India’s medical device industry is emerging as a rapidly growing sector, establishing a strong global presence through the expansion of healthcare services and technological innovations. This industry is not only meeting the country’s healthcare needs but is also significantly contributing to economic growth and job creation.
In this article, we will delve into the current state of India’s medical device industry, recent trends, government initiatives, investment opportunities, future prospects, and the challenges faced by this sector.
Current State of the Indian Medical Device Industry
India’s medical device market reached $15.35 billion in 2023 and is expected to grow to $20.51 billion by 2029, expanding at a CAGR of 5.35%. However, India’s share in the global market is currently just 1.65%, indicating significant room for growth. Despite this, India is already the fourth-largest medical device market in the world, ranking after Japan, China, and South Korea in Asia.
The Indian medical device market is expected to grow at a CAGR of 5.35% between 2023 and 2029.
The Indian medical device market is heavily dependent on imports, with 70-80% of its requirements sourced primarily from the United States, China, and Germany. While this reliance poses a challenge, it also presents an excellent opportunity for domestic manufacturers to expand and reduce import dependency.
Both large multinational corporations and MSMEs (Micro, Small & Medium Enterprises) are actively involved in this sector. The pandemic accelerated growth in the industry, providing domestic players — especially engineering-focused MSMEs — an opportunity to establish a global presence.
What’s Driving Growth in India’s Medical Device Industry?
Increasing Demand: The demand for medical devices is rising as India’s healthcare infrastructure expands. By 2030, India’s medical technology sector is projected to reach $50 billion, while the diagnostic device market is expected to grow from $4 billion in 2023 to $6 billion by 2027.
Policy Support: The Indian government has introduced several initiatives to boost the medical device sector. In November 2023, the National Medical Policy outlined six strategic approaches to support industry growth. Additionally, 100% FDI is permitted in this sector, attracting increased investments in devices, consumables, and implants.
Growing Investments: The government has launched a Rs 500 crore ($59.24 million) initiative to promote the medical device industry. Between April 2000 and March 2024, the medical and surgical device sector received $3.28 billion in FDI inflows.
India-Russia Trade Partnership: India and Russia have set a bilateral trade target of $30 billion by 2025, with an additional $5 billion in trade potential in sectors such as pharmaceuticals, medical devices, minerals, steel, and chemicals.
Recent Trends in India’s Medical Device Industry
Big Data & Robotics: Many companies are adopting big data analytics and robotics in medical technology. In July 2022, the Rajiv Gandhi Cancer Institute launched India’s first indigenously developed surgical robotic system. Similarly, Medtronic established a Surgical Robotics Experience Centre (SREC) in Gurugram to advance robotic surgery training.
Startups & Wearable Technology: The sector is witnessing a surge in startups, particularly in wearable medical devices. In December 2023, Health Minister Mansukh Mandaviya launched MedTech Mitra, a platform designed to support medical innovators. The demand for wearables like glucose monitors and fitness trackers is also on the rise.
Impact of COVID-19: During the COVID-19 pandemic, India ramped up the production of PPE kits, masks, ventilators, and sanitisers. Notably, Hindustan Syringes & Medical Devices contributed 1.75 billion syringes out of the 13.3 billion COVID-19 vaccines administered globally.
Key Challenges in the Medical Device Industry
Regulatory Hurdles: India’s medical device industry faces complex regulatory frameworks, making it difficult to introduce new products. Lengthy approval processes delay innovation and product launches, impacting industry growth.
Supply Chain Issues: Supply chain disruptions, raw material shortages, logistics challenges, and global trade uncertainties continue to affect the medical device industry. These challenges became particularly evident during the COVID-19 crisis.
Import Dependence: Despite the sector’s growth, 75-80% of India’s medical devices are still imported from countries like the US, China, and Germany. This dependency increases costs and limits India’s self-reliance.
Lack of Investment: The medical device industry requires substantial investment in raw materials, machinery, skilled labour, and R&D. Insufficient funding limits the sector’s ability to innovate and scale production.
Government Initiatives to Boost the Sector
Medical Device Parks: The government has launched initiatives to establish Medical Device Parks. In March 2024, 27 new bulk drug parks and 13 medical device plants were announced. A major medical device park in Noida is being developed with a Rs 5,250 crore ($705.38 million) investment, expected to generate 20,000 jobs.
Production-Linked Incentive (PLI) Scheme: To enhance medical device manufacturing, the Department of Pharmaceuticals introduced the PLI scheme, allocating Rs 3,420 crore ($468.78 million) for the 2021-28 period. So far, 26 projects have been approved under PLI, attracting Rs 1,206 crore ($147 million) in investments.
What’s in it for Investors?
The Indian medical device market offers attractive investment prospects, supported by 100% FDI approval and government-backed schemes. By 2025, exports are expected to reach $10 billion, reflecting a 104% CAGR growth from 2022 to 2025.
India’s medical device export market is projected to expand from $2.4 billion in 2022 to $10 billion by 2025.
When looking at publicly listed players in the Indian stock market, most are small-cap and micro-cap companies, making investments in this sector high-risk. Thorough research is crucial before investing in any company.
What’s Next?
Currently, India’s medical device industry holds just a 1.5% share of the global market. However, to position India as a global leader in medical device manufacturing and innovation, the government has introduced a comprehensive medical device policy. The goal is to increase India’s global market share to 10-12% over the next 25 years.
Additionally, the diagnostic device market is set to expand from $4 billion in 2023 to $6 billion by 2027.
With government initiatives, rising demand, and technological advancements, India’s medical device industry is poised for significant global expansion. Through medical device parks, the PLI scheme, and increased startup activity, India is moving toward self-sufficiency and a strong global footprint in the sector.
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
