‘Make in India’ for medical devices: A song with no lyrics

RAJIV NATH | Updated on January 19, 2018

File picture of a ‘Make in India’ mascot made of tablets and bottles in Mumba... the tendency is still to look at imports   -  PAUL NORONHA

Three years on, the pro-localisation campaign for medical devices continues to flounder for want of policy incentives and implementation

It brings little cheer that the World Economic Forum (WEF) ranked India among the Top 30 on a global manufacturing index. India would not have been ranked so had it not been for its sheer market size as the fifth largest in the world.

The irony is that India is behind smaller countries like Czech Republic and Austria, both smaller than Gujarat in size, for example.

When 'Make in India' was launched, there was a slogan and a vision. But this emotional connect now needs to be backed by a policy. A start was made with the Public Procurement Order by the Department of Industrial Policy and Promotion. What is needed now is implementation of measures to achieve the vision.

So far, 'Make in India' appears to be a song that's been marketed without all the lyrics penned in. And that rings starkly true when it comes to medical devices.

To sell a product, its quality and performance specifications claimed by the seller need to be vetted. The marketing fails if the product fails to live up to the expectations created by the hype and buyers become scarce.

Similarly, for ‘Make in India’ to succeed, the framework of a policy and a strategic road-map (similar to product specifications) need to be clear. Once investors have confidence in the deliverables and implementation of the strategy, they will step forward and manufacture.

For instance, the Government recently revised the Customs duty on electronics up to 20 per cent from 0-10 per cent to maintain the investment climate and the same is sought for medical electronics where we depend on imports for 90 per cent of the country's needs!

Other countries like the US have a 'Buy American' policy and use a Trade Agreement Act to keep out competing imports from developing countries like India and China to their public institutions. Similarly, China uses tariff, non-tariff barriers and 'Buy Made in China' based policies to motivate importers to set up manufacturing bases in China to retain market.

But, in India, pseudo manufacturing flourishes as manufacturers are turning into importers for their brands. India needs to implement ‘Make in India’ and reduce the 70 per cent import dependence of the over $10-billion medical devices market.

For this, the Government should increase the basic import duty on medical devices in the range of 10-15 per cent to make manufacturing more viable than importing, and give nominal protection to investors.

The Health Ministry needs to expedite a 'Buy Indian' policy with preferential pricing for Indian medical devices and weightage for ICMED/ISO certified and Design India certified products for promoting quality and indigenous development.

Till we have regulations in place, we need to enforce a ban on refurbished medical equipment of over three years for ensuring patient safety. And the IS/ISO 13485 standards need to be mandatory for medical devices under the BIS Act as an interim regulatory measure for patient safety till we get a Medical Device Law.

The Department of Pharmaceuticals should accelerate a trade margin capping proposal in the range of 50-100 per cent, depending on the value of the devices or ask the Department of Revenue to introduce a tax-based disincentive to discourage importers and manufacturers from labeling at a high MRP.

The Centre will have to take a holistic view of the sector as piece-meal reforms will not work if India wants to emerge a global Medical Devices manufacturing hub.

(The writer is Forum Coordinator of Association of Indian Medical Device Industry (AiMeD) and Joint Managing Director of Hindustan Syringes and Medical Devices Ltd. Views expressed are personal)

Published on January 19, 2018

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