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New Delhi: Amid the efforts of reducing import dependency in medical devices, the additional requirements for unlocking the production-linked incentives and underutilisation of infrastructure — including dedicated MedTech parks — is holding back the potential of India’s medical technology industry, said a BCG report.
According to the report titled: “Unlocking ‘India for the World’ in MedTech” owing to high incremental revenue threshold, the Production Linked Incentive (PLI) funds allocated for the MedTech sector are “majorly skewed towards large players, while MSMEs have limited participation.”
“Secondly, the high upfront capex for new plants makes participation largely out of reach and discourages smaller players,” it added
Quoting an industry executive without disclosing his/her name it notes that, the PLI scheme has an incremental sales criteria of Rs 60 crores which small players are “unable to full fill” and the scheme is not able to produce the ‘expected results.’
Under the PLI scheme, the incremental revenue threshold refers to the minimum year-on-year increase in sales that a company must achieve to qualify for incentive payouts and the government releases an incentive of 4-6 per cent on incremental revenue on the base year.
Meanwhile on MedTech parks, BCG notes that utilization remains low at an average rate of 54 per cent at upper limit, where mature clusters like Andhra Pradesh MedTech Zone (AMTZ) have an occupancy of “70 per cent occupancy,” the other developing ones in Tamil Nadu, Telangana have reported an occupancy of 40–60 per cent.
Due to limited high-end infrastructure and persistent implementation delays MedTech parks and clusters are “underutilised” and so far had a “mixed success,”, it stated adding that Medtech clusters in India lacks a proper marketing strategy to attract additional companies and multinational players.
As per BCG, the parks which are developed and maintained by states such as Gujarat, Telangana are “less attractive” over the join establishments in Andhra, (AMTZ) Tamil Nadu as they receive both central and state funds.
However, several initiatives have helped to produced some initial gains and according to the presented analysis, from FY 2021-2022 exports of the industry have increased from $2.9 billion to $3.8 billion in 2023-24, imports have reported a marginal uptick rising from $8.1 billion to $8.5 billion during the same period.
The volume of imports has also reduced by 20 percentage points to 60 per cent against the total domestic market size, however a large base in accounted by low-end high volume devices as the the production of high-end devices has scaled is yet to pick-up.
The slow progress in high-end devices is attributed with limited foundries for medical grade cobalt/chromium/steel
As per the analysis, the criteria for incremental sales becomes more challenging in case of high-end products like CT, MRI, LINAC etc as they require a high-capex and the required incremental sales for a five year term rises from Rs 60 crore to nearly Rs 280 crore while small players in medtech are estimated to have an annual of Rs 50-100 crore.
Meanwhile for lower-end products like syringes, needles, X-ray tubes, the incremental sales requirement floats in the range of Rs 20-29 crore for the same five year tenure along with their advantage of low capex.
- Published On Aug 30, 2025 at 07:22 AM IST
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