Govt Seeks 40-45% Domestic Value Addition in Medical Devices, Eyes More Component Manufacturing

The government is also open to suggestions from the industry to address issues faced by companies that had made investments under PLI (production linked incentives) scheme for medical devices but could not claim incentives for any reason, in order to encourage local manufacturing in India, Joshi said while addressing CII Global MedTech Summit here.

"In the last five-seven years, a lot of imports have shifted to assembly in the country," he said.

Although some of the components are produced in India, Joshi said, "Some of the factories which you see are plain assembly line operations."

While data shows that imports of medical devices are not growing up, he said a reason for that could be that "how we classify components as medical devices or otherwise".

The government would like to see more domestic value addition over a period of time, he said, adding, "We would like to incentivise from the government side... more component manufacturing... more domestic value addition to take place in India."

"Those who started with very low domestic value addition, we would like them to go to 40-45 per cent value addition. That is what we would like to incentivise," he said.

The government would like to incentivise component makers in a large way, much more incentive for component makers than the assembly operations, Joshi noted.

Referring to the PLI scheme for medical devices, he said the government is taking learnings from it with the realisation that "we need to keep doing it" in order to promote local manufacturing of medical devices.

A large number of people invested, but only few are getting incentives, Joshi acknowledged.

For those who could meet the benchmark for investment or sales, but could not claim incentives due to other reasons, he said, "How do we address it for the present people? Do we give a longer time frame and extend the existing scheme so that the people who are already invested and are not claiming PLI, can they be enabled to do that?"

He further said, "We are looking at it. Any inputs would be welcome."

Under the PLI Scheme for Promoting Domestic Manufacturing of Medical Devices with total financial outlay of Rs 3,420 crore and production tenure from FY23 to FY27, incentives were provided to selected companies at the rate of 5 per cent on incremental sales of medical devices manufactured in India and covered under the four target segments of the scheme, for a period of five years.

Joshi also stressed on the need for more testing of products, whether prototype or commercially made products, saying it is "not really happening much in our system"