A level playing field is important for domestic medical device manufacturers in India to compete with multinational companies, which have strong financial and technological capabilities, says GlobalData, a leading data and analytics company.
In a bid to support domestic manufacturers and generate funds to create health infrastructure, India has recently proposed an additional 5% health cess on imports of medical devices.
Rohit Anand, Medical Devices Analyst at GlobalData, comments: “Since India is a net importer of medical devices, additional taxes may discourage large multinationals to import newer technologies and increased cost of devices is likely to be passed on to the patients. This will limit patient access to advanced treatment options available in developed countries and may lead to an increased treatment cost.”
GlobalData’s research reveals that the Indian medical devices market, which accounted for more than 13% of the Asia-Pacific medical devices market in 2019, is expected to grow at a compound annual growth rate (CAGR) of 7.5% through 2025.
Currently, over 800 domestic medical device manufacturers are involved in the manufacturing of medical devices, including consumables, disposables and capital equipment. However, a large number of them are in the small scale sector and they do not have access to newer technologies. Although the Indian government, under ‘Make in India’ initiative, is encouraging medical devices manufacturing and exports, importing medical devices is still considered as a convenient option.
Anand concludes: “The local medical device makers are predominantly involved in the manufacturing of low-end products for domestic consumption. The Indian government should therefore encourage multinationals to partner with domestic manufacturers by providing incentives and tax rebates. Improved tax structure can be another option to encourage domestic medical device industry.”