Union government has commenced its efforts to invite overseas players in medical devices sector to set up joint ventures in India. Medical technology companies in India are now working with the government and healthcare providers to expand in this untapped market under the public private partnership model.

These companies can have access to a private equity funding of US$ 64 million from Investor Growth Capital which is the wholly owned venture capital arm of Investor AB (Investor).

The domestic production of medical devices is limited. Imported medical devices are expensive and unaffordable for poor patients. In such a scenario, the key drivers of the medical devices space are profusion of private hospitals, awareness on healthcare, improved healthcare infrastructure and increased disease profile.

In India, almost 65 per cent of the medical devices are imported. Although the government of India has announced tax holidays for R&D companies and a favourable profit repatriation policies, it is still working to finalize the setting up of a regulatory authority to stop the import of unreliable medical devices only to encourage manufacture of standard equipment in the country. The effort to encourage joint ventures opens up opportunities in the India medical devices space, stated Anjan Bose, vice president and head, professional & public affairs Philips Electronics India and co-chairman, Healthex 2010.

Global medical equipment and devices must tap into this emerging market and explore the potential of India as a future production hub. The challenge is to develop and implement cost-effective and scalable models of delivering medical technology in India. A collaborative approach towards encouraging growth in the industry will help in overcoming this challenge and enable the medical technology industry to transform the Indian healthcare scenario, he added.

Medical devices industry which is already growing significantly in the US and UK has started to show lucrative opportunities in India too. But the concerns of the sector are the absence of a legislation in the regulation of medical devices, said Bose who was in Bangalore in connection with the two-day Healthex 2010 an international exhibition of hospital, medical and surgical equipment, materials and supplies besides allied services to be held next week here.

The global medical device and equipment industry is growing at 15 per cent per year and is estimated to be around US$ 4.97 billion. Currently, India has around 700 medical device manufactures and these include L&T, BPL, Trivitorn among others. The range covers medical disposables, medical diagnostics, medical electronics and medical equipments and implants. The country's diagnostic equipment market is valued at Rs 2,000 crore. The surgical equipment sector is Rs 1,300 crore, imaging devices Rs 1,300 crore and electronic treatment sector is Rs 1000 crore, said Bose.

There are also many information technology companies which have made investments to develop specific products for the medical technology industry. These include Texas Instruments and IBM which have developed the affordable and efficient technologies. There is ample potential for multinational companies to enter the country. In fact, Home Healthcare is viewed to spur future growth opportunities. This is where Philips too is looking to chart the inorganic growth path. In 2008, Royal Philips Electronics acquired Respironics, a global leader in the treatment of obstructive sleep apnea. The take-over was a part of the global strategy to achieve a leading position in the high growth sector of home healthcare.

The growth of the home healthcare market has led medical equipment majors including Philips to develop and launch products. Some of the novel devices would include products for sleep apnea, falling blood pressure, pathology tests carried out at home and results generated in real-time, stated Bose.