The draft proposes hospitals procure a portion of their equipment from local firms © PA Images
The draft proposes hospitals procure a portion of their equipment from local firms © PA Images

India plans to limit medical imports with local content rules

21 March 2018

India is planning to limit the proportion of medical devices it imports from foreign manufacturers in support of prime minister Narendra Modi’s Make in India campaign.

The Department of Pharmaceuticals (DoP) has released a set of draft guidelines, created to give preference to products made in India. 

The draft Medical Devices Preferential Market Access (PMA) guidelines propose that implants, hospital equipment and medical devices “have a minimum local content ranging from 25-50% to qualify for public procurement”.

Under the guidelines, public programmes would have to procure at least 50% of their medical disposables and consumables and 40% of their implants from local manufacturers.

For medical electronics, hospital equipment, surgical instruments and diagnostic reagents, a minimum of 25% would have to be procured from local firms. 

The DoP said the guidelines were based on its current understanding of the medical device market in India and that it would revisit and revise the rules “after one year or as soon as the relevant data in this regard becomes available, whichever is easier”.

It added that the aim of the measures would to be to encourage global medical technology companies to set up manufacturing in India.

It said it is seeking comments on the draft from all stakeholders by 5 April.

The DoP’s draft proposals build on a broader document released last year by the Department of Industrial Policy and Promotion (DIPP) to support the Make in India campaigned launched by Modi in 2014. 

The DIPP’s Public Procurement (Preference to Make in India) Order, 2017 ordered government departments to prioritise local companies, either by cutting foreign businesses out of the tendering process entirely or capping the proportion of the contract they could win.

Responding to the draft, lobby group Medical Technology Association of India said without measures from the government to create an ecosystem for local components, clinical trials and product development, global medical technology companies would be reluctant to make high risk products like pacemakers, vascular grafts and heart lung machines. 

“Unlike several other sectors, medical devices are comprised of thousands of very varied products that significantly differ from each other in engineering and design complexity and some of these segments are far from having an environment to manufacture them locally,” it said.

“A uniform 50% local content ask, preceding any meaningful scaling up of the missing sophisticated component ecosystem, will create a risk of ‘garage manufacturing’ with low cost.”

Rajiv Nath, forum coordinator of The Association of Indian Medical Device, said the draft was a “lost opportunity” and lacked measures to encourage local producers.

“The Draft PMA policy in its present form does not provide preferential pricing to Indian manufacturers, no incentives on maintaining and improving quality or indigenous development,” he said.

“It doesn’t provide for any corpus for ensuring no late payments by government – such a corpus would be necessary to ward off any adverse impact on financials of a company in case of delayed payments by the government.” 

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