MedTech Sector To Reach $20 Billion By FY27 With Government’s New Scheme

The Indian MedTech sector is poised for remarkable growth and is projected to leap from $14 billion to $20 billion by FY27 owing to a new governmental initiative aimed at promoting domestic production. The government scheme has an outlay of ₹500 crores over three years, which boosts some local manufacturers of medical devices and other raw materials to be produced within India. It is expected to enhance India's competitive advantage, reduce reliance on imports, and lower the costs of medical devices.

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Key Benefits

The govt scheme extends beyond the Performance Link Incentive (PLI) to small, medium, and micro enterprises, providing comprehensive assistance in medical technology.

Support for Domestic Manufacturers: The scheme aims to encourage Indian manufacturers to manufacture both end products and raw materials locally, thereby minimising their reliance on imports.

Greater Opportunities for Small Enterprises: This government scheme encourages small enterprises to be able to compete on a global scale, unlike the PLI, which solely benefitted multinationals, especially large ones.

Backward Integration: The scheme facilitates the creation of a more robust supply chain management through local sourcing of components, thus helping manufacturers to address existing challenges.

Focus Areas

The scheme focuses on five specific areas to foster growth and bolster the MedTech sector. Each of the areas addresses a specific issue that exists among the manufacturers.

1. Infrastructure Development: Support existing manufacturing facilities’ productive capabilities.

2. Reducing Import Dependence: Incentivise the indigenous manufacture of significant parts to reduce the current 70% dependency on consumable imports.

3. Capacity Building and Skill Development: Develop professionals to supply the required technical manpower to the MedTech industry.

4. Support for Clinical Studies: Assist in financing and other activities needed for clinical research and trials to develop medical device innovation.

5. Industry Promotion: Facilitate the marketing of Indian medical devices overseas and undertake important market research.

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Expected Impact On The Sector

The significant positive impact of this government scheme on the MedTech sector in India are mentioned below, let us have a look at them.

• Cost Reduction for Medical Devices: By increasing local production, we expect a 5-7% cost drop for medical devices, making them more affordable for hospitals and patients.

• Long-Term Contracts for Manufacturers: Domestic manufacturers can now enter long-term agreements with buyers, such as hospitals and government agencies, ensuring price stability and supply chain reliability.

• Expansion to Global Markets: Domestic manufacturers will also be able to gain access to new foreign markets, thus positioning India better globally in the MedTech industry.

Expert Opinions

Industry experts have welcomed the Sarkari scheme, calling it a game changer. Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD), stated:

“This scheme will enable local manufacturers to compete with imported products, ensuring long-term growth and stability for the sector.”

Pavan Choudary, Chairman of the Medical Technology Association of India (MTaI), added:

“The promotion stimulus will allow India’s MedTech sector to market itself globally and attract investments.”

Conclusion

The government's new policy for the MedTech industry aims to enhance the sector by enhancing domestic capabilities, reducing costs, and creating opportunities for small and medium enterprises. With targeted measures, this endeavour will not only bolster India’s position on the global map but also provide millions with inexpensive healthcare options.

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