The ‘Make in India’ campaign of Prime Minister Narendra Modi’ government has given a new confidence and hope among the medical device manufactures, as the move is expected to encourage local mirco small and medium enterprises (MSME) to venture in to this sector. The segment of electro medical device industry can now attract more investments and it is expected to grow 50 billion dollars by 2025 in the country.
Thanks to central government’s latest move to allow 100 per cent foreign direct investment (FDI) in the medical devices segment, according to Sanjay Banerjee, Chairman of India working group for Advanced Medical Technology Association (AdvaMed), this decision is going to give a new boost to the nascent industry in the country. At present the medical devices industry in India accounts to only 6 per cent of the entire healthcare industry. “It is a fact that more than 50 per cent of medical devices in India are imported from USA, Germany and other European countries, while the other half of our requirements are fulfilled by the domestic players. But we are far behind to catch up with the western players in terms of quality, and lack large scale equipment manufacture needed for research in the pharma and biotechnology or for advanced diagnostics,” Sanjay.
India is already housing world’s leading medical equipment suppliers and manufacturing companies like Johnson & Johnson (J&), GE, and Boston Consultants which have not only established manufacturing facilities in the country but have also invested a lot in research and development an innovation in the country. With the move to allow more FDI, the domestic and foreign players may explore unexplored areas of the medical devices sector. “To allow more investor the government should also need to strengthen the IPR law so that it may encourage innovators and researchers to invest more into the country,” says Sanjay.
In general the MSME sector in India is diverse in terms of its size, levels of technology employed and range of products and services produced. MSMEs have shown constant growth rate of over 10 per cent in recent years much ahead of the large-scale corporate sector. With the ‘Make in India’ campaign by the government, more new entrepreneurs are encouraged to venture in to this segment.
The entire MSME sector contributes 8 per cent of the country’s GDP, 45 per cent of the manufactured output and 40 per cent of its exports. The MSMEs provide employment to over 80 million persons through over 36 million enterprises producing over six thousand products.
India is one amongst very few countries which has a legal framework for the MSME Sector in the form of MSMED Act 2006 which has established provisions under which issues like public procurement and delayed payments are addressed.
“Make in India campaign can attract the foreign MNCs to bring in their investment, set up venture/angel funds to take advantage of the inherent depth of the MSME Sector in terms of range of products and services, marketing networks and the ability to grow fast,” opined Banerjee.
Overall 'Make in India' campaign is not only going to get Indian companies but also attract global firms to invest and partner in the manufacturing sector is a well drawn out concept and is the most relevant for India’s MSMEs.