Small and medium enterprises in the medical devices and technology sector need more focus for the industry to reach its potential, says Himanshu Baid, Managing Director of Poly Medicure, a medical devices maker.
About 60 per cent of the medical technology industry comprises of companies with turnover under Rs. 10 crore, Baid said, adding that only 20 per cent of these had turnover in the range of Rs.10 – 50 crore.
Large companies, with turnover of over Rs. 100 crore, form less than 5 per cent of the industry.
“The Government is not doing enough for the SME sector. In the recent Budget it was said that 15 per cent investment allowance will be given to any company which makes investments of Rs. 25 crore. But how many companies can make such investments?” he asked. Baid said the investment limit for which the Government gives incentives should be lowered to Rs. 2-3 crore so that the SME sector can benefit.
Good potential
“If the SME sector is not given due recognition, our industry structure will collapse. The larger industries also depend on the SME sector,” Baid, also the Co-Chairman of the Medical Equipment Division of the Confederation of Indian Industry (CII), said.
According to a report by CII, to be launched on Wednesday, the medical technology industry, which includes medical devices and diagnostics, has the potential to touch the $50 billion mark by 2025.
Currently, the industry stands at just $6.3 billion.
Pavan Choudary, Chief Executive Officer of Vygon India, and Chairman of the Medical Equipment Division of CII, said while the sector was currently growing at about 10-12 per cent, it had the potential to grow at 20 per cent annually, if given the right policy and fiscal incentives.
Regulatory changes
Choudary said this industry needed regulatory changes, such as foreign direct investment via the automatic route, non-compete clause for joint ventures and a separate regulatory framework (medical technology is currently governed by the same regulations as drugs), besides fiscal incentives for investing in research and development and development of manufacturing hubs among others.
“There was virtually no regulation (of medical technology industry) till 2005 and then there was overkill,” he said, referring to regulatory constraints faced by the industry.
Choudary said Vygon India, a subsidiary of the French medical devices maker Vygon SA, hopes to start a plant in India by 2015, either through a joint venture or on its own.
About 10 per cent of the company’s turnover comes from medical devices produced in India through an OEM.
Baid said Poly Medicure aims at growing upward of 20 per cent of the next fiscal.
The company had posted a turnover of Rs. 320 crore in 2013-14. Business Line
