India’s medical devices industry rose to the occasion during the Covid emergency, transforming the country within months from being an importer of PPE kits, masks and testing kits to an exporter of these products — not least due to an assured market, soft loans and other incentives.

But if a production-linked incentive scheme was introduced in 2020, it was also because of the persistently high degree of imports in a sector that is, quite literally, of critical importance.

India is a credible exporter of Class A and some Class B products, or low-to-medium risk medical devices such as syringes, needles, other disposables and electronic equipment. But it relies considerably on imports for C and D categories of products that go up the risk and technology ladder, such as, say ultrasound scanners; and cardiac, orthopaedic and dental implants.

The question here is: how can India, given its pool of technical and scientific expertise, become a hub for medical devices, combining quality and affordability. The policy steps taken so far, including the National Medical Devices Policy 2023 announced a few days back, do not fully address the issues involved, although the policy flags research and innovation.

According to the Parliamentary Standing Committee report on the industry brought out in September 2022, India’s $11 billion medical devices industry (₹90,000 crore) accounts for a global market share of 1.5 per cent.

Exports in FY22 were up 15 per cent at $2.9 billion, while imports were up 37 per cent at $8.5 billion. Imports of medical devices have nearly doubled between FY18 and FY22. China, US, Germany, Singapore and the Netherlands account for over half India’s imports. Reducing import dependence makes sense, given India’s capabilities.

However, the policy blocks are not in place. The recently unveiled policy does not address the issue of creating a separate law and regulator for this sector, which requires an altogether distinct level of expertise vis-a-vis managing ‘drugs and cosmetics’.

The regulatory uncertainty must be laid to rest to spur investment; a law in this regard has been in the works for years. The regulation must be comprehensive, and yet not arbitrary in its punitiveness. The second factor that could impede investments relates to tariffs, which appear to have favoured cheap imports. Light touch price control would be needed, given that health services are a uniquely imperfect market.

Above all, the Bureau of Indian Standards must raise its certification to global levels, so that promising Indian players do not spend crores for foreign certification to be accepted in their markets as well as ours. Institutes such as the IITs and IISc must be involved in the testing of products, with the right ecosystem, besides the med tech parks and PLIs, being created for research.

The fact that more than a handful of agencies are involved in regulation tells us that the industry needs freedom from clutter, and uniform rules across States, to get its act together.

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