Introduction on India’s Medical Device Industry: The Ministry Of Chemicals And Fertilizers (Department Of Pharmaceuticals) For The Promotion Of Medical Device Industry Published Its 50th Report in February 2024. This blog covers some of the key highlights from the report India’s medical device industry and various schemes undertaken by the Government to promote the Medical Device Industry. It also talks about the various changes in the regulatory landscape affecting the commercialisation of medical devices in India.
As of February 11, 2020, India’s Department of Health and Family Welfare expanded the medical devices definition to include instruments, appliances, implants, and related articles for human or animal use, focusing on non-pharmacological functions for health management. The sector spans electronic equipment, implants, disposables, surgical instruments, and diagnostic reagents, with significant manufacturing in disposables (e.g., catheters, needles) and implants (e.g., cardiac stents, orthopedic implants) in India.
India’s medical devices industry, marked as an increasing sector, is rapidly advancing within the global market. This field, with the highest growth potential among healthcare sectors, has evolved from a market value of USD 11 billion in 2020, aiming for an estimated USD 50 billion by 2030. India’s contribution to the global medical device market is projected to reach 1.5%. India’s medical device sector, with its high investment and innovation demands, still relies on 70% imports for domestic needs. Regarding the status of medical device imports across various categories within the country over the last four fiscal years, from 2019-20 to 2022-23, the following information has been provided:
| S.No | Segment | FY 2019-20 (USD Million) | FY 2020-21 (USD Million) | FY 2021-22 (USD Million) | FY 2022-23 (USD Million) |
| 1 | Consumables & Disposable | 1076 | 1471 | 1624 | 1091 |
| 2 | Surgical Instruments | 180 | 104 | 169 | 210 |
| 3 | Electronics Equipment | 3647 | 3569 | 5441 | 4884 |
| 4 | Implants | 415 | 226 | 423 | 540 |
| 5 | IVD Reagents | 527 | 872 | 883 | 767 |
| TOTAL | 5845 | 6242 | 8540 | 7492 |
Steps Taken By the Government to Promote the Medical Device Sector In India
1. Schemes for Promotion of Medical Device Industry
(i) Medical Device Parks and Public Procurement Preferences: The Indian government has launched the “Promotion of Medical Device Parks” scheme, an initiative revised from the “Assistance to Medical Device Industry for Common Facility Centre,” on March 20, 2020. This five-year program, running from 2020 to 2025, is dedicated to establishing common testing and laboratory facilities across four designated Medical Device Parks, with a total allocation of Rs. 400 crore. From the 16 proposals submitted by various States/UTs, the Department of Pharmaceuticals has granted final approval to Himachal Pradesh, Tamil Nadu, Madhya Pradesh, and Uttar Pradesh, each receiving an initial fund of Rs. 30 crore in the fiscal year 2021-22. As regards the funds allocated vis-a-vis utilized under the scheme, the details has been given as under:
| Financial Year | Funds Allocated (Rs. in crore) | Funds Released (Rs. in crore) |
|---|---|---|
| 2020-21 | 21.05 | 7.49 |
| 2021-22 | 137.02 | 137.02 |
| 2022-23 | 120.00 | 0.8968* |
(ii) Production Linked Incentive (PLI) Scheme for Promoting Domestic Manufacturing of Medical Devices: Launched in 2020 and extending through 2027-28, the government’s Production Linked Incentive (PLI) Scheme aims to boost domestic medical device manufacturing. Managed by the IFCI and guided by an Empowered Committee led by the CEO of NITI Aayog, it provides a 5% incentive on incremental sales for projects in areas like cancer care and implants, with a budget of Rs. 3,420 crore. Initially setting high revenue targets, the scheme was adjusted after industry feedback to lower the first year’s sales threshold and introduced a new category to encourage wider participation. This strategic initiative, calling for expanded coverage and market access through public procurement preferences, seeks to enhance India’s self-reliance in medical device production.
