The Confederation of Indian Industry (CII), has submitted its recommendations to the department of pharmaceuticals (DoP) with regard to the infrastructure support required to boost manufacturing in the medical technology sector in line with the government’s “Make in India” mission.

Regarding implementation of the preferential market access (PMA) policy in medical equipment and device, the industry members recommended promoting the components and ancillary industry without which “Make in India” is not possible in this technology-driven sector.

Chairman of CII Medical Technology Department, Himanshu Baid, said “Without the availability of indigenous components, the PMA policy will not yield any results, as already seen in the electronics and IT hardware sector since the last four years. Before the implementation of PMA policy in medical devices and equipment sector, there is a need to properly analyse the components manufacturing capabilities in India.”

CII has emphasised the importance of recognising the fact that the manufacturing business in India is quite challenging. While the labour costs are lower in the country, the capital investment and productivity of the labour are critical limiting factors to the manufacturing business case. Combined with approval delays, this makes the manufacturing environment quite challenging for entrepreneurs.

“Access to low-cost capital through soft loans, subsidised land, and assured power & water supply combined with tax incentives and single-window clearance, would certainly build a stronger business case in India,” said Pavan Choudary, co-chairman, CII Medical Technology Department.

Key recommendations include attracting big global medical technology companies to India which will help create a base building up the components ecosystem. This, in turn, will enhance local capabilities, enable Indian companies to get access to components and greatly enhance the local manufacturing capability. Once the ancillary industry is established, there will be significant value addition in finished medical equipment and device. To begin with, only MSME/SME industry components can be given preference in the PMA policy.

The process of setting up manufacturing facilities needs to be streamlined by designating medical technology hubs all over the country with the right infrastructure in place to support complex medical technology manufacturing.

The recommendations also include establishing medical technology hubs in each zone (north, south, east and west), manufacturing incentives like tax support and low-cost funding (5 per cent lower rate than the bank lending rates) to spur investments and making the business case attractive, providing concessional power tariff in manufacturing hubs, subsidised land prices for setting up medical devices industry in medical technology hubs, correcting inverted duty structure, lowering customs import duty on raw materials as compared to finished goods, giving 4 per cent exports incentives for the sector, doing away with the three-year market standing required for new manufacturing units to participate in government tenders.

India is already a large producer of disposables and consumables in India, and export incentives are available for some products. CII has emphasised the need for further capacity building in this segment and focus on quality enhancement for further reduction in imports. The industry needs to get exposed to the learnings of evolving quality standards from countries which have had a head-start in innovations in this space. This will help improve the overall quality standards in India.

There are several misconceptions being spread about the medical technology industry amongst stakeholders. Therefore, it is important to build a positive environment which makes a business case and opens doors for investors to start manufacturing in this sector, thus paving the way for the ‘Make in India’ initiative, says industry representatives.