India’s medical device sector is projected to expand at a rate of 28% per year and reach $50 billion by 2030. Several Indian businesses prioritize end-to-end product development in an effort to move up the value chain and generate innovation. India is becoming an important destination for many international companies that manufacture and create medical equipment. The transition to an end-to-end product development hub will depend on skilled workforce availability, government incentives, and industry-academia relationships. The government recently proposed interventions to promote R&D in the medtech sector.
The potential for growth in the medical devices sector in India is immense. Forecasts from the Government of India predict that the industry will expand at a rate of 28% annually, reaching a value of USD 50 billion by 2030. Although the sector currently only accounts for 1.5% of the worldwide market for medical devices, these estimates are highly optimistic.
Exporting manufactured products is one way to drive growth, but delivering innovation and moving up the value chain is another opportunity that India cannot afford to miss. India’s favorable conditions have led many industries to focus on end-to-end product development, including the medical devices sector.
In 1991, economic liberalization led to the takeoff of the IT services sector, and many multinational companies (MNCs) established their global technology center (GTC) hubs in India. Indian talent gained global recognition, and the country became an outsourcing hub for these MNCs’ R&D jobs, initially fueled by the Y2K problem. Eventually, the sector progressed from performing only repetitive engineering tasks to project definition and ownership. Recently, many overseas companies have leveraged India’s Engineering Research and Development (ER&D) capabilities by making India the global product ownership hub.
Today, India has emerged as one of the largest automobile exporters in the world, in addition to having a large domestic market. The flourishing automobile and heavy engineering sectors in India have spawned a wide supply base for components and sub-assembly parts, which bodes well for the country’s manufacturing future. Driven by Make in India, many global automotive companies have made India their export hub and are expanding their R&D capabilities here.
The same is true for the medtech sector too. India is becoming the center for manufacturing and innovation for items that serve both domestic and international markets, despite its quantities being lower than in some industries. In addition, several businesses have begun to emphasize India as a center for producing parts for assembly facilities around the world.
While these are early trends, they are also firm strides that India is taking in both manufacturing and innovation to pave the way for in-country end-to-end product development. The rise of the start-up ecosystem in the country and homegrown entrepreneurs are also boosting this trend.
Depending on how a few crucial factors develop in the future, the shift to an end-to-end product development hub will occur. Unquestionably, one of the major elements fueling the phenomenal expansion in various sectors is the accessibility of a trained workforce. Nevertheless, the talent pipeline must be developed enough to match that kind of demand when it comes to stepping up and delivering on innovation. One of the challenges that organizations face is the tendency for frequent job-hopping amongst the talent pool. Closer industry-academia relationships also play a critical role in ensuring the availability of talent that are job ready from day one. Additionally, India needs to focus on developing new competencies/capabilities like global product managers, end-to-end (E2E) program managers, specific sector skills like clinical competencies for healthcare, and so on.
Government incentives have played an important role in sectorial growth in the last three decades. However, more is needed to accelerate the transition for India to a global innovation hub. The government needs to introduce more programs both for manufacturing and R&D, such as policies around component manufacturing incentives and incentives for R&D.
There was some heartening news recently during the Union Budget where the Government of India announced some proposed fiscal and non-fiscal interventions to promote R&D in the medtech sector. With the right policies in place and a strong focus on strengthening the R&D sector, India possesses all the necessary components to lead the world in production and innovation.
