Domestic medical devices industry is set to receive a booster dose as central government lays out plan to incentivise Indian players with at least ₹3,420 crore, over a period of five years. This incentive would be provided if they were to invest in their set-ups to produce key medical devices.

Officials in Department of Pharmaceuticals (DoP) said that the domestic manufacturing for cancer care and radiotherapy medical devices, radiology and imaging medical devices, anaesthetics and cardio-respiratory medical devices including catheters of this category meant for the heart and, renal care medical devices meant for kidneys, all implants including implantable electronic devices like cochlear implants meant for those with hearing impairment and pacemakers for the heart, will be given priority.

DoP ina notification proposed to pay a production linked incentive (PLI) of five per cent on incremental sales (over base year of 2019-20) of goods manufactured in India covered under target segments to eligible companies for a period of five years (2020-21 to 2025-26).

The notification states that on incremental investment of ₹180 crore over three years, with at least cumulative minimum ₹60 crore investment in first year. And then ₹120 crore in second year and eventual incremental sales of manufactured goods, say for instance, which are ₹120 crore in first year, reaching to ₹240 crore in the second, ₹360 crore in third year, ₹460 crore in the fourth year, reaching up to ₹560 crores in five years. DoP has proposed to dole out through reimbursements, an incentive of five per cent each year on that year’s incremental sales to the medical device companies.

According to data compiled by DoP, India’s medical device market stood at ₹50,026 crore for 2018-19 and is skewed in the favour imports which were to the tune of ₹43,365 crore, while exports were ₹16,300 crore. While both exports and imports grew at 25. 2 and 23.8 per cent as compared to 2017-19, and it is expected to touch ₹86,840 crore in 2021-22, officials said that there is a lack of level playing field in India versus the competing economies.

“India’s share is 1.6 per cent in global market, and it is among the top 20 medical devices market in Asia, and comes after Japan, China, South Korea. Still, Indian industry depends on imports up to an extent of 86 per cent and PLI scheme for medical devices is a financial incentive to boost domestic manufacturing and attract large investments in medical devices sector,” said a DoP official.

“Lack of adequate infrastructure, domestic supply chains, logistics, high cost of finance, limited availability of quality power supply, limited design capabilities, low focus on R&D, and skill development are the main roadblocks,” the official explained.

DOP would appoint a nodal agency to act as a Project Management Agency for appraising of applications and verification of eligibility of the company for support under the scheme. An empowered committee consisting of Secretaries of Pharmaceuticals, Commerce, DPIIT, Health and Director General of Foreign Trade will then consider the applications for approval and conduct periodic reviews of eligible companies.

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