The central government on Wednesday approved 100 per cent foreign direct investment (FDI) in medical devices via the automatic route. The move came as a relief to the Indian health care sector, because at the moment, India imports about 70 per cent of its requirement for medical devices.
Under the automatic route, there will be no need for Foreign Investment Promotion Board’s permission to acquire an existing company or set up a new manufacturing unit in the medical devices sector.
According to Vrinda Mathur, director at Grant Thornton India, the move will give India’s medical devices sector the much-needed impetus and capital to focus on capacity building and product development. It will also “set the foundation for India to become a significant player in the global medical devices market just like pharmaceuticals”, he said.
“Easing of norms for medical devices industry by creating special carve out in the extant FDI policy on pharma sector will encourage FDI inflows in this area,” said the official statement issued after the Union Cabinet meeting in New Delhi.
“In this age of super specialisation, if medicines and pharma are one aspect, in which India has attained a certain amount of core competence, we still haven’t achieved that in medical devices, particularly which are to be installed in human body for the purpose of treatment,” Arun Jaitley said on Wednesday.
According to various reports, the health care sector in India is expected reach $150 billion in 2017, from $80 billion in 2012.