ISID‐PHFI Collaborative Research Programme
Working Paper Series 02
MEDICAL DEVICES
MANUFACTURING INDUSTRY IN INDIA
Market Structure, Import Intensity
and Regulatory Mechanisms
Pritam Datta
Indranil Mukhopadhyay
Sakthivel Selvaraj
ISID‐PHFI Collaborative Research Centre
Institute for Studies in Industrial Development
4, Institutional Area, Vasant Kunj Phase II, New Delhi ‐ 110 070
Phone: +91 11 2676 4600 / 2689 1111; Fax: +91 11 2612 2448
E‐mail: [email protected]; Website: http://isid.org.in
March 2013

© Institute for Studies in Industrial Development, 2013
ISID Working Papers are meant to disseminate the tentative results
and findings obtained from the ongoing research activities at the
Institute and to attract comments and suggestions which may kindly
be addressed to the author(s).

CONTENTS
Abstract 1
Section‐I Introduction 2
Section‐II Methodology 3
Section‐III Structure of Indian Medical Devices Manufacturing
Industry 7
Section‐IV International Trade on Medical Devices 12
Section‐V Structure and Patterns of Production and Trade
of Medical Devices in India 14
Section‐VI Discussion and Conclusion 22
References 24
List of Tables
Table‐1 Medical Devices Manufacturing Industry
as per NIC (2008) System 4
Table‐2 NIC 2008‐2004 Concordance for Medical Devices Industry 5
Table‐3 ASICC‐ITC (HS) Concordance Mapping Medical Devices
Manufacturing Industry 6
Table‐4 Production of Medical Devices in India:
Some Basic Characteristics 8
Table‐5 Medical and Other Profile of Indian Medical
Devices Industry: Year 11
Table‐6 Top Twenty Products in Domestic Production Market
and their Share in Value Output 17
Table‐7 Top Twenty Exports and Imports of Medical Devices:
Average Share between 2006‐07 and 2009‐10 18
Table‐8 Top Twenty Imported and Indigenous Inputs Used
in the Production of Medical Devices 20

List of Figures
Figure‐1 Share of Skilled Labour in Work Force 9
Figure‐2 Capital Labour Ratio (Capital Intensity) of Medical Devices
and Total Registered Manufacturing Sector 10
Figure‐3 Indiaʹs Share in Global Import of Medical Devices: 1995‐2011 12
Figure‐4 Growth Rates of Production, Export and Import of Medical
Devices (Constant Prices) 13
Figure‐5 Domestic Production: Broad Categories 15
Figure‐6a Share of Major Categories of Import 16
Figure‐6b Share of Major Categories of Exports 17
Figure‐7 Import of Some Electro‐Diagnostic Equipment (Quantity) 21

MEDICAL DEVICES
MANUFACTURING INDUSTRY IN INDIA
Market Structure, Import Intensity
and Regulatory Mechanisms
Pritam Datta*
Indranil Mukhopadhyay**
Sakthivel Selvaraj***
[Abstract: India is one of the top twenty markets for medical devices in the world.
Regulatory structures were virtually absent until some rudimentary control was
initiated by Government of India in 2005. Experiences of OECD countries suggest
that with increasing dependence on medical technology in health, costs of health
care provisioning have gone up significantly. While India is planning to embark
upon Universal Health Coverage mechanism regulation of imports, production and
use of medical technologies would be one of the most challenging tasks before the
government. This paper tries to analyze the supply side of the Indian medical
devices industry in this conjuncture. The attempt is to study the trends and
patterns of domestic production over the period 2004‐05 to 2009‐10. Similarly,
trends of import and export have been studied for the period 2000‐01 to 2011‐12.
The paper also attempts to review the existing regulatory mechanisms relevant for
the medical device industry in India. Domestic production capacity has been
analysed using unit records of the Annual Survey of Industry (ASI); while trends
in import and export have been studied using India trade data provided by CMIE
and Export Import Data by Department of Commerce, Government of India. The
findings of the study shows that domestic production of medical devices is diverse in
character, producing range of devices starting from the small accessories and
disposables like needs and syringes to sophisticated X‐Ray equipment. However,
there is an overwhelming dominance of medical disposables in product mix, whereas
high end equipment are generally imported.]
* Pritam Datta is a Research Associate at Public Health Foundation of India
(PHFI), New Delhi. E‐mail: [email protected]
** Indranil Mukhopadhyay, is a Senior Research Associate at PHFI, New Delhi.
E‐mail: [email protected]
*** Sakthivel Selvaraj, is a Senior Public Health Specialist (Health Economics) at
PHFI, New Delhi. E‐mail: [email protected]

