As India breaks into the ranks of the top economies of the world, the time is right to seize every available opportunity to make domestic industry thrive. One neglected segment, though, is medical device manufacturing — despite it having stepped up during Covid-19, when global supply chains were disrupted and there was a call for an atmanirbhar (self-reliant) Bharat.

That segment of industry now needs a supportive business environment from the government, a booster shot of sorts, to achieve its full potential and become a force to reckon with globally.

Union Budget 2025 did set the economy on a growth path with its overall macro-economic and policy direction, including a ‘manufacturing mission’, and support for micro, small and medium enterprises (MSMEs) and startups, apart from steps to boost research and development. The government’s intention to have a trust-based light regulatory mechanism and decriminalisation of several laws was also much-needed. The Budget also increased allocation for schemes to promote medical device manufacturing to ₹5,200 crore, from ₹3,300 crore.

While these are certainly tailwinds, they may not be enough to transform India into a leading global manufacturing hub, as envisioned by the National Medical Devices Policy 2023. Over 10 states are planning to put up medical devices parks, realising the huge potential, but these may remain mere greenfields unless the Central government offers a predictive tariff to address India’s 70 per cent import dependence for medical devices, and nominal protection to drive investments into manufacturing.

Tariff cover

Automobile giants flocked to India to manufacture, as preowned cars were not allowed to be imported and tariffs were as high as 125 per cent. India emerged as a global manufacturing hub and exporter of cars. Similarly for mobile phones, with duties raised from zero to 20 per cent, every major global brand started manufacturing in India and preowned imports were disallowed, making India the second largest producer globally.

In the case of medical devices, the import tariff of 0-7.5 per cent is hardly a deterrent; in fact, medical devices imports are expected to cross ₹75,000 crore this fiscal. To stem this, the import duty must be raised to 5-15 per cent to provide Indian businesses a level playing field.

Low import duty had incentivised Indian manufacturers to become importer traders and pseudo manufacturers, as it was much more convenient to import than grapple with over 33 regulatory approvals to put up a factory.

A few brave entrepreneurs attempted to break the glass ceiling in making high-end devices. India makes and exports high-technology CT scans and MRIs, heart valves, pacemakers and ventilators. Top makers of syringes, sutures and stents, for example, export more than they sell in India. 

Indian consumers may be better protected by monitoring the MRP labelling on imports and capping these if found irrationally high at 20-30 times the import landed prices. The healthcare security of the country is jeopardised by high import dependence; a prescriptive pill is desired, else we will miss the bus to becoming an alternative to China as a global supply source.

(The writer is Forum Coordinator, Association of Indian Medical Devices Industry (AiMeD). Views are personal)

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Published on February 9, 2025