MedTech (or Medical Technology) is a segment under the larger umbrella of healthcare systems. The segment focuses on designing and manufacturing a wide range of medical products/devices for diagnosis, prevention, monitoring, treatment and patient care. It encompasses a broader scope as opposed to medical devices and includes medical devices with IT connectivity. It also includes devices such as smart inhalers, robotic surgery, wireless brain sensors, 3D printing, artificial organs, and health wearables.
Over the decades, India has achieved significant progress in the healthcare industry and positioned itself as a leading market worldwide. The healthcare industry has witnessed revolutionary changes in terms of technology and with the advent of MedTech, the industry has been able to extend better and faster access to affordable and good-quality care (to patients).
Indian MedTech was worth US$ 10.36 billion in 2020 and is expected to increase at a CAGR of 37% in 2020–2025 to reach US$ 50 billion.
The Indian government's support in terms of outlining favourable regulations & schemes and allowing 100% FDI are driving the MedTech sector. The ongoing pandemic has also increased the demand for technologically advanced, high-quality, low-cost medical devices that are accessible to the Indian population. These factors are also attracting international companies to set up production facilities in India.
Indian MedTech Market
The Indian MedTech market is at a nascent stage; however, it is expected to grow exponentially in the country owing to the rising ageing population, favourable government policies & regulations, increasing health insurance penetration, and growing medical tourism.
The Indian MedTech market is dominated by imported products, both as finished goods and raw materials, and dependence on foreign countries for MedTech is pegged at ~80%. However, there is huge scope for Indian companies to fill this gap.
The market is categorised into the following four major segments:
The MedTech sector has helped enhance the quality of healthcare products and is able to provide real-time diagnosis, reduce healthcare costs and give accurate data for further analysis. During COVID-19, the MedTech segments witnessed a huge demand, along with other segments in the healthcare industry. This sector is expected to record a five-fold rise at a CAGR of 37% to reach US$ 50 billion in 2025, from US$ 10.36 billion in 2020.
India is home to several start-ups, which are developing capabilities for design and manufacturing of high-tech products and leveraging technologies such as 3D printing, artificial intelligence, smart sensors and others to manufacture medical devices and provide digital healthcare solutions. There are ~4,000 health-tech start-ups operating in India and undertaking multiple innovations, which are helping boost the MedTech market.
International companies are also entering the Indian MedTech market by either setting up their facilities or acquiring local companies. A few of the international MedTech companies—including 3M, Becton Dickinson, Abbott Vascular, Boston Scientific and GE Healthcare—have set up manufacturing facilities in the country.
Government policies & regulations play an important role in creating an enabling environment for any industry. The Government of India has taken several initiatives to support the MedTech sector and help realize its potential in the near future.
In September 2021, the Department of Pharmaceuticals notified the scheme for ‘Promotion of Medical Device Parks’ with the objective of helping medical devices & MedTech companies with easy access to standard testing and world-class common infrastructure facilities.
The Indian government has planned more medical technology parks to stimulate domestic medical equipment manufacturing. This initiative will help increase the inflow of foreign direct investments, promote research & development and production advances, boosting the efficiency and effectiveness of medical electronic devices.
In order to encourage the domestic MedTech sector, the government has offered a 15-year income tax exemption for locally created medical technology products.
To boost the market and increase investment inflow, the government has allowed 100% FDI.
These initiatives will help develop India as an emerging hub for medical technology and create a new set of opportunities in the coming years.
The Road Ahead…
The Indian MedTech sector comprises large, midsized and small companies, which have multiple opportunities to meet the demand from domestic as well as global markets.
Companies should focus on creating cost-effective, high-end, technology-enabled healthcare solutions, which can help improve the well-being of millions of people. Companies operating in this market should work towards manufacturing products relevant to the Indian market. It should also focus on manufacturing affordable products and promoting awareness about them.
Key enabler for the MedTech sector is secured data that can be stored and analysed easily. Under the National Digital Health Mission, the government is planning to introduce a unique digital health card for all citizens. This will have an individual’s entire medical record and can be used by doctors to understand the individual’s medical history. This initiative will be supported by MedTech solutions.
The government should provide a favourable regulatory landscape in this sector so that it can attract more investments and encourage international players entering the domestic market. It should also focus on providing incentives, low custom duties and tax concessions, along with encouragement for relevant R&D.
Several states such as Andhra Pradesh, Maharashtra and Gujarat are planning to set up medical technology parks in their respective states to enable manufacturing of cost-effective, high-end MedTech devices and provide job opportunities.
The sector should encourage collaboration between medical centres and technology universities to provide innovative solutions.
Though the current Indian MedTech market is small (in terms of value), government support, innovative & customised solutions, growing population, increase in public & private spending, and growth in medical tourism will help the market reach US$ 50 billion by 2025.