Market Insights
Medical Device Industry in India
Overview
Over the past decades, the Indian medical device industry has seen tremendous growth. The government introduced various reforms to improve the medical device industry in India by regulating it and also made necessary changes in the FDI policy to attract foreign companies as India still remains an import dependent for most of the diagnostic devices.
The Medical Device Industry in India is segmented as;
- Consumables
- Dental Products
- Diagonstic Imaging
- Orthopaedics & Prosthetics
- IV Diagnostic
- Patient Aids
- Others
Medical Device Market Size in India
India ranks 4th in Asia and among the top-20 globally for the medical device market. The Overall size of the medical device industry in India was valued at INR 780 billion in 2020 and it is expected to reach INR 3,550 billion by 2025 with a CAGR of 35.4%.
In 2020, the major portion of the market was occupied by Diagnostic imaging devices holding almost 30%. Consumables and IV(Intravenous) diagnostic devices accounted for 16% and 10% respectively. Medical devices such as Patient aids, Orthopaedic & Prosthetics and Dental products accounted for less than 10% of the overall market.
Competitive Landscape
India imports around 75% to 80% of medical equipment, especially diagnostic devices to detect cancer, medical imaging and other high precision devices to meet the demand of the country. Some of the major foreign players are; GE Healthcare India, Philips India, Siemens, Abbott, Johnson & Johnson and Thermo Fisher Scientific. However, there are some domestic manufacturers such as TransAsia Biomedical limited, Trivitron Healthcare, Polymed medical device, Hindustan syringes & medical devices and Meril Lifescience that focus on low-cost and high volume products especially in consumables and disposables segments.
Growth Drivers for Indian Medical Device Industry
Favourable Government Initiatives & Policy
Medical device industry in India is still at the nascent stage and some notable initiatives introduced by the Indian government are;
- 100% FDI to attract foreign investments in the field of medical devices manufacturing
- Made in India initiative to boost manufacturing within the country
- Incentives for foreign companies seeking to exit China
- Production Linked Incentive Scheme provides financial incentives for domestic manufacturing of medical devices
Medical Device Parks
As a part of Make In India initiative, medical parks are being set up in various cities with all the necessary infrastructure facilities where the companies can efficiently manufacture medical equipment.
Increasing Population
According to the World Bank, India’s population is growing at a rate of 1% annually and this may drive demand for healthcare services which in turn may increase the demand for medical devices.
Medical Tourism
India attracts medical tourists around the world because of the quality of the medical services provided and low cost when compared to other countries and this increasing inflow of medical tourists will create a demand for high quality medical devices.
Challenges for Indian Medical Device Industry
Healthcare Infrastructure
India’s healthcare expenditure is 1.26% of the total GDP of the country and this is lowest when compared to other countries, also there is a lack of healthcare facilities such as limited number of hospitals, emergency lifesaving medical equipment, weak medical infrastructure and restricted access to healthcare.
Financing Cost
Manufacturing of medical devices involves a high production cost. In the absence of government incentives this may create a financial burden to the manufacturers.
Government Regulation
Medical device regulations do not apply for all product categories and this makes it difficult for some MNCs of regulated medical diagnostic devices to import or manufacture their devices in India.
Impact of Covid-19 on Indian Medical Device Industry
The Medical Device Industry in India suffered a blow in the year 2020 because of the Covid19 crisis. Country-wide lockdown has affected the overall supply chain of raw materials, logistics, production and imports of medical devices. According to the Medical Technology Association of India, the total revenue of the medical technology industry fell by 85% in 2020. It added, Orthopaedic segment was majorly affected with revenues falling by 85% while the revenue of Ophthalmology sector declined by 75% and Cardiology sector’s revenue fell by 60%.
Future Outlook
The medical device industry in India was greatly affected by the coronavirus pandemic in 2020, however as per IKON’s estimates the industry will return to pre-covid levels by the second half of 2021. With the government’s continuous support and offered financial incentives, there are increasing opportunities for new entrants into the Indian market.