Govt to set up two medical device parks

Sector seen poised for growth; law to be amended

With India importing almost Rs 20,000 crore worth of medical devices every year, the NDA government plans to set up two manufacturing parks in Gujarat and Tamil Nadu exclusively for medical devices like cardiac stents, heart valves, and orthopaedic implants.

While the Tamil Nadu government has already earmarked 400 acres of land in Chengelpattu near Chennai, Gujarat is yet to hand over land, Department of Pharmaceuticals secretary V K Subburaj told Deccan Herald here after the release of a taskforce report on the medical device sector.

These parks would be similar to the special economic zones (SEZs), where setting up of an industry would bring tax incentives. Though there are 800 medical device manufacturers, 90 per cent of them are in the small and medium scale sector, producing disposables and common supplies.

This is because of an inverted duty structure which discourages local manufacturing by making most of the Indian goods more expensive than imports, Rajiv Nath, forum coordinator, Association of Indian Medical Devices Industries, said in a statement.

“To top it, the government went ahead and raised excise duty and  increased service tax in the budget besides quietly raising petrol and diesel prices — all these will further make manufacturing more expensive in India,” Nath added.

Union Minister for Chemicals and Fertilisers Ananth Kumar said he was aware of the problem and has initiated discussions with the union finance ministry on revenue and infrastructure incentives to start manufacturing medical devices here. “We are going to the Mars and moon. It is an irony that we cannot make baby diapers here,” said the minister.
As per government classification, baby diaper is a medical device, albeit a simple one. “In one year, we imported Rs 142 crore worth of baby diapers. On an average we imported baby diapers worth Rs 100 crore till recently. Now there are a few units which make diapers,” Subburaj said.

The taskforce report on medical devices said that almost 65 per cent of Indian medical companies in the niche have annual turnover up to Rs 10 crore, while another 25 per cent have turnovers in the Rs 10 crore–Rs 50 crore range. They only produce high volume, but low value products.

There are only two companies with more than Rs 500 crore turnover, while only three firms have turnovers between Rs 100 crore-Rs 500 crore.There are only five mid-sized companies with annual turnovers of Rs 50 crore-Rs 100 crore.

Ananth Kumar said he has written to the Prime Minister’s Office (PMO) to set up a new department for medical devices as the sector is poised for growth. An amendment to the Drugs and Cosmetics Act, 1940, with a new chapter on medical device is in the offing.