Business

India's Med-Tech Exports Could Hit $20 Billion by 2030, but Industry Calls for Government Support: CII

"Currently, India imports 60-70% of its medical equipment needs, with domestic manufacturing accounting for just 30%," said Himanshu Baid, Chairman of CII’s National Medical Technology Forum.

• By Newsdesk
• New Delhi
• Nov 29, 2024

Business

India's medical technology sector has the potential to achieve exports worth $20 billion by 2030, but this growth depends heavily on increased government support and policy enhancements, according to the Confederation of Indian Industry (CII).

Himanshu Baid, Chairman of CII’s National Medical Technology Forum, highlighted the need to expand the production-linked incentive (PLI) scheme beyond select devices to include a wider range of products. He also emphasized the importance of export incentives to offset "hidden costs" faced by manufacturers.

"Currently, India imports 60-70% of its medical equipment needs, with domestic manufacturing accounting for just 30%," Baid noted. "Our imports stand at approximately $8 billion, while exports are only around $4 billion. This gap highlights the untapped potential of the industry."

Opportunity Amid Global Shifts

India is well-positioned to leverage global trends such as the "China plus one" strategy, which encourages diversification of supply chains away from China. Baid cited India's competitive advantages, including skilled talent, expertise in software and hardware, and lower labor costs, as key factors that could boost the country's med-tech industry.

"My projection is that by 2030, India's exports could reach $15 billion to $20 billion, while imports might decrease to $3 billion to $4 billion," he said.

Challenges and Policy Recommendations

However, Baid stressed the need for regulatory reforms and improved business ease to unlock this potential. He pointed out that the industry, currently regulated under the Drugs and Cosmetics Act, requires a dedicated regulatory framework.

"Medical devices are complex, combining electronic, mechanical, and plastic components, which makes them fundamentally different from pharmaceuticals. A separate regulator for the med-tech sector is essential," Baid said.

He also called for changes to quality control orders (QCOs) that mandate suppliers of raw materials to register with the Bureau of Indian Standards (BIS), a process that has hindered local manufacturing. "Small raw material suppliers often lack the resources to comply with BIS registration, creating roadblocks for domestic production," Baid explained, urging exemptions for the med-tech sector.

Expanding the Scope of Incentives

Baid proposed extending the PLI scheme to a broader range of products. "Currently, only 28 companies are part of the scheme, with a budget of ₹3,400 crore, of which only 10-20% has been utilized. The government should use the surplus funds to support more manufacturers and increase exports," he stated.

Additionally, he suggested increasing duty remission rates under the RoDTEP scheme from the current 0.5-0.7% to 2-2.5% to help offset hidden manufacturing costs. "Such incentives would make Indian products more competitive globally," Baid added.

Infrastructure Improvements

Addressing logistical challenges, Baid called for enhancements to India’s export infrastructure. "Shipping delays of two to three weeks in India contrast sharply with China’s two to three days. Improving this is critical for global competitiveness," he said.

With supportive policies, Baid believes India can strengthen its domestic manufacturing capabilities and position itself as a global leader in medical technology. "This is a transformative opportunity for the industry, and we must act decisively to seize it," he concluded.