Local assembly and manufacturing India
Establishing the right network is the basis for successful local operations.
In the recent years, governments and companies have begun to localize their supply chains.
Production is set-up in different locations globally to minimize costs, be closer to the customer (note that India has a huge domestic market), have less exposure to possible risks and have a better controlled answer to public health disruptions.
The India government has implemented policies to promote localisation with the objective to get a bigger percentage of the global value chain, further diversify their economies and minimize the risk of external macroeconomic shocks. There are a few factors driving this change:
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India government prioritizes local initiatives which will create employment and generate added value in India itself
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Customers prefer locally produced products
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Improvements in technologies (e.g., a higher level of automation in production, increased digitalization)
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Improved logistics infrastructure
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The recently approved National Medical Devices policy aims to accelerate the growth of the India medical devices sector while not conforming on safety and quality.
The policy is demonstrating the relentless efforts of the Indian government to make the so called ‘Make in India’ program a success. It focuses among others on access to affordable and quality medical devices, patient-centered and quality care, preventive health, research and innovation (centers of excellence exploring areas like AI, IoT, Nanotechnology) and skilled manpower. ​
Under the ‘Make in India’ government program, medical devices has been identified as one of the priority sectors. This means that the government is actively supporting the development of an Indian based manufacturing ecosystem. This initiative can also support foreign manufacturers when they plan to have medical devices or IVD assembled or manufactured locally, considering local partnerships. This could have enormous benefits like reducing manufacturing and logistics costs, getting priority in tenders and receiving government funding.
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The government is promoting so-called medical device manufacturing parks. These parks will provide the necessary infrastructure and supporting facilities for both medical device manufacturers as well as supply-chain companies. The advantage is that there are many candidates for assembly to choose from (including 3D printing and so on if that would be required) and opportunities to start own manufacturing operations. Besides that, labor is available in large quantities at relatively low costs while having a relatively strong technology basis. Knowing that almost 80% of medical devices is still imported, this offers a huge opportunity for foreign manufacturers and will result in a shift to assembly and/or manufacturing in India away from a pure importation and sales model.
The production linked incentives scheme (PLI) for medical devices and IVD manufacturing proposes a “financial incentive to boost domestic manufacturing and attract large investments in medical devices segments such as cancer care devices, radiology and imaging devices, anaesthetics devices, implants etcetera”. Under the PLI scheme, domestic manufacturing of high-end medical devices has started which includes MRI Scan, CT-Scan, Mammogram, C-Arm, MRI Coils, high end X-ray tubes, etcetera.
The National Medical Devices Policy is expected to facilitate an orderly growth of the medical device sector to meet the public health objectives of access, affordability, quality and innovation. Foreign manufacturers resources, capabilities, knowledge and products are vital in this.
Several factors contribute to India being an excellent location for producing medical devices:
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Presence of a large, qualified, experienced engineering workforce
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Government supported programs and assistance for the medical technology sector. There is the Goods and Services Tax (GST), a single national tax structure facilitating the industry. Besides that, multiple medical device and diagnostics parks are being established in among others Telangana, Tamil Nadu, and Kerala to provide a plug-and-play framework for businesses wishing to establish manufacturing operations in India, lowering the price of manufacturing devices and IVD. A National Medical Device Authority (NMDA) is also being proposed, which will enhance manufacturing procedures and regulate quality
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​Effective operations due to cheaper labor and raw material costs and experience in implementing new engineering technology
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Data security and sensitivity to intellectual property rights in line with international standards
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A strong ecosystem that supports the production. Adoption of newest technologies, AI, autonomous robotics, and other smart manufacturing technologies has increased
