Boost Medical Technology Manufacturing to achieve "Make in India" : CII to DOP

New Delhi, August 10, 2015:  The Confederation of Indian Industry (CII), has submitted several key recommendations to the Department of Pharmaceuticals (DoP) with regards to the infrastructure support required to boost manufacturing in the medical technology sector in line with the Government’s “Make in India” mission.

Regarding implementation of the Preferential Market Access (PMA) Policy in medical equipment and device, the industry members recommended promoting the components and ancillary industry without which “Making in India” is not possible in this technology-driven sector.

The Chairman of CII Medical Technology Department, Mr Himanshu Baid, said “Without the availability of indigenous components, the PMA policy will not yield any results, as already seen in the electronics and IT hardware sector since the last four years. Before the implementation of PMA policy in medical devices and equipment sector, there is a need to properly analyze the components manufacturing capabilities in India.”

CII has emphasized the importance of recognizing the fact that the manufactur­ing business case in India is quite challenging. While the labour costs are lower in the country, the capital investment and productivity of the labour are critical lim­iting factors to the manufacturing business case. Combined with approval delays, this makes the manufacturing environment quite challenging for entrepreneurs.
“Ac­cess to low-cost capital through soft loans, subsidized land, and assured power & water supply combined with tax incentives and single-window clearance, would certainly build a stronger business case in India,” said Mr Pavan Choudary, Co-Chairman, CII Medical Technology Department.

Recommendations:

• Attracting big global medical technology companies to India will help cre­ate a base which will then build up the com­ponents ecosystem.


• This, in turn, will en­hance local capabilities, enable Indian companies to get access to compo­nents and greatly enhance the local manu­facturing capability.


• Once the ancillary industry is established, there will be significant value addition in finished medical equipment and device.


• To begin with, only MSME / SME industry components can be given preference in the PMA policy.


• The process of setting up manu­facturing facilities needs to be streamlined by designating medical technology hubs all over the country with the right infrastructure in place to support complex medical technology manufacturing.


• Establish medical technology hubs in each zone (north, suth, east and west).


• Manufacturing incentives like tax support and low-cost funding (5% lower rate than the bank lending rates) to spur investments and make the busi­ness case attractive.


• Concessional power tariff in manufacturing hubs.


• Subsidised land prices for setting up medical devices industry in medical technology hubs.


• Inverted duty structure should be corrected. Customs import duty on raw materials should be lower than finished goods.


• 4% Exports Incentives for the sector should be given.


• The three year market standing required for new manufacturing units to participate in Government tenders should be done away with

India is already a large producer of disposables and consumables in India, and export incentives are available for some products. CII has emphasised the need for further capacity building in this segment and focus on quality enhancement for further reduction in imports. The industry needs to get exposed to the learnings of evolving quality standards from countries which have had a head-start in innovations in this space. This will help improve the overall quality standards in India.

There are several misconceptions being spread about the medical technology industry amongst stakeholders. Therefore, it is important to build a positive environment which makes a business case and opens doors for investors to start manufacturing in this sector, thus paving the way for the ‘Make in India’ initiative.