BackCabinet approves 100% FDI for medical devices sector
At present, the medical devices sector falls under the pharmaceutical category and is accordingly subjected to FDI limits and other conditions
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New Delhi: The Union cabinet on Wednesday approved 100% foreign direct investment (FDI) in companies manufacturing medical devices. Currently, the sale of medical devices in India are covered under the Drugs and Cosmetics Act (DCA).
The proposal to relax the policy has been mooted by the commerce and industry ministry. Since medical devices fell under the pharmaceutical category, so far, they were subjected to FDI limits and other conditions such as mandatory government nods under DCA.
Currently, India imports at least 70% of medical devices used in the country. As part of the Make in India campaign, the government has relaxed the policy hoping to attract investments and boost domestic manufacturing. Local manufacturers are concerned about the misuse of the relaxation in FDI rules.
“Foreign companies could just set up local subsidiaries and continue importing. Hardly 50 manufacturers are there in India with over ₹ 50 crore turnover in medical devices. By making 100% auto approval for brown field investment, these battered surviving Indian manufacturers would be easy picking for MNCs; what is more important in making manufacturing viable in India so that even Indian investors can invest in their field," said Rajiv Nath, forum co-ordinator, The Association of Indian Medical Device Industry, an industry body.
Stressing on the need for greater FDI in medical devices and equipment sectors, the industry body said there is no threat of mergers and acquisitions from multi-national firms as domestic companies are not big, unlike the drug firms.
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