Budget Announcements on Healthcare Sector to Medical Device Sector

Budget Announcements on Healthcare and Medical Device Sectors in India:

The Union Budget presented by the Indian government annually often contains significant announcements related to the healthcare sector, which includes provisions and measures that directly or indirectly impact the medical device industry. Over recent years, India has been focusing on strengthening its healthcare infrastructure, increasing accessibility, and improving affordability, which directly influences the medical device sector. Key budgetary announcements focus on infrastructure development, innovation, regulatory reforms, research, and incentives for domestic manufacturing.

Here are some of the major budget announcements in recent years and how they have impacted both the healthcare and medical device sectors in India:

1. Expansion of Healthcare Infrastructure:

• Key Announcement: The Indian government has consistently increased allocation for healthcare, with a strong emphasis on healthcare infrastructure, including the PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM).
• Impact on Medical Devices: Increased investment in healthcare infrastructure such as hospitals, diagnostic centers, and medical facilities boosts demand for medical devices like diagnostic equipment, patient monitoring systems, ventilators, and medical consumables. This increase in healthcare expenditure leads to greater demand for medical devices both in public and private sectors.

2. Promotion of Domestic Manufacturing of Medical Devices:

• Key Announcement: The government has introduced measures to promote domestic manufacturing under the Atma Nirbhar Bharat (Self-Reliant India) initiative, including the Production Linked Incentive (PLI) scheme for the medical devices sector.
• Impact on Medical Devices: The introduction of the PLI scheme has been crucial in promoting the local manufacturing of medical devices. The scheme offers incentives to manufacturers for producing high-quality medical devices in India, which helps reduce dependence on imports, enhances export potential, and creates jobs in the medical device sector. This is in line with the government’s aim to reduce India’s reliance on imports for medical equipment, particularly in areas like surgical instruments, diagnostic equipment, and orthopedic devices.

3. National Digital Health Mission (NDHM):

• Key Announcement: The Union Budget has often highlighted the importance of digital health, including the National Digital Health Mission (NDHM), which aims to create a digital health ecosystem across India.
• Impact on Medical Devices: With the advent of digital health, the medical device sector is witnessing the growth of connected devices and healthtech innovations, including telemedicine, wearables, remote monitoring devices, and patient data management systems. The government’s push for telemedicine and digital healthcare opens up new avenues for medical device companies to integrate their products into the digital healthcare ecosystem, fostering growth for companies in health monitoring, wearables, and mobile health devices.

4. Increased Focus on Research and Development (R&D):

• Key Announcement: The government has increased its focus on research and innovation in healthcare, including incentivizing public-private partnerships (PPP) for R&D in medical technologies and promoting innovation through various schemes.
• Impact on Medical Devices: This focus on R&D provides a boost to the medical device innovation ecosystem in India. Domestic medical device manufacturers and startups now have better access to funding and partnerships to develop cutting-edge devices. It also creates opportunities for collaboration with global players and research institutions to develop next-generation medical devices. Additionally, tax incentives and grants for R&D activities help reduce the financial burden on innovators.

5. Reduction in Customs Duties for Medical Devices:

• Key Announcement: The government has periodically reduced customs duties on medical devices to make them more affordable for both manufacturers and consumers.
• Impact on Medical Devices: Lowering of customs duties on imported medical devices, raw materials, and components helps bring down the cost of production for medical device manufacturers in India. This creates an opportunity for cost-effective manufacturing, which can result in lower prices for medical devices, thereby improving accessibility to healthcare services for the Indian population. This is especially important in areas like diagnostic devices, surgical instruments, and prosthetics.

6. Strengthening the Medical Device Regulatory Framework:

• Key Announcement: In recent budgets, there has been an emphasis on strengthening the regulatory framework for medical devices, including the National Medical Devices Policy and the Medical Device Rules (MDR), which include tighter regulations on the import and manufacture of medical devices.
• Impact on Medical Devices: The MDR 2017 and subsequent amendments to the Medical Device Rules are part of the government’s push to ensure that medical devices meet international standards for safety and quality. Budget announcements related to strengthening the regulatory framework give the industry greater confidence to invest in new technologies, knowing that regulatory standards are clear and predictable. This also ensures patient safety and enhances the credibility of Indian medical devices both in the domestic and international markets.

7. Promotion of the Medical Device Industry as a Priority Sector:

• Key Announcement: The government has been making efforts to include the medical device sector as a priority area for investment and development.
• Impact on Medical Devices: By recognizing the medical device industry as a priority sector, the government has enhanced access to finance, including low-interest loans and subsidies for the establishment of manufacturing plants. Additionally, the National Policy for the Medical Device Sector has been aligned with the government’s broader goals for Make in India, driving investment into infrastructure, regulatory support, and innovation.

8. Launch of the “Atma Nirbhar Bharat” Campaign:

• Key Announcement: Under the Aatmanirbhar Bharat campaign, the Indian government has been encouraging self-reliance in critical medical sectors, including the manufacture of medical devices.
• Impact on Medical Devices: Aimed at encouraging indigenous manufacturing, the government has rolled out various PLI schemes, tax incentives, and subsidy schemes for medical device manufacturers. This reduces India’s dependency on foreign imports for devices, especially in critical sectors like diagnostic equipment, surgical instruments, and orthopedic devices. As a result, there is a greater focus on building a self-sustained supply chain for medical devices within the country.

9. Support for Startups in Healthcare:

• Key Announcement: The government has emphasized support for healthcare startups through tax incentives, funding support, and recognition of their role in transforming the sector.
• Impact on Medical Devices: Startups in the healthtech and medtech sectors play a vital role in medical device innovation. Budget announcements aimed at promoting healthcare startups have led to greater investments in the medical device sector, fostering the development of new and affordable solutions for the Indian market. Government-backed incubators, funds, and accelerators encourage young innovators to create new solutions in areas like diagnostic technologies, wearables, and digital health solutions.

10. Universal Health Coverage (UHC) and Ayushman Bharat Scheme:

• Key Announcement: Increased funding for Ayushman Bharat and the National Health Protection Scheme (NHPS) to provide healthcare coverage to low-income families.
• Impact on Medical Devices: With the rise of Ayushman Bharat, the demand for medical devices has increased, especially for preventive diagnostics and treatment devices. This has resulted in an increased market for affordable medical devices such as diagnostic kits, imaging devices, and laboratory equipment, which are required for mass healthcare services. Moreover, the focus on universal health coverage and the integration of digital health solutions opens new doors for the medical device sector.