(iii) Production Linked Incentive (PLI) Scheme for Pharmaceuticals: The Production Linked Incentive (PLI) Scheme, aimed at advancing India’s in-vitro diagnostic (IVD) and pharmaceutical sectors, selected five out of 21 applicants for IVD devices, focusing on domestic manufacturing. The scheme, running from FY 2020-21 to 2028-29, offers incentives on incremental sales for six years. Targeting five IVD applicants, including four MSMEs, due to budget constraints and industry input, it reflects a strategic effort to support smaller enterprises. With a total budget of Rs. 15,000 crore, of which Rs. 250 crore is allocated to IVD devices, the scheme’s first year saw an incentive of Rs. 4.76 crore disbursed to one IVD applicant, highlighting the government’s commitment to self-sufficiency in medical device manufacturing.
2. Non-Schematic initiatives for Promotion of the Medical Device Industry
(i) National Medical Device Promotion Council (NMDPC): Established by the Department for Promotion of Industry and Internal Trade (DPIIT) on December 7, 2018, and restructured under the Department of Pharmaceuticals (DoP) on August 5, 2022, the National Medical Device Promotion Council (NMDPC) aims to support the Indian MedTech industry in line with the National Medical Devices Policy, 2022, targeting Universal Health Coverage. The NMDPC has achieved significant milestones, such as simplifying GeM portal registration for medical device vendors, amending E-Waste Management Rules to accommodate medical devices’ lead content requirements, and streamlining the medical device licensing process. Ongoing efforts include harmonizing labeling regulations under the Legal Metrology Act and Medical Device Rules and negotiating the exemption of medical device accessories from the Compulsory Registration Order, 2012, to ease manufacturing constraints.
(ii) Standing Forum of Medical Devices Associations: The Department of Pharmaceuticals (DoP) established the Standing Forum of Medical Devices Associations on August 25, 2021, to consult on issues affecting the medical device sector and inform policy and program development. This forum has notably contributed to drafting the Uniform Code for Medical Device Marketing Practices (UCMDMP), aimed at guiding the industry towards ethical marketing practices until a dedicated code is operational, pending further action based on a Supreme Court ruling. Additionally, a Task Force was set up to map the testing infrastructure for Medical Devices in India, focusing on a seamless transition for licensing Class A and B devices. This Task Force’s efforts involved classifying medical devices according to standards, identifying required tests and testing equipment, and mapping existing laboratory infrastructure.
(iii) National Medical Devices Policy, 2023: The Union Cabinet approved the National Medical Device Policy, 2023, on April 26, 2023, aiming to propel the medical devices sector forward. This policy outlines a strategy to guide the industry towards achieving significant milestones through interventions in six key areas:
- Regulatory Streamlining
- Enabling Infrastructure
- Facilitating R&D and Innovation
- Attracting Investments
- Human Resources Development
- Brand Positioning and Awareness Creation.
With a long-term vision to position India as a global leader in medical device manufacturing and innovation, the policy sets a target of securing a 10-12% share in the global market within the next 25 years.
(iv) Public Procurement (Preference to Make in India) Order (PPO), 2017: The Department for Promotion of Industry and Internal Trade (DPIIT) enhanced its support for domestic manufacturing with the Public Procurement (Preference to Make in India) Order (PPO), 2017, first issued on June 15, 2017, and revised on September 16, 2020, as part of the General Financial Rules 2017. To streamline this initiative within the pharmaceutical sector, the Department for Promotion of Industry and Internal Trade (DPIIT) appointed the Department of Pharmaceuticals (DoP) as the nodal department for the implementation of PPO 2017’s provisions related to pharmaceuticals and medical devices. Subsequently, the DoP has prioritized domestic manufacturers in the procurement of medical devices by Central Government hospitals, notifying 19 medical devices and 135 in-vitro diagnostics (IVD) under PPO 2017 through orders dated March 25, 2021, and February 16, 2021.
