To spruce up business and encourage investment opportunity for small scale manufacturers, the Union ministry of Micro, Small and Medium Enterprises (MSME) has identified auto component, medical, electronics and equipment sectors as a focus sector for Japanese investment.  Association of Indian Medical Device Industry (AIMED) stressed that this comes as a well appreciated and welcome move for the medical device sector which till recently has been struggling to get a niche in the country.

To gauge the industry's reaction and discuss strategies that would help channelizing Japanese investment into medical device sector, the government had a meeting with the stakeholders in Delhi last month. Rajiv Nath, forum coordinator from AIMED informed that the industry is very happy with this development as driving Japanese investment into the sector will give the much needed boost to the companies who mostly fall under the MSME segment.

However, amidst all the positive developments, the industry is cautious as they fear that all the measures by the government will not be enough to bring in investment in the medical device sector without first addressing the domestic issues.

Nath said, “Indian medical devices market predominantly comprises small and medium enterprises only, which make our issues and challenges very different from that of other sectors. We are grateful that the government is considering to boost this sector on a priority base. However all these measures to attract foreign investment like that of Japan will be in vain if the government fails to first address the issues of the domestic manufacturers.”

He pointed out that to provide investors  a conducive environment it is imperative to bring in some semblance in the industry by boosting their confidence. Nath stressed that demand for increasing the import duty of medical device to 10 per cent for all devices, had been one of the top most agenda of the industry over a very long time, as it is threatening to kill the domestic industry completely, which still remains unheard.

Currently the import duty of finished medical device is somewhere between 0 to 5 per cent, depending on the products. It has been observed that many manufacturers under pressure are shifting their focus on imports than in house manufacturing to escape the huge costs associated with it.

Similarly, lack of proper regulatory environment is another glaring issue. Why would a foreign company invest in a sector, which is facing so many challenges within the country, questions Nath. “Government first needs to prioritize addressing these major issues before embarking on such schemes, failing which it will not be able to garner foreign investment into the sector as desired. Even the industry will not be able to leverage the best from the opportunities as we are already coping with too many issues,” he added.