Going by recent reports on the medical devices sector, it is a space set to boom. It is also becoming a sector of opportunity for entrepreneurs in India, although the path ahead is not necessarily rosy.

A recent market research report by Netscribes on the Indian medical devices market underlined that “…India lags behind in manufacture of technologically advanced high-end medical equipment, and instead has to rely on imports from multinationals with extensive service networks.” However, it goes on to state that domestic manufacturers dominate in the supply of cheaper products and disposable equipment.

Medical devices tend to be niche and cater to specific requirements in the healthcare sector. So, whether through joint ventures or indigenous manufacturing, this is a segment that needs a boost in coming years.

An opportunity Shashi Kant Baliyan, Managing Director of ClearMedi Healthcare, was on a holiday to India in late 2009 when he found that Haryana did not have a single piece of equipment that helps treat cancer in any of its hospitals. That led him to attempt estimating the need for specialised medical devices across the country.

In January 2010, Baliyan set up ClearMedi Healthcare, a joint venture initiative between Medipass S.r.l. Italy, KOS S.p.A. Italy and Clearview Healthcare India.

Since kicking off operations in September 2011, his company has provided a range of core technologies to hospitals for cancer treatment.

“Cancer incidence in India has been as much as half that in Western countries, and there was hardly any penetration in smaller towns here,” he reasons.

In two-and-a-half years, ClearMedi Healthcare has managed some 350 installations across metros such as New Delhi, Hyderabad, Mumbai, Chennai, Kolkata and Bangalore. Baliyan has had buyers in Gwalior, Hissar, Vadodara, Patna, Madurai, Mysore, Coimbatore, Nagpur and Meerut as well. In Tier-2 cities and beyond, training to hospital staff and doctors is a part of ClearMedi’s offerings.

Staying the course Consider another forecast from two quarters ago. Grant Thornton India said in a report, “…the Indian medical device and equipment market is expected to grow to around $ 5.8 billion by 2014 and $ 7.8 billion by 2016, growing at a CAGR of 15.5 per cent” (published in Business Line on October 2, 2013).

In September 2013, Qmed posted an analysis of the potential in India for medical devices manufacturers stating, “Since a significant part of India’s population doesn’t have access to adequate public healthcare, the potential market for innovative medical device manufacturers is huge. If manufacturers can find effective ways to leverage low-cost, high-value medical devices, India could prove a very profitable market.”

But the fact remains that there aren’t enough domestic manufacturers catering to gaps in the healthcare sector.

So despite the huge estimates, medical entrepreneurs like Baliyan have to tread prudently.

“We’ve worked at making the equipment affordable, because we buy in bulk from other geographies. In fact, we’ve reduced costs by a third or even halved them.”

In the first year (January-December 2012), ClearMedi posted revenues of around ₹68 lakh and nearly ₹6.8 crore in the second year. Baliyan adds that funding is another challenge.

“With the joint venture, the scalability of the model is massive. But our projects are very capital-intensive. Banks want too much collateral, and I had to begin with my own money,” he says.

He is still looking at a presence in over 50 locations across India with an investment of about $ 100 million by the time ClearMedi Healthcare completes five years of operations in India.

For the entrepreneur, it’s about persistence in the face of odds.

But can the ecosystem mature in a way that it moves beyond the ‘favourites’ and caters to start-ups across the board that are meeting some obvious needs?

(Please send feedback, comments or suggestions to >emergingentrepreneurs@thehindu.co.in")

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