India to Offer 20% Capital Subsidy Scheme to Boost Domestic Medtech Component Manufacturing

Pharma Secretary Chawla revealed that the government is poised to offer a 20% capital subsidy on marginal investments to select companies committed to manufacturing critical components for medical imaging devices.

The Indian government is planning to introduce a new incentive scheme to boost domestic production of medical technology components, such as those used in digital X-rays, CT scans, and MRI machines, which are currently heavily reliant on imports.

Pharma Secretary Arunish Chawla, speaking at a recent event revealed that the government is poised to offer a 20% capital subsidy on marginal investments to select companies committed to manufacturing critical components for medical imaging devices.

“One of the incentives being planned is to give 20% capital subsidy on marginal investment to select companies that are investing in manufacturing of components that are necessary to make digital X-ray, CT scan, MRI and other such devices,” Chawla said.

This move is expected to reduce the cost of these devices and, consequently, the cost of medical imaging services across the country.

In the Union Budget 2024-25, the government also announced a reduction in customs duty on key components such as X-ray tubes and flat-panel detectors, which are essential for digital X-ray machines.

This follows the introduction of a Phased Manufacturing Programme (PMP) by the Department of Pharmaceuticals in January 2021, aimed at promoting the local manufacturing of medical X-ray machines and their sub-assemblies.

The PMP initially proposed tariff changes in a phased manner to encourage domestic production.

However, industry representatives have highlighted that India currently lacks sufficient manufacturing capacity for X-ray tubes and flat-panel detectors, leading to a request for a revision of the PMP schedule.

An official source stated that it may take at least two years to establish adequate domestic capacity to meet the country's needs.

Consequently, the Department of Pharmaceuticals has requested revised rates, which have now been approved by the Revenue Department.

According to Dr Harsh Mahajan, Chairman of Mahajan Imaging and Chair of FICCI's Health Services Committee, the current reliance on imported digital X-ray machines from the US and China drives costs up, with prices ranging from INR 18 Lakh to over INR 1 Cr.

He emphasized that domestic production could significantly reduce these costs, enhance affordability, and improve the availability of such devices, especially in primary health centers across India.

While India is a global leader in the pharmaceutical sector, known for its generic medicines and low-cost vaccines, it remains heavily dependent on imports in the medical devices market, with nearly 70% of its products sourced from other countries.

The new subsidy scheme is expected to bolster the country’s efforts to develop a self-reliant medtech industry and reduce its dependence on foreign imports.