An Analysis of the Medical Devices Sector in India—Domestic Manufacturing and International Trade

In the Indian context, while a lot has been spoken and written about the success of the biotechnology and pharmaceuticals sectors, the medical devices sector has remained completely in the shadows, both in the academic literature as well as in the policy domain. With an increasing burden of non-communicable diseases, the management of which depends more on diagnosis and monitoring than on cure, and medical devices have become even more indispensable in the modern-day treatment process. Increased diffusion of technology followed by the access to the same remains contingent on domestic production capabilities as well as participation of the country in international exchange. Dependence on imports from MNCs can potentially inflate the healthcare costs—this can have catastrophic impacts in India where health care is mainly financed through out-of-pocket expenditure. Thus, increased access to technology should come from domestic manufacture. This paper, in this context, tries to study the multi-product medical devices sector in India. The focus is on local manufacture and international trade. We find that manufacture of medical devices remains mostly an activity that lacks coherent definition. The local sector remains primarily occupied with producing low-value, low-technology and high-value products, while imports supply most of the market for high value, high technology and low volume. The attempt of the domestic sector to move up the technology value chain in the last two decades, even though significant, remains incomplete. Such import dependence in a sector like health care is not desirable and can stifle technology diffusion among the masses. In such a scenario, it becomes imperative for the government to promote self-sufficiency in this sector through targeted policies in a manner similar to what was done for the pharma sector in the period 1970 onwards.