Indian Medical Devices Industry: Current Status and Future Possibilities

Medical devices is a multi-disciplinary sector with a broad classification that includes surgical instruments, in-vitro diagnostic equipment and reagents, implants, electronic diagnostic and therapeutic equipment, consumables, and disposables. In India, the medical device business is composed of large multinational companies, small and medium enterprises (SMEs), and startups. Currently, the medical device market is valued at approximately $10 bn. In the last decade, the CAGR was 10-12%, according to government data.

The industry is growing like never before, with India as one of the top twenty medical device markets in the world. India is the fourth largest medical device market in the subcontinent of Asia after South Korea, Japan, and China. India is also the second largest manufacturer of PPE kits and has the capacity to produce over 10 lakh PPE coveralls daily.

Overview of the Medical Device Sector

Medical devices are grouped into five main segments:

Dental products such as braces, dentures, etc.
Patient aids that include pacemakers, hearing aids, etc.
Diagnostic imaging that consists of ultrasounds, MRI, X-Ray, etc.
Orthopaedics and prosthetics such as artificial joints, knee implants, etc.
Disposables and consumables that include syringes, needles, etc.

There are 800+ domestic manufacturers and 250+ MedTech startups that contribute to the production of 6000+ types of medical devices. Around 65% of the manufacturers are domestic players with fewer exports. They operate in the segment of consumables and accommodate the requirement of local consumption. Multinational corporations have substantial service networks and produce more devices with high technology when compared to other suppliers.

In FY 2021-22, India imported medical devices worth $8539.5 mn, which is higher than $6240.55 mn in FY 2020-21. In FY 2021-22, India exported medical devices worth $2923.16 mn, which is greater than $2532.16 mn in the previous financial year.

In FY 2021-22, electronic equipment accounted for a significant portion of imports at $5441.22 mn, followed by consumables and disposables worth $1623.55 mn. The import of Implants and surgical instruments grew at 88% and 63% respectively compared to FY 2020-21. The top 5 countries from where medical devices are imported are China, the US, Germany, Singapore, and the Netherlands. The imports from the aforementioned countries contributed to around 68% of the total value of imports.

In FY 2021-22, consumables and disposables were exported the most at $1378.48 mn, followed by electronic equipment worth $1162.58 mn. The export of IVD reagents and implants rose to 69% and 37% respectively compared to FY 2020-21. India exports to a total of 150+ countries. Among them, the top ten are the USA, China, Germany, Singapore, France, Brazil, Iran, Turkey, the Netherlands, and Belgium. The exports to these countries contributed to around 40% of the total exports in FY 2019-20.

Industry Trends

Wearables are gaining popularity among consumers since they are easy to use. They include exercise trackers, glucose monitors, and those for mental health.
Digital Health and health-tech startups were able to raise more than 2 billion during 2011-2020 consisting of 500+ investments into 340+ companies.
Home healthcare could replace up to 65% of needless hospital visits and has the potential to decrease hospital costs by 20%. Home healthcare is estimated to grow at a CAGR of 19.2% and reach US $21.3 bn by 2027.
Telemedicine is estimated to rise to US $5.5 bn by the year 2025 at a CAGR of 31%.
Predictive analytics models that use ‘Big Data’ could increase the quality of patient outcomes and help physicians get useful insights.
Robotics is one the fastest growing areas of healthcare. Future developments include robot companions that can reduce loneliness, assist children afflicted with chronic illnesses and treat mental health issues.

Expected Growth and Growth Drivers

Among the emerging markets, India’s medical device market is growing the fastest. In the 2022-2023 Union Budget, $11.3 bn has been set apart as the budget for the healthcare and pharmaceutical sector. In 2020, the medical device market was valued at approximately $12 bn. Medical device export is expected to reach approximately $10 billion by 2025.

It is estimated that the medical device industry will grow at a compound annual growth rate (CAGR) of 15%, which is 2.5 times the growth rate globally. The market can potentially grow by approximately 4 times the present market size by FY 2030. It is expected that the diagnostic imaging market will increase at 13.5% CAGR between 2020 and 2025.

The medical device sector has attracted investments through the years. In FY20, the foreign investments in this sector increased 98% YoY to $301.01 mn as against $151.87 mn in FY19. Between April 2000 and March 2022, the inflow of FDI in the surgical and medical appliances sector was at $2.41 bn.

