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Uttar Pradesh Poised to Emerge ‘Medical Devices Manufacturing Hub’ by 2020: ASSOCHAM Study

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Uttar Pradesh is fast emerging as a cost-effective manufacturing centre for medical and dental instruments owing to significant availability of trained manpower including labours and technicians, reveals a study by apex industry body ASSOCHAM.

“UP could emerge as a hub for medical devices manufacturing by 2020 if an incentive package by way of tax concessions was made available to the industry in the state,” said DS Rawat, national secretary general of Associated Chambers of Commerce and Industry of India (ASSOCHAM) while releasing the study titled ‘Indian Medical Devices Industry: The way ahead.

“Present landscape of India’s medical devices industry is primarily import driven as imports contribute almost 75 per cent of the market, as such there is a significant opportunity for UP in terms of developing domestic manufacturing capabilities for ensuring the nation’s health security by setting up green-field medical devices and equipment parks across the state,” said Rawat.

“UP also holds significant potential to attract foreign direct investment in medical devices manufacturing,” he added. With 33 factories in medical and dental instruments and supplies sector operating in UP, the state holds second highest share of over 10 per cent in total 316 such factories that are under operation across India after Gujarat (18 per cent share), noted the ASSOCHAM study.

UP holds second highest share of about 12 per cent and 25 per cent in terms of direct and indirect employment generated by medical and dental instrument factories operating throughout the country.

“With a turnover of over Rs 568 crore, medical and dental equipment sector in UP acquired third highest share of about 11 per cent in the total output worth about Rs 5,300 crore generated by the industry across India after Karnataka (25 per cent share) and Haryana (22 per cent share),” highlighted the ASSOCHAM study.

The study is based on an analysis of the state-wise distribution of manufacturers of medical and dental instruments and supplies in the country by ASSOCHAM Economic Research Bureau (AERB) based on data complied as part of Annual Survey of Industries 2011-12 conducted by the Government of India.

Clocking a compounded annual growth rate (CAGR) of over 15 per cent, imports of medical devices and equipments in India is likely to cross $4 billion mark by 2018-19 from a level of about $2.3 billion as of 2013-14.

Growth of medical goods’ exports to India is expected to continue as a result of our burgeoning middle class, growing medical tourism industry, swelling private sector healthcare investment, aging population and heightened government commitment to provide health services to the rural population, the study noted.

Absence of a clear and consistent regulatory framework, lack of adequate incentives and funding for manufacturing devices, absence of medical devices’ specific legislation, dearth of trained workforce for maintenance of medical devices, insufficient financing and lack of co-ordination between diverse stakeholders are certain key constraints faced in establishing this industry in India.

It is a high growth segment and increased foreign direct investment (FDI) along with collaborative arrangements to expand domestic manufacturing capacity is imperative for the same, it added. As India’s burden of disease transitions from communicable to non-communicable diseases (NCDs) driven by socio-economic advancements, medical devices will play a critical role in helping their diagnosis and treatment.

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