According to the US-India Business Council (USIBC), the Indian Medical Devices Industry faces a great potential to hit USD 7 billion by 2016. It undergoes a rapid transformation and is projected to grow at a higher rate than the Health Insurance Industry. What drives this rapid development with a growth rate of 15% annually?
Besides a wide range of more than 14000 product types, electronics and information communication technology play a decisive role to process information on anatomy and physiology. Reasons for the sustained growth of this industry are to be found on one hand in financial factors, such as higher incomes, increasing public spending as well as private investments. Furthermore, the stronger market penetration of health insurance and models of healthcare delivery on the rise as well as public private partnership drive the growth. At the same time, the number of hospitals rises and thereby, the demand for sophisticated devices and equipment.
But the domestic market fails to satisfy the demand and is unable to raise the required investments to put up the capital the sector needs. Therefore, the Indian Government decided to ease business and liberalise the market for foreign investments. Under the maxim “Make in India” the government previously permitted 100% FDI to raise the sector’s poor investment flow and thereby spur the domestic growth. For medical device companies approved in either US, Japan, Europe or Australia follows that they are able to sell legally in India. For companies without a branch office in India, an importer with a valid import license is required and should be selected with the help of a consultant. Examples of international companies setting up facilities of their own or by acquiring manufacturers are 3 M’s manufacturing plant in Pune, Becton Dickinson’s manufacturing facility in India, or Philips Medical Systems’ acquisition of Medtronics and Alpha X-Ray Technologies, all belonging to the leading medical device and medical electronics companies in India.
The Indian government’s efforts towards creating the proper ecosystem for medical device innovation in order to attract investment and talent, led to an increase in domestic manufacturing of medical equipment over the last five years. With the help of FDI inflow R&D and manufacturing innovations get spurred and India will be seen as a manufacturing destination for sophisticated medical technology in future.
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