#4 Reasons why India is the Next Big Destination for Medical Equipment Manufacturing
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India is home to a number of Non Communicable Diseases (NCDs), including diabetes, cancer and cardiovascular diseases. These contribute to over 60% of the overall disease burden in the country, adding to the impact of communicable diseases like TB and leprosy. If not addressed urgently, experts predict that over 60 million Indians will succumb to NCDs by 2020.
Healthy Growth of Medical Devices Industry
There is a dire need for the Indian population to have access to quality medical equipment and devices to provide timely treatment and improve quality of life. Innovations in medical procedures are giving rise to demand for new medical devices with high level performance, and the Indian market is facilitating an environment for the healthy growth of the medical devices industry. Thanks to advancement in technology, healthcare can now be made more affordable, accessible and available to a large part of the population.
India as a Manufacturing Destination
India is beginning to look forward to being recognized as a manufacturing destination for sophisticated medical technology. The medical devices and equipment industry, valued at US$ 2.5 billion, contributes 6% of India’s US$-40-billion healthcare sector. It is growing at a faster annual rate of 15% compared to the 10-12% growth of the healthcare sector in its entirety. The Indian medical devices sector is Asia’s fourth largest market and presents an exciting business opportunity for both domestic and multi-national players.
65% of Medical Devices in India are Imported
Currently, nearly 65% of medical devices in India are imported. Realizing that this will be difficult to sustain in the coming years, the government of India is actively trying to reduce burdens for local device manufacturers through flexible legislations and policies, such as 100% FDI for medical device manufacturing and higher import duties.
India is becoming more and more lucrative as an investment & manufacturing destination for medical devices and equipment. It has the underpinnings to become a major consumer of medical devices and the potential to become a major medical device exporter to countries worldwide. Improvement in health care services for Indian patients will facilitate the treatment of more patients in India, making it even more attractive for investors in the medical technology sector.
Here’s why India is pegged to be the next big MedTech equipment manufacturer in the world:
Technology & Product Innovation: With the advent of newer technologies, medical equipment is increasingly relied upon to assist healthcare professionals with diagnosis and treatment. Improvement in health care services for patients will facilitate the treatment of more patients in India, making it even more attractive for investors in the medical technology sector.
Hub for Medical Tourism: India is being promoted as a hub for medical tourism, due to which international organisations are recognising the potential value of the Indian diagnostics market. In fact, the diagnostic market is the fastest growing segment of India's healthcare industry, according to a report by PricewaterhouseCoopers (PwC), with the segment forecasted to grow to US$ 17 billion by 2021.
Increased competition: By 2025, India is expected to need as many as 1.75 million additional beds, of which the public sector is expected to contribute only 15%-20%. This signifies the entry of more private players in the healthcare delivery space, introducing healthy competition for existing public and private players.
Government Initiatives: The 100 % FDI for medical devices will enhance local capabilities and help local companies build their access to components, and greatly enhance the manufacturing capability. Moreover, the reduction of tax on royalty payable and fees for technical services from 25%to 10% to facilitate technology inflow will facilitate sourcing foreign technology, which, in turn, will enable price stabilization in most of the device segments.
The Road Ahead
Though, India is already on the right track, it still has a lot to learn from established medical technology manufacturing hubs such as Ireland and China. Low corporate tax rates, lenient regulatory requirements and fast approval times are some learnings that India needs to incorporate to incentivize research and development of medical devices in the country.