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India's medical device industry, with relatively low barriers to entry, is a booming industry expected to reach $50 billion by 2025. Four categories (A, B, C, and D) of medical devices are manufactured in India as per the Global Harmonization Working Group rules.
Manufacturing of high-end medical devices (Class C and D) is dominated by multinational companies with extensive service networks in India. This high-end market is more than 90% dependent on imports and offers ample investment opportunities. On the other hand, Class A and Class B, which are relatively backward in technology, are mainly produced by domestic manufacturers. Most of these Indian manufacturers are micro, small and medium enterprises (MSMEs) with an average turnover of $45-500 million.
As a net importer of medical equipment, India is particularly dependent on importing high-tech medical products such as cancer diagnostics, medical imaging tools, ultrasound scans and PCR technology. The main challenge facing the Indian medical device industry remains the high cost of local manufacturing relative to competing economies due to lack of adequate infrastructure, inadequate domestic supply chain and logistics, high financing costs, shortage of quality human capital, limited design capabilities, and Gaps in research and development (R&D).
With huge demand and rather tight supply, the medical devices market presents great investment opportunities for investors. India allows 100% FDI in the medical device sector through the automatic route. The diagnostics market in India is expected to grow at a CAGR of 20.4% to reach USD 32 billion by 2022, a considerable increase from the valuation of USD 4 billion in 2019. The organized sector has a share of approximately 25% in the field of diagnostics (15% in laboratories and 10% in radiology).
Although the segment is currently largely fragmented, large investors are building a hub-and-spoke structure, thereby consolidating the industry. In addition, the new Clinical Establishment (Central Government) Rules in 2019 will also bring standardization and better quality. Over the next few years, this segment is expected to witness growth, presenting significant opportunities for investors.
In addition, new concepts of micro-diagnostics are gaining popularity. With advances in technology, many diseases can now be diagnosed more cheaply with the help of small handheld devices or smartphone attachments. The capabilities of such devices have grown exponentially, as has their potential to diagnose a large number of diseases at once and at low cost.
Medical Internship
Medical tourism is rapidly growing as an attractive segment of the Indian healthcare industry. India's medical tourism industry was worth about $9 billion in 2020, before the pandemic hit, and is expected to grow to $13 billion by 2022. In fact, in 2017, India ranked seventh among the top 20 wellness travel markets globally and top ten wellness travel markets in the Asia-Pacific region. The number of Foreign Tourists (FTAs) arriving in India on medical visas increased from 184,298 in 2014 to an estimated 697,000 in 2019.
Major contributing factors include the presence of world-class hospitals and skilled medical professionals, quality healthcare, low cost of treatment compared to other countries, credibility of alternative medicine systems, and global appreciation for wellness services such as yoga and meditation Increase in demand.
India has around 37 Joint Commission International (JCI) accredited hospitals and 513 National Board of Hospitals and Healthcare Providers (NABH) accredited hospitals.