Medical electronic equipment market holds great potential for investors in the healthcare and pharmaceuticals sectors—most importantly from sectors of high quality and specialised medical and selfcare equipment. This growth is mainly attributed to the rising per capita income, improved lifestyle, construction of new state-of-the-art hospitals in urban areas, and the need to provide better healthcare services to semi-urban and rural areas through telemedicine, etc. These factors have encouraged the healthcare sector in India to undergo major changes and fueled the demand for healthcare equipment and devices across various segments to rise significantly.
By Himanshu Yadav
Wednesday, December 16, 2009: According to Cygnus research report, the Indian medical equipment and devices market, which was US$ 2.75 billion in 2008, is expected to reach US$ 5 billion by 2012, with an annual growth rate of nearly 15 per cent. According to the report, the driving factors are focused investment in healthcare infrastructure; and interest of foreign manufacturers in making India the global hub for manufacturing of medical devices and equipment.
Manufacturing scenario
India has immense potential in terms of manufacturing complex and low-to-medium value medical electronic devices. However, Indian manufacturers have not explored this potential at all, pushing the segment to be fully dependent on imports. Nearly 60-70 per cent of the market is dependent on import. Not enough being done in the space of indigenisation of medical equipment as well.
As Uday Puri, business manager, MediVed Innovations Ltd, puts it, “There is no ecosystem for high grade manufacturing in India. India’s less penetration level, low affordability, lack of awareness, and non-availability of raw materials make the healthcare device market more dependent on imports.”
As reflected in Association of Indian Medical Device Industry (AIMED) presentation on medical device industry, the current ratio of imports is very high as compared to exports. Only 20-30 per cent demand is met by indigenous manufacturing. Approximately, 150 key Indian players are there in this industry and over 700 establishments across India are engaged in manufacturing of products such as sterile disposables, diagnostics, implants, electronic instruments, consumables, etc.
Rajiv Nath, forum coordinator, AIMED, is optimistic, when he says, “In terms of global potential, India stands well positioned but as far as actual manufacturing is concerned we are nowhere in the picture.” The same is echoed by Shreedhar Perepa, general manager, R&D services, MindTree Ltd, a design & development firm, offering services to medical equipment manufacturers. “In terms of consumption, we are very much comparable with countries like China as we have the same demographic and economic conditions. But when it comes to manufacturing, India is far behind.”
Although the government has identified healthcare as a priority sector and has taken measures to promote the medical device market, heavy import is acting as a deterrent for local manufacturing. While the volume of imports in India have significantly increased due to reduction in customs duty on medical equipment, the country’s export ratio is still far behind.
However, there are companies which are manufacturing in India like Philips Electronics India Ltd, Wipro GE Medical Systems, Medived Innovations Pvt Ltd, Siemens India Ltd, Roche Diagnostics India, British Physical Laboratories India Pvt Ltd (BPL), Opto Circuits India Ltd, etc. These companies produce high end products like diagnostic and preventive healthcare to low end products comprising blood glucometer, temperature measuring equipment, etc. However, in terms of export to Middle East, Africa, South America, etc, Indian manufacturers face problems in getting free sales licence from the Indian government. Hence, most of the multinationals are downsizing their manufacturing operations in India due to government policies.
Potential market
The market for medical electronic devices and equipment in India is ever increasing and as the demand is steady from the public and private sectors. According to Puri, “The key areas of investment opportunity are medical infrastructure, telemedicine, medical equipment, components for medical devices, etc. With larger investments, demand for medical electronic devices and equipment will swell. Indian manufacturers can make profits in this situation.”
“In the last few years, the number of clinics and hospitals have increased by almost four times in the country. This has also resulted in increased demand for medical equipment, which has made the medical device sector one of the most promising markets in India. Considering the size of our population, the penetration level is much bigger for companies in India than in other Asian countries, especially with the coming up of many super-speciality hospitals and clinics in metropolitan cities. This will increae the demand for high end equipment like ultrasound, X-ray, CT-Scan, MRI, etc,” says Dr Balgopal Nair, senior consultant, orthopaedic surgeon and traumatologist, Orthonova Hospital.
“It is difficult to predict how big the medical electronics market will get. But we do believe that there is a tremendous opportunity if we apply semiconductor technology to medical devices, says Rakesh Joshi, business development manager, medical business, Texas Instruments India.
In India there is presence of many multinational companies along with service backup companies and design houses, which are creating an ecosystem for the development of electronic medical equipment. “We have products which are specifically targeted to both high end and low end segments. We are involved in medical imaging, ECG, integrated analogue content solutions for ultrasound, providing miniaturisation, blood glucometer, pulse oxy-meter, micro-controller solutions,” says Joshi. “To match the products of multinational companies, indigenous products undergo innovations, and the latest technologies that are picking up is low power wireless monitoring systems, tele-medicine, etc,” he adds.
“We generally cater to high end segments and design for imaging equipment and ultrasound. For low end equipment segment, we design blood glucometers. We also have intellectual health property like bluetooth health devices,” states Perepa.
Economic loss
The medical device market has become too big to be ignored. But with less manufacturing happening in this sector in India and with several government policies that are encouraging high volume of imports, the Indian government is losing almost Rs 100 crore export revenue per month. Countries like China, Taiwan and Malaysia have become favourite destinations for foreign direct investment in healthcare industry.
It is high time that the government starts encouraging domestic manufacturing in this sector. It can encourage foreign collaborations, and special economic zones can be provided for medical device manufacturers. It also needs to bring stringent quality standards for the industry so that Indian medical devices can compete globally.
Current Scenario Less than 2 per cent of the entire medical electronic industry has been given the licence/registration since the past 20 years
There is no administrative ministry to look after the interest of this industry
There is no single export promotion council for the industry
Medical devices of Europe and USA pass through stringent quality parameters with prestigious CE certification but Government of India offers no such qualifying parameters for medical devices industry.
Worldwide over there are separate regulations for pharmaceuticals and medical devices companies but not in India
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