Impact of Make in India on Medical device Industry
This article shows how Make in India initiative is going to make an impact on an underpenetrated Indian medtech sector. Alongside will be discussed few concerns which may arise during successful implementation of this initiative and their probable solutions.
Introduction: Mahatma Gandhi once said, "it is health that is the real wealth and not pieces of gold and silver". Knowing Narendra Modi's love for Gandhiji and his ideals, it is only fitting that he focusses on healthcare of the nation. And he did. The Prime Minister of India recently announced "Make in India" campaign that allows 100% FDI in the medical devices industry. The campaign was launched in order strengthen the Indian medical devices manufacturing sector.
The Indian government through this initiative will provide 100% FDI for Greenfield operations (setting up new manufacturing facility) under automatic route and 100% FDI for Brownfield operations (acquisitions) via the Foreign Investment Promotion Board (FIPB). For the Medtech companies, the initiative means that they would no longer need to go through the tedious process of FIPB for infusion of funds in this sector for setting up a new plant. The campaign is expected to attract global companies to set up manufacturing base in India which will in turn build up the components ecosystem and enhance the manufacturing capabilities.
Thanks to the PM's announcement for Make in India, the impact of this campaign was so direct and instantaneous that shares of Opto circuits(India) rose to nearly 16% whereas Siemens India rose by 2.2%. Globally Medical device industry is pegged at 330 Billion USD (2013) which is growing at a CAGR of 6%P.A whereas Indian market is now approximately 4 Billion USD and likely to reach 12 Billion USD by 2023 provided it receives ample support from the government and greater clarity in terms of policies and regulations.
Author: Deepan Nandi
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