Regulatory Aspect of Medical Devices
(i) Price Regulation of Medical Devices: The National Pharmaceuticals Pricing Authority (NPPA), under the Drugs (Prices Control) Order, 2013, manages price regulation and monitors the availability of drugs and medical devices, classifying all medical devices as “Drugs” from April 1, 2020. It has directly regulated the prices of devices listed in the National List of Essential Medicines (NLEM) and capped prices on certain medical devices like knee implants, pulse oximeters, and oxygen concentrators to ensure affordability and availability. The NPPA also oversees Maximum Retail Prices (MRPs) for other devices, limiting annual price increases to prevent overcharging. Through its authority under Para 19 of the DPCO, 2013, the NPPA can intervene in public interest situations, as seen during the COVID-19 pandemic, to regulate prices and manage shortages. Additionally, it has addressed numerous complaints regarding overcharging and shortages, reinforcing its commitment to ensuring fair pricing and supply. To enhance public awareness and facilitate complaint redressal, the NPPA has initiated the “Consumer Awareness, Publicity and Price Monitoring (CAPPM)” Scheme, supported by the Pharma Jan Samadhan portal and Pharma Sahi Daam App, promoting transparent and accessible pricing information and a mechanism for addressing public grievances, ensuring the principles of affordability and accessibility are upheld across the healthcare system.
(ii) Regulation of Medical Devices for Quality, Safety and Efficacy
(a) Medical Device Rules, 2017: The Ministry of Health and Family Welfare, through the Department of Health & Family Welfare, introduced the Medical Devices Rules, 2017, effective from January 1, 2018, under the Drugs and Cosmetics Act, 1940, to regulate medical devices in India based on risk criteria. These rules, aimed at ensuring the quality, safety, and efficacy of medical devices, align with global regulatory standards and support the ‘Make in India’ initiative by providing a comprehensive framework for the clinical investigation, manufacturing, importing, selling, and distribution of medical devices. Further, with these rules in place the regulatory oversight has been expanded to the entire gamut of devices and classified them into four categories based on the level of risk associated with the medical devices which is as under:
| Risk Criteria | Risk Class | Examples of Devices |
| Low | Class A | Tongue Depressors,Analysers, Crepe bandages |
| Low – Moderate | Class B | Catheters, Cannula, Hypodermic Needles |
| Moderate – High | Class C | Orthopedic Implants, Dental Implants |
| High | Class D | Heart Valves, Cardiac Stents |
The Drugs & Cosmetics Act 1940 and Medical Devices Rules 2017 govern all in-vitro diagnostics and 37 types of medical devices. The GSR 102(E) notice, dated 11.02.2020, expanded the list of devices requiring licensing. From 01.10.2022, Class A & B devices were included, with Class C & D devices being incorporated from 01.10.2023. Presently, Class A & B devices are regulated, and Class C & D devices will be regulated starting from 01.10.2023, as detailed in the provided table.
| Risk base Class | Voluntary Registration | Mandatory Registration | Licensing regime |
| Class A & B | 01.04.2020 to30.09.2021(18 months) | 01.10.202130.09.2022 (12 months) | tw.e.f. 01.10.2022 |
| Class C & D | 01.04.2020 to 30.09.2021 (18 months) | 01.10.202130.09.2023(24 months) | tw.e.f. 01.10.2023 |
(b) Materio-vigilance Programme of India (MvPI): Initiated on July 6, 2015, by the Ministry of Health and Family Welfare, the Materiovigilance Programme of India (MvPI) is designed to ensure the safety of patients by monitoring and evaluating adverse events linked to medical devices and In-vitro diagnostics, recommending regulatory measures to improve safety. The Indian Pharmacopoeia Commission (IPC) in Ghaziabad acts as the National Coordination Centre (NCC) for MvPI, with technical support from the National Health System Resource Centre (NHSRC) in New Delhi and operational support from the Sree Chitra Tirunal Institute for Medical Sciences and Technology in Thiruvananthapuram. This institute serves as both a Medical Device Adverse Event Monitoring Centre and a National Collaborating Centre. MvPI systematically processes adverse event reports, consults with experts, and suggests actions to the Central Drugs Standard Control Organization (CDSCO). It disseminates safety alerts and shares information with the public through the IPC website. To promote awareness and encourage reporting of adverse events by the public, MvPI conducts a variety of awareness programs and displays informational hoardings in medical settings nationwide.
