By Sunil Tyagi and Anu Chowdhry
In the Indo-U.S. Joint Statement released for the January 2015 visit of the U.S. President to India, bilateral collaboration in medical devices, pharmaceuticals, biotechnology and health-related information technology occupies prime position. Other healthcare agendas in the Joint Statement include completion of a Memorandum of Understanding among the Indian Ministry of Health & Family Welfare, the Indian Department of Biotechnology, the Indian Council of Medical Research, the All India Institute of Medical Sciences, the U.S National Institute of Health and National Cancer Institute and the upcoming completion of an Environmental Health, Occupational Health and Injury Prevention as well as a Control MoU between the U.S. Centres for Disease Control and Prevention and the Indian Council for Medical Research.
India’s total revenue potential for electronic medical devices is estimated at $ 6.4 billion for 2020. In an Executive Briefing in June, 2010, the United States International Trade Commission (USITC) noted that India’s market for orthopaedic devices alone is expected to touch $600 million by 2015, attributable to an increasing elderly population that is projected to reach nearly 200 million by 2025. Healthcare companies in the U.S. have begun to tap into this market by forming strategic alliances with Indian entities. For instance in October 2013, Minneapolis-based Medtronic, the world’s largest maker of heart rhythm devices, announced its entry in the kidney dialysis business in collaboration with India’s Apollo Hospitals Enterprise Limited, and dedicated an investment of $24 million towards research, development and manufacturing in India. GE Healthcare (healthcare division of American conglomerate General Electric) has set up three manufacturing plants in the State of Karnataka, invested $500 million towards R&D in these facilities and has plans to introduce low-cost portable ultrasound machines in India. Predominant factors attracting such large-scale investment include focus on health insurance coverage and preventive care, rising demand for better medical infrastructure and specialized facilities, as well as growth of medical tourism. Despite the favourable outlook for India’s medical device industry and the U.S. being considered a world leader in medical device innovation, foreign investors are yet to leverage these opportunities – a key reason being that although previous Foreign Direct Investment (FDI) policies permitted FDI in medical devices, separate norms for the sector had not been explicitly provided for. Continue reading