With the mushrooming of clinical and contract research laboratories across the country, the analytical instruments market is growing high. Demands for more specialised, better quality products from foreign and domestic instrument manufacturers have also contributed for this drive.
The clinical and contract research industry in India will see establishment of another almost 100 new research laboratories in the next four years, focusing on bio analysis/bio equivalent studies. Around 40 to 50 laboratories are expected to come up in the western part of India during these four years, while about 15 to 20 labs would be established in North. The southern part of the country will witness introduction of 20 to 25 new labs, while around 10 labs will be set up in the East. Each of these labs will be set up with an investment of around Rs 10 crore to Rs 50 crore, said Dr Ashes Ganguly, vice president of Indian Analytical Instruments Association (IAIA) and director of Cryogen Instruments India Pvt Ltd, Maharashtra.
At a time when the clinical research segment in India is growing at a rate of 25 to 30 per cent per year, the emergence of new laboratories will create demand for 15,000 to 20,000 analytical chemists and analytical scientists in the near future. The pharmaceutical analytical instruments market, which already accounts 35 per cent of the total analytical instruments market, is recording an overall growth of Rs 750 crore to Rs 800 crore in pharmaceutical, clinical and contract research market.
Global players like Thermo Fisher Scientific, Waters Corporation, PerkinElmer, Shimadzu Scientific Instruments, Varian Medical Systems, Agilent Technologies and Dioner are very much active in the Indian market. In an attempt to grab a major chunk of the Indian market that amounts around Rs 2500 to Rs 3000 crore, the top 10 to 20 international companies have already set up their subsidiaries or joint ventures in India.
When compared to the presence of multinational analytical instruments manufacturers, the Indian companies have only a namesake presence in the field. The Indian companies occupy not more than 10 to 15 per cent of the Rs 3000 crore domestic market. Also, the country's import-export ratio is at 85:15, speaking volumes for the meagre Indian presence in the analytical instruments market. Lack of ability to invest and provide higher end products and services and lower component levels are the major factors that makes Indian companies lag behind its foreign counterparts.
The profitability of the Indian companies still remain unchanged because of the increased market size. But the domestic players are finding it difficult to win over the new arenas, largely due to its inability to update products and services on an equal footing with global standards. "Domestic companies should come out to invest more money for upgradation of product standards on par with global standards. "Though some domestic companies are currently addressing the ancillary and software markets, the hardware and instrumentation markets are yet to be taken care of," said Ganguly.
In order to better the status of Indian players in the analytical instrument segment, IAIA is seeking intense support from the government through various kinds of appreciations and tax exemptions. The Government of India, through its scientific arms like Department of Science and Technology, is vigilant in supporting various industries, but has not yet addressed the problems of analytical industry players in the country, noted members of IAIA. "Till now, the government rules have not really provided any telling effect on the analytical instruments industry," according to the spokesperson.
In an attempt to boost the domestic players, the IAIA has demanded the government to take more entrepreneurs into confidence to enable the industry to come out with more investments across the value chain of the segment. It includes offering of tax sops and exemptions like relaxation of excise duty and Value Added Tax (VAT) to make the domestic product cheaper than the imported one.
In addition to this, the IAIA has called for special representation for the domestic players that come under the association in any government bid for the public health system. The strategic committee of the association is pursuing the matter with the concerned department for a favourable decision.
The Indian manufacturers should also take initiatives to comply with global standards to compete globally. For this, the industry has to invest heavily on infrastructure and quality maintaining machinery. Such a planned move will help the domestic companies to grab the emerging analytical instruments industry market in India and globally, said Ganguly.