(c) Medical Device Testing Laboratory: India has six Central Medical Device Testing Laboratories for statutory testing, alongside 39 CDSCO-registered labs for manufacturer testing, and 35 for In-vitro Diagnostics (IVDs). Recent amendments allow states to designate testing labs, enhancing local capabilities. These labs must be NABL accredited, and those qualified can register with CDSCO, a move encouraged through public notices to expand testing facilities. Despite these advancements, challenges such as the limited number of central labs and the need for more registered testing facilities persist. In response, the Ministry of Health & Family Welfare is exploring additional testing centers, including a proposal for the South India Textile Research Association (SITRA) Lab, to strengthen support for India’s growing medical device sector.
4. Issues Concerning Medical Device Industry
(i) GST & Basic Custom Duty: The Medical Technology Association of India (MTaI) has expressed concerns over India’s heavy reliance on imported medical devices, constituting over 86% import dependency, and highlighted the burden of high tariffs, cess of 13.75%, and GST rates between 12% to 18% escalating device costs. Similarly, the Association of Diagnostic Manufacturing of India (ADMI) and representatives from Kerala have pointed out the challenges of an inverted duty structure, where imported components attract higher duties than finished products, undermining the competitiveness of domestic manufacturing. In response, the Department of Pharmaceuticals referred to the varying custom tariff rates for medical device materials, acknowledging the hurdles posed by the high cost of raw materials, as revealed in a study by the Foundation for MSME Clusters. This situation is further complicated by the imposition of a Health Cess at a rate of 5% since February 2, 2020, under the Finance Act 2020, applying to devices categorized under HSN 9018 to 9022. These discussions highlight the complex fiscal policy landscape and its implications for fostering a competitive domestic medical device industry in India. The major imported raw materials are:
| Nature | Name |
| Electronic Component | Sensors, X-Ray Tubes, IC chips, motor |
| Metal compounds | SS wire, SS cannula, platinum tungsten alloy, nitinol (NickelTitanium) wire, copper, etc |
| Plastics | Tubing (plastic, TPU, PTFE, catheter), PP, PVC, synthetic resin, plastic wares, Packaging film, ET, TT |
| IVD related | Antigen, antibodies, reagents, enzymes, especially DNA polymerase, bile salts, MISPA, ELISA, microbiology grad agar, chromogenic substrates, oligonucleotides |
| Semi-finished | Haemodialysis catheters, dialyzer, special interface connector, flow regulator |
(ii) Research and Development: During a session on December 14, 2022, an Association of Indian Medical Device Industry (AIMED) representative stressed the importance of R&D in developing high-end medical devices, urging government support as a risk mitigator in the early, costly stages of R&D, including the acceptance of failures. In response, the Department revealed plans for a specific R&D policy in the pharma and medical device sector, nearing Cabinet approval, aimed at establishing Centres of Excellence and supporting specific research projects. This initiative is part of the broader draft ‘National Policy on R&D and Innovation in the Pharma-MedTech Sector in India’, launched on September 26, 2023, to foster innovation and academia-industry collaboration with an investment incentive. Additionally, the Cabinet approved the Scheme for Promotion of Research and Innovation in Pharma-Med Tech (PRIP) on July 25, 2023, with a Rs. 5000 crore budget for 2023-28. This scheme, notified on August 17, 2023, focuses on enhancing research infrastructure and financially supporting projects in six priority areas, including medical devices and antimicrobial resistance, through the National Institutes of Pharmaceutical Education & Research (NIPERs) and partnerships with the private sector.
