The government plans to set up two medical devices parks in southern India to facilitate the sector's growth, which is currently at a nascent stage. The government has identified 400 acres of land near Chennai and another 100 at Hyderabad for the same. There are 800 units in the medical devices sector scattered across the country.
"The industry needs a distinct identity and a dedicated park will help realise that identity. A park will integrate various aspects related to the industry such as R&D (research and development), training, skill development, testing and certification. We need to organise all these at one location for an efficient growth of the sector," said an official in the Department of Pharmaceuticals.
In Hyderabad, Union government-owned drug maker Indian Drugs and Pharmaceuticals has a surplus land of 500 acres. "The government plans to develop a pharmaceuticals park there, of which 100 acres will be dedicated to medical devices," he added. A Cabinet approval is required for the same.
The domestic medical devices market is estimated at $6.8 billion, but only one-third of it is locally manufactured. India also exports medical devices worth nearly $1 billion.
The government recently made the Department of Pharmaceuticals the nodal body for the medical devices sector. Regulatory issues will, however, continue to fall under the health ministry, and exports and imports will be governed by the commerce ministry.
The government clarified recently it has no plan to regulate the prices of medical devices like it does for a number of medicines. It is planning to formulate a comprehensive policy to fuel the sector's growth.
Last December, the government permitted 100 per cent foreign direct investment under automatic route for new projects in the medical devices sector. 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.
A report by the Confederation of Indian Industry and the Boston Consulting Group titled 'Medical Technology: Vision 2025', released in August, said several medical devices players such as GE, Polymed, BD and Terumo Penpol had increased investments in India and were seeing strong business results.
However, for further growth, the government needs to spend more on healthcare, introduce single-window regulation for manufacturing of medical devices, and provide incentives such as tax holidays and soft loans.