In recent years, profit margins for medical device manufacturers in India have started to erode and are projected to continue their decline. One of the primary reason for this is the growth of the medical device manufacturing industry in emerging markets. While growing populations and higher average income for people in those markets suggests that there is plenty of demand for medical devices, lower cost regional competitors are nipping at the heels of their North American and European counterparts. They have distinct advantages over major medical device companies like Medi Era Life Science because they are intimately familiar with the unique needs of their populations.
India’s Growing Medical Device Industry
A recent Report by a Well known Research Company forecasts the growth of India’s medical device industry at 15 percent annually, which could mean that India’s medical device industry will be worth $8.9 billion by the end of 2020. In order to make sure that medical devices are Manufactured and Sold in India, their government passed a law in 2015 removing the need for companies to seek government approval before making their investments. This law applies to manufacturers of all medical tools, surgical instruments, diagnostic devices and even implants. They also established the National Medical Device Authority, allowing them to regulate the industry separately from the pharmaceutical industry, with the goal of optimizing domestic manufacturing, controlling prices and device quality. Moreover, in 2016, the government also raised import duties on medical devices from five percent to 7.5 percent in order to favor domestic manufacturers. All of these efforts increase the costs for foreign companies to sell into these growing markets. Furthermore, India has been investing in research organizations for developing new devices, increasing future competition in the Indian and global medical device markets.