(iii) Human Resource Development in Medical Device Sector: To mitigate the skill gap in the medical device sector, the Department of Pharmaceuticals (DoP) is establishing Institutes of National Importance (INIs) akin to the National Institutes of Pharmaceutical Education & Research (NIPERs), with seven existing NIPERs across India. Four NIPERs in Mohali, Hyderabad, Guwahati, and Kolkata have initiated M.Tech (Medical Devices) programs, alongside M.Pharma and Ph.D. courses in Medical Devices at NIPER, Ahmedabad, with plans for other NIPERs to follow suit as resources allow. Furthermore, the DoP has introduced the ‘Human Resource Development in Medical Devices Sector’ scheme with a Rs. 480 crore budget over three years to support postgraduate courses and capacity development in design, production, and testing of medical devices at government institutions.
(iv) Human Resource and Training for Regulation of Medical Devices: In December 2022, the Drug Controller General of India discussed training efforts and the need for more skilled personnel for medical device regulation, leading to the notification of 236 medical device officer positions and the appointment of 23 drug inspectors and three assistant drug controllers with engineering backgrounds. In July 2022, an additional 219 posts were approved to further support regulatory needs. However, by October 2023, it was noted that these positions, both notified and newly created, remained unfilled, highlighting a gap in the recruitment process for enhancing the regulatory framework for medical devices.
(v) National Standards for Domestically Produced Medical Devices: During their 2023 study visits to Goa and Kochi, the Committee learned from local pharmaceutical and medical device associations about the urgent need for a national standard for medical devices manufactured in India. Currently, due to the lack of national standards, domestic manufacturers are adhering to international standards such as those from the WHO, America, or Europe, which complicates exports. The variety of testing standards required, even for low-risk devices, presents challenges, especially when procurement agencies demand compliance with different standards. As per the Medical Devices Rules, 2017, devices must align with Bureau of Indian Standards (BIS) or notified Ministry of Health and Family Welfare standards, defaulting to ISO/IEC or manufacturer’s validated standards in their absence. BIS has published 1540 Indian Standards for medical devices and initiated a 5-year Standards National Action Plan (2022-2027) to prioritize standardization in medical devices among other sectors, addressing the industry’s call for cohesive national standards.
(vi) Single Window System/ Unified Application Portal: Industry representatives, including those from the Andhra Pradesh MedTech Zone (AMTZ), have highlighted the complexity and inefficiency of the current certification process for medical devices, characterised by its time-consuming nature and the involvement of multiple regulatory bodies. To streamline this process and alleviate administrative burdens, a proposal for a unified application portal was suggested, allowing manufacturers to submit a single application to be reviewed by all relevant regulators. Responding to these concerns, the Ministry of Health and Family Welfare is working on integrating the existing medical device online portal with various departments like BIS, AERB, MeitY, and the Department of Animal Husbandry and Dairying through CDSCO.
(vii) Regulation of Refurbished/Pre-owned Second hand Medical Devices: The Association of Diagnostic Manufacturing of India (ADMI) expressed concerns about the unregulated import and use of second-hand diagnostic instruments in India, impacting the quality of diagnostics and market fairness. In response, the Ministry of Environment, Forest and Climate Change (MoEF&CC) regulates the import and use of refurbished/second-hand medical devices under the Hazardous and Other Waste (Management and Transboundary Movement) Rules, 2016, and its amendments. These rules allow the import of certain used electrical and electronic assemblies, including medical devices, by the actual user with MoEF&CC’s permission, while prohibiting the import of used critical care equipment for re-use. Amendments made in December 2022 further permit the import of high-end used medical equipment under specific conditions. Despite these regulations, the Medical Devices Rules, 2017 lack specific provisions for refurbished medical devices. The Department of Health and Family Welfare has no data on the market share of refurbished medical devices in India or specific assessment centers for evaluating the safety and quality of these products.
Conclusion
India’s medical device sector is at a crossroad, with the potential to emerge as a global powerhouse in healthcare innovation and manufacturing. Achieving this potential requires a coordinated effort to enhance domestic production, streamline regulatory processes, and support industry growth. Morulaa’s expertise in CDSCO regulatory approval processes and its comprehensive support for manufacturers and importers in registration and compliance is required for product sales in India. Contact Morulaa on admin@morulaa.com or Click Here to get in touch with us.