One of the key growth drivers is government initiatives. Listed below are the steps taken by the government over the past decade to boost the medical device sector:

Sep 2014- Make in India campaign is launched [link]
Dec 2014- 100 percent FDI is allowed in the medical device sector for greenfield and brownfield projects.
April 2015- MedTech parks are introduced.
2018- Medical Device Promotion Council is set up.
2020- Production Linked Incentive Scheme to promote domestic manufacturing of medical devices [link]
The government grants Rs. 400 crores to construct four medical device parks [link]
2021- Loan Guarantee Scheme for COVID Affected Sectors (LGSCAS).
June 2021- QCI and AiMeD launch the ICMED 13485 PLUS scheme for undertaking the verification of medical devices’ safety, efficacy, and quality [link]
2021- Department of Pharmaceuticals issues a revised notice about PPO [link]

Innovation hubs have been established in partnership with leading multinational corporations in Gurgaon, Chennai, and Bangalore to provide solutions that address certain challenges in the healthcare industry. The government has given the approval to establish four medical device parks in Uttar Pradesh, Tamil Nadu, Himachal Pradesh, and Madhya Pradesh for providing infrastructure facilities, creating an ecosystem for manufacturing medical devices, and decreasing the cost of manufacturing significantly. There are manufacturing clusters of medical devices in various parts of India.

Other growth drivers are

Increase in lifestyle diseases.
Rise in health awareness among people and their change in mindset about preventive healthcare.
Expected increase in the number of households in the middle class over 10 years. The purchasing power would also increase with regard to medical devices.

Medical device exhibitions are conducted regularly in several locations globally to showcase the latest innovative devices and to enable buyers and sellers to connect and do business. MEDICA is the world’s largest medical trade fair. In 2019, over 5,522 exhibitors from 69 countries attended the fair. The next event is from 13 to 16 November 2023 in Germany. Arab Health is a trade show and healthcare conference where key stakeholders collaborate. It is an event where networking with potential buyers and industry leaders is possible. The next trade show is from 30 Jan to 2 Feb 2023 in Dubai.

Africa Health is a noteworthy healthcare exhibition in Africa, which brings the world the latest medical devices and networking opportunities. In 2023, the exhibition would take place from 24 to 26 October. Africa Health & Wellness Expo is the number one healthcare industry trade show and conference in Eastern Africa. The event is an opportunity for the public as well as healthcare and correlated industry stakeholders to connect, network, and conduct business. The next expo would take place from June 15 to 17, 2023 in Kenya.

The Medical Devices Virtual Expo 2021 displayed products manufactured in India and allowed Indian suppliers to interact directly with importers/ buyers from other countries. There were 300 international buyers from the healthcare industry who took part in the event. In recent years, digital marketing, B2C and B2B platforms have been gaining prominence as growth drivers. Manufacturers and buyers reap the benefits of using these mediums for their exports and imports.

How Digital Marketing, B2C and B2B Platforms Enable the Growth of Exports

Earlier, companies were heavily dependent on manual efforts for marketing their products. At present, many utilize digital marketing for attaining global reach and other benefits in a short span of time. Digital marketing strategies can help companies to connect with international customers at a lower budget when compared to traditional advertising. Brands can target the right audience when they go through relevant services or products. Digital marketing gives exporters the opportunity to showcase their products through videos and images, which appeal to clients and deliver quick results.

Digital marketing enables the measurement of statistics with ease as many aspects of digital marketing campaigns can be traced and tested. Increasing the usage of B2C and B2B platforms can allow micro, small, and medium enterprises to compete with the services and products of foreign competitors.

The main advantage of B2C and B2B platforms is that companies can expand their business with minimal investment. Such platforms enable sellers to expand their business to many countries more efficiently than physical stores that can reach a limited number of customers. Businesses that use the above online platforms do not necessarily have to spend money on billboards or television ads to get the attention of their target audience. They can use digital marketing strategies to tailor their brands and offer promotions and discounts.

Digital marketing is therefore a key aspect that boosts export-driven sales. B2B platforms assist exporters by helping manufacturers finding the right buyers, develop relationships, and boost sales. Medzell is an Indian B2B platform and sales aggregator that facilitates business between Indian suppliers of medical devices and global buyers. More than 80 manufacturers have registered with us and we have a global buyer network of 5000 clients in over 100 countries.

Conclusion

In FY 2020-2021, India exported medical devices worth $2532.16 mn and imports worth $6240.55 mn. There has been evident growth in exports. The medical devices market is expected to reach approximately 4 times the present market size by FY 2030. The export of medical devices is estimated to be $10 bn by 2025. Government initiatives such as schemes and the approval given for the construction of medical device parks can help manufacturers of medical devices to develop India as a hub for international and domestic markets.

In 2020, the PLI Scheme for Medical devices and a scheme to support the financing of projects in 4 medical devices parks were introduced with an outlay of Rs. 3,420 crores and Rs. 400 crores respectively. The Indian government recently made the decision to establish a separate Export Promotion Council (EPC) for Medical Devices, for boosting the export of medical devices.

We at Medzell are contributing more to the export of medical devices from India by assisting all types of manufacturers offering diverse product segments. Our ever-growing client base demonstrate their trust in the quality of our services. We have successfully reached 100+ countries in Africa, Asia, Europe, the Middle East, and South America.

You can know more about Medzell and the services that we provide here.

We offer unique services to global buyers and enable Indian manufacturers to increase their exports.