predictability in policies acting as a major barrier to operating in the Indian market. Similarly, 85% considered the pricing policy framework as a challenge while 75% found absence of an established supplier base and ecosystem as the problem. Broadly classified into five segments – electronics equipment, surgical instruments, implants, in vitro diagnostic devices and consumables and disposables – the medical devices sector is 70-80% import dependent in India. Import dependence is higher in high-end sophisticated device segments.
A collaborative effort of KPMG, Invest India and Asia Pacific Medical Technology Association (APACMed), the report proposes multiple recommendations including predictable regulatory environment, harmonisation of quality standards, a friendly public procurement policy, creation of supplier ecosystem and skilled talent pool and establishment of "brand India" as a global hub for medical device manufacturing and innovation.
On changes on the regulatory front, the report called for a single central authority for medical device regulation and a long term roadmap for 10-15 years detailing the growth plans and implementation timelines. It wanted the Bureau of Indian Standards (BIS) to harmonise the Indian standards with globally acceptable quality standards to enable domestic device makers attain global competitiveness.
The report suggests a series of measures to promote innovation and proposes an innovation linked incentive (ILI) scheme on the lines of the existing production linked incentive (PLI) scheme. The need for seed capital to facilitate R&D on frugal innovation and establishment of innovation parks were other suggestions.
On building a supplier ecosystem, the report wanted the government to take necessary steps to create pay-per-user common testing facilities, machine tool centres, solid waste management units and warehouses.
The report however says that the government's PLI scheme, clusters of medical devices parks and improved regulatory approval processes are steps in the right direction to support domestic manufacturing.