CII welcomes Cabinet approval to ease FDI norms for medical devices

The Dollar Business Bureau The Confederation of Indian Industry (CII) has welcomed the Cabinet approval of 100% FDI for medical devices under the ‘automatic route.’ This move would encourage manufacturing of equipment, including diagnostic kits and other devices, and support the “Make in India” initiative of the government, according to CII. Chandrajit Banerjee, Director General, CII said that this approval would meet a long standing need for local manufacturing and technology infusion in the sector. The figures, as released by the Department of Industrial Policy and Promotion (DIPP), show that in the period April 2000 to June 2012, when Drugs and Pharmaceuticals witnessed FDI inflows of around $9.66 billion, Medical and Surgical appliance had FDI inflows of $523 million only. The main reason for this scant FDI was that medical devices (as drugs) had to go through the tedious FIPB route which was a time and resource consuming affair, but this will change now, said the government. “So far both in greenfield and brownfield projects, 100% FDI is allowed. Within the same category, a distinct new sub-category has been carved out with regard to medical devices,” Finance Minister Arun Jaitley had said earlier this week. Medical devices include any instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including the software intended by its manufacturer to be used specially for human beings or animals for one or more of the specific purposes. The green field sector of medical devices by being clubbed with the Drugs and Pharmaceutical sector languished and accounted in India for as little as $2.5 billion (including exports). This was only 1% of the World Market (the world market being $250 billion) as compared to the Indian Drugs and Pharmaceuticals sector which stood at $20 billion (including exports) accounting for 7% of the World Pharmaceutical market estimated at around $300 billion, according to CII.      

 This article was published on December 26, 2014.