India’s emergence as one of the top economies in the world calls for a renewed focus on supporting domestic industries, particularly the medical device manufacturing sector. Despite playing a crucial role during the Covid-19 pandemic, when global supply chains were disrupted, the sector still requires a boost to reach its full potential and compete globally.
The Union Budget 2025 laid the groundwork for economic growth by emphasizing a ‘manufacturing mission’ and providing support for MSMEs, startups, and research and development. However, more needs to be done to fulfill the vision outlined in the National Medical Devices Policy 2023. While several states are planning to establish medical devices parks, the sector requires a predictive tariff from the Central government to address India’s significant import dependence in this field.
In order to replicate the success of industries like automobile and mobile phone manufacturing, where high import duties incentivized local production, the medical device sector needs a similar tariff cover. Currently, the import duty on medical devices ranges from 0-7.5%, which is insufficient to encourage domestic manufacturing. Increasing this duty to 5-15% would level the playing field for Indian businesses and drive investments in local production.
Moreover, the high import dependence in the medical device sector poses a threat to the country’s healthcare security. By monitoring and capping the maximum retail prices of imported devices, India can safeguard its healthcare infrastructure and reduce dependency on foreign markets. It is imperative for the government to take proactive measures to promote local manufacturing and transform India into a global hub for medical device production.
Overall, while the recent budget allocations and policy initiatives are steps in the right direction, a more targeted approach is needed to boost the competitiveness of the medical device manufacturing sector in India. By providing the necessary support and incentives, the government can help the industry thrive and contribute to the country’s economic growth.
