Time to reduce dependence on import of medical devices

The Indian govt needs to take policy decisions as done for mobile phone and consumer electronic industry to give a level playing field, if not a strategic advantage to domestic manufacturers, while safeguarding consumers. Otherwise, the country will remain 80% import dependent which, at any standard, is a high healthcare security risk

During the financial year 2021-22 compared to the previous years, imports of medical devices grew at an alarming 41 per cent as India imported medical devices worth Rs 63,200 crore in 2021-22, against Rs 44,708 crore in 2020-21.

China remained at the top of import source for India as medical device imports from China grew 48 per cent from Rs 9,112 crore in 2020-21 to Rs 13,538 crore in 2021-22. Imports from the USA also increased steeply by 48 per cent to Rs 10,245 crore in 2021-22 from Rs 6,919 crore in 2020-21. The value of medical devices from China was nearly the same as the combined value of imports from Germany, Singapore and the Netherlands in 2021-22.

The gravity of the situation can be gauged from the fact that the increase of import of medical devices has been five-fold over a six-year period as India imported Rs12,866 crore worth of medical devices in 2016-17. Among the six major categories of medical devices like consumables, disposables, electronics and equipments, implants, IVD reagent & surgical instruments that are imported, the growth has been the highest in the 'electronics and equipment' category.

India imported Rs 40,649 crore worth of medical devices that come under this category in 2021-22 against an import worth Rs 4,569 crore in 2016-17. The import of surgical instruments went up to Rs 1,260 crore from Rs 243 crore during this period. The other categories of products fared like this: IVD reagent (from Rs 361 crore in 2016-17 to Rs 6,564 crore in 2021-22), consumables (from Rs 5,249 crore in 2016-17 to Rs 8,488 crore in 2021-22), implants (from Rs 384 crore to Rs 3,155 crore) and disposables (from Rs 2,061 crore to Rs 3,084 crore).

Of course, the situation is alarming. It calls for immediate corrective measures from the government. The government should now neutralise the 12-15 percent disability factor in manufacturing medical devices in India. The higher imports has resulted in local industry players closing down their units - especially those which went into production of masks, PPE kits, thermometers and gloves during the Covid-19 period which helped the country to have adequate supply even during the peak period of the pandemic. The government should now recognize the reality that Indian manufacturers have a 12-15 per cent disability factor in manufacturing medical devices in India.

The government should neutralise this disability for reduction of medical devices imports in India as was in the case of consumer electronics, including mobile phones and even in the toy industry. At present, the duty on Chinese imports ranges mostly from zero to 10 per cent, but the bulk of the items are in the 7.5 per cent category and one item at 25 per cent. With the Indian government's push to make India self-reliant in medical device manufacturing, during the pandemic several local units making masks, PPE kits, thermometers, and gloves mushroomed in the country as there was very high demand.

According to industry sources, from 1,200 units, the numbers had gone up to 1,800 during the peak of the pandemic. Slowly, units started to shut down as imports from China kept on rising. Now, it is estimated that there are around 1,500 such units, and many more are on the verge of closing down their units. The capacity utilisation of the domestic industry had dropped by the October-December quarter of 2021-22. From the peak utilisation levels of 100 per cent, by November 2021, around 33 per cent, or one-third of India's medical devices making capacity, was estimated to be lying idle.

The government should expedite steps to end the 80 per cent import dependence and ensure patients' protection, stronger quality and safety regulations, price controls to make medical devices and quality treatment accessible and affordable and ethical indigenous manufacturing viable. It should consider shifting from an 8 Digit HS Code to a 10 Digit HS Code as done by USA and Europe to give more granular data for enabling better analysis and policy making.

The Indian government needs to take policy decisions as done for mobile phone and consumer electronic industry to give a level playing field, if not a strategic advantage to domestic manufacturers, while safeguarding consumers. Otherwise, the country will remain 80 per cent import dependent which, at any standard, is a high healthcare security risk.

(The author is freelance journalist with varied experience in different fields)