The move is expected to drive foreign investment in the fast growing medical devices sector, which is projected to grow from 3.9 billion in 2015 to $50 billion by 2025.
In a bid to attract more foreign investors to the promising sector of medical devices, the union government will amend the definition of Medical Devices as contained in India’s foreign direct investment (FDI) policy thus removing the restricts on the scope of ‘medical devices’ to what is defined in the Drugs and Cosmetics Act, 1940.
“As the definition as contained in the policy is complete in itself, it has been decided to drop the reference to Drugs and Cosmetics Act from FDI policy. Further, it has also been decided to amend the definition of ‘medical devices’ as contained in the FDI Policy,” the government said in a statement.
The move would allow 100 per cent foreign investment in several technologies, products and services that were earlier considered under the broad definition of medical devices in the Drugs and Cosmetics Act.
According to the Cabinet decision, “any product or software that will assist diagnosis, monitoring, treatment, alleviation of, or assistance for, any injury or handicap, investigation, replacement or modification or support of the anatomy or a physiological process, supporting or sustaining life; disinfection of medical devices, control of conception and which does not achieve its primary intended action in or on the human body or animals by any pharmacological or immunological or metabolic means, but which may be assisted in its intended function by such means will now be considered as medical device irrespective of its status in the eyes of the drug regulator”.
As per the Sector Survey of Medical Devices under ‘Make in India’, the medical devices industry in India is presently valued at $5.2 billion and contributes 4-5 per cent to the $96.7 billion Indian Healthcare Industry. Currently, India has about 750–800 medical device manufacturers in the country, with an average investment of Rs 170–200 million and an average turnover of Rs 450–500 million.
Globally, medical devices are segregated into six major segments, out of which diagnostics imaging constitutes the largest chunk (from a global perspective), with an annual sales estimate of $60 billion in 2015. Next in line is IV Diagnostics, with an estimated 24 per cent share.
The global medical devices industry was estimated at $228 billion in 2015. At its current growth trajectory, the market is expected to reach $332 billion by 2020.
