Budget may bolster manufacturing of medical devices

The scheme aims to establish 15-16 medical device production clusters and labs for testing such devices, the people said, requesting anonymity.

The proposed scheme is expected to complement the production-linked incentive (PLI) scheme for medical devices, which is being implemented by the government.

The medical device industry is highly capital-intensive and requires long gestation periods for developing and adopting new technologies. Most innovative products come from a well-developed ecosystem, which still needs to be built in India. The local industry relies on imports for up to 86% of its needs. “We already have a PLI scheme for medical devices and medical device parks. We don’t have any small cluster scheme to support medical devices clusters. We are planning two things—one, a medical device cluster scheme, which we plan to support around 15-16 clusters with ₹20-25 crore per cluster for common infrastructure. And, two, there is a major requirement for medical device testing labs. So, we have proposed dedicated laboratories to test medical devices," one of the officials cited above said.

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The common infrastructure in the cluster will provide manufacturers with access to testing and certification facilities, vendors, raw material suppliers, supply chain professionals, transportation and logistics, design and printing for medical grade products, packaging, solid waste management, and an emergency response centre, all under one roof.

By sharing infrastructure, businesses in a cluster can save costs. A cluster also provides manufacturers easy access to suppliers, raw materials and skilled labour, and can even encourage innovation.

“For this budget, we want to give special focus to the medtech sector for the medical device industry," said another official aware of the development. So, we have proposed a small cluster scheme to support the medical devices industry, the person said.

Queries sent to the spokesperson for the department of pharmaceuticals remained unanswered.

Currently, the department has approved the domestic manufacturing of medical devices, including for cancer care, radiology, nuclear medicine, renal care and cardio-respiratory implants (e.g. heart valves, stents, catheters, and occluders), hip implants, and knee implants under the PLI scheme.

Industry executives termed the proposal to set up clusters a welcome move. Jatin Mahajan, managing director of J Mitra and Co. Pvt. Ltd, said, “It is a good move by the government to come up with the cluster scheme for medical devices, but they should involve the MSME (micro, small and medium enterprises) sector. If the government wants to percolate the scheme to the bottom level, they have to understand several points so that the medical device sector can grow holistically. The sector has started to grow because of government support, but it still needs more push."

Talking about in vitro diagnostics (IVD), Mahajan said: “There should be dedicated IVD parks (on lines of medtech parks and IT parks) to provide end-to-end solutions, specifically for the IVD industry. This typically does not require as much investment and infrastructure as necessary for medtech and is thus easier and more cost-effective to set up and manage."

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