The Department of Pharmaceuticals has underscored the need for the Indian medical devices sector to transition from basic assembly operations toward deeper local value addition and component manufacturing. Speaking at the CII Global MedTech Summit, Department of Pharmaceuticals Secretary Manoj Joshi stated that while imports of medical devices have not grown—partly due to classification methods—many local factories currently function primarily as assembly lines.
Over the past five to seven years, a significant shift has occurred from direct imports to assembly within the country. However, the government aims to encourage higher domestic value addition over time. Joshi noted that authorities would like to incentivize companies that started with low domestic value addition to reach 40 to 45 percent value addition, with a particular focus on providing substantial incentives for component makers compared to assembly operations.
Addressing the Production Linked Incentive (PLI) scheme for medical devices, Joshi acknowledged that while a large number of companies made investments, only a few are currently receiving incentives. The government is examining ways to address this gap for existing investors. Potential solutions under consideration include providing a longer timeframe and extending the existing scheme to enable companies that have already invested—but could not claim incentives for various reasons—to qualify. Joshi stated that the government is reviewing these challenges and welcomes industry inputs.
The PLI Scheme for Promoting Domestic Manufacturing of Medical Devices carries a total financial outlay of Rs 3,420 crore with a production tenure spanning from fiscal year 2023 to fiscal year 2027. Under this framework, selected companies received incentives at a rate of 5 percent on incremental sales of medical devices manufactured in India across four target segments, spanning a period of five years.
In addition to manufacturing depth, Joshi highlighted a current shortfall in product testing within the domestic ecosystem. He stressed the importance of rigorous testing for both prototype and commercially manufactured medical products, noting that this critical stage requires greater attention moving forward.
"The shift from mere assembly to deep component manufacturing is a critical maturity milestone for India's medical devices sector. As the government explores ways to refine the PLI framework and extend support to investors who missed initial benchmarks, domestic manufacturers have a valuable opportunity to build local supply chains. Strengthening local value addition and testing infrastructure will be essential for long-term sustainability and global competitiveness." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
