Once inter-ministerial consultations are over Cabinet note will be floated
In order to attract more investors in country, the Government is working on to bring separate foreign direct policy (FDI) policy in medical devices.
“We are trying to bring separate policy for FDI in medical devices from other pharmaceutical foundations and inter-ministerial consultations are going on. We have asked them (Department of Pharmaceutical) to define what are medical devices because they are administrative ministry,” sources close to the development told The Pioneer.
“We have also asked Health Ministry, Department of Pharmaceuticals and Finance Ministry to give their input soon and once the consultation is over, we will float the Cabinet note,” added sources.
Currently, medical devices come under the purview of the Drugs and Cosmetics Act, and the rules framed under it. FDI in the sector is governed by the same rules as for pharmaceuticals.
India allows 100 per cent FDI in the pharma sector. While FDI is permitted through automatic route in case of greenfield investment or new venture, Foreign Investment Promotion Board (FIPB) approval is required in case of brownfield or existing companies. Besides, there are many other riders.
According to a recent report from The Boston Consulting Group and Confederation of Indian Industry (CII), the medical technology sector in India was estimated at $6.3 billion in 2013, growing annually at 10-12 per cent. The report says the sector is highly under-penetrated, contributing merely seven to eight per cent of the spending on health care, compared to 18 per cent on pharmaceuticals.
It says the medical technology sector has the potential to touch $50 billion by 2025, if it gets ample Government support and clarity, in terms of policy and regulation
“Attracting large global companies will create a base, which will then build up the components ecosystem. This, in turn, will enhance local capabilities and help local companies build their access to components, and greatly enhance the manufacturing capability,” report added.
Currently, India imports around 70 per cent of the medical devices used here. On the other hand, domestic pharma companies are major exporters of essential medicines to the world.
After a spate of mergers mergers and acquisition of big domestic pharma companies by multi-national firms, Government tightened the FDI policy for the sector.