2
Section‐I
Introduction
Medical devices industry in India is very tinny by size as compared to
registered manufacturing industry, though, India is one of the top twenty
markets for medical devices in the world. Market for medical devices was
around `13,000 crores in 2009‐10. Regulatory structures were virtually
absent until some rudimentary control was initiated by Government of
India in 2005. Experiences of OECD countries suggest that with increasing
dependence on medical technology in health, costs of health care
provisioning have gone up significantly. Developing countries like India
have much to gain from effective use of advanced medical technology but
on the other hand inefficient and unregulated use of expensive medical
devices may also cause medical expenditure inflation in the country.
Effective regulation of medical devices industry is important at a juncture
when India is planning to embark upon Universal Health Coverage
mechanism regulation of imports, production and use of medical
technologies would be one of the most challenging tasks before the
government. In the context of India, on one hand with the increase in private
providers of health services, use of high tech medical devices increasing; on
the other hand most of domestic manufacturers produce at the low tech and
disposable and supplies end of the market. Inflation in health expenditure
because of over use of import intensive medical devices can act as a major
barrier to access to health care in a country like India, where only a fifth of
total health expenditure is public funded and more than ninety five per cent
of private health expenditure is out of pocket expenditure. Whether
diffusion of health technology will help in enhancing access to health care or
only add fuel to inflation of medical expenses would critically depend on
three basic factors, viz. domestic production capacity, market structure of the
domestic production, import intensity and government regulation over the
industry. There is a dearth of literature on these aspects of medical devices
industry in recent years. This paper attempts to bridge this literature gap by
analyzing the Indian medical devices manufacturing industry from supply
side. Section‐II describes the methodological issues, the data sources and
variables used in the study. Size and market structure of the domestic
manufacturing of medical devices industry in India is explained and
analyzed in section‐III. Trade intensity of Indian medical devices
manufacturing industry is captured in Section‐IV. We would like to
compare the structure and pattern of domestic production, import and
export in Section‐V followed by discussion and conclusion in Section‐VI.

3
Section‐II
Methodology
Fundamental aim of this research piece is to analyze both domestic
production and trade profile of the Indian medical devices industry in detail
using unit level disaggregated figures from Annual Survey of Industries
(CSO1) and India Trade data (CMIE2). Using National Industrial
Classification (NIC) one can identify the profile of domestic production for
any particular industrial activity. For example if you want to know the
domestic production profile of manufacture of pharmaceuticals, medicinal
chemical and botanical products, we can pull the data for units fall under
National Industrial Classification (NIC 2008) 2100 (four digit class). Similarly
if we are interested in the study of tobacco industry we can pull data from
unit level ASI for those units fall under class 1600 as per four digit NIC 2008
classifications. But manufacturing of medical devices is not clearly flagged
in National Industrial Classification System. Even at the five digit level
medical devices manufacturing industry is not clearly defined. For example,
five digits subclass 26600 represents a set of sophisticated medical devices
(e.g. CT scanner, MRI scanner) as well as a group of irradiation apparatus as
per NIC 2008. Similarly subclass 32503 represents manufacture of medical,
surgical, dental as well as veterinary furniture. This research paper defines
manufacturing of medical devices industry as the sum of class 2660
(Manufacture of irradiation, electro medical and electro therapeutic
equipment), 3250 (Manufacture of medical and dental instruments and
supplies) excluding subclass 32507 (Manufacture of ophthalmic goods,
eyeglasses, sunglasses, lenses ground to prescription, contact lenses, safety
goggles etc.) and subclass 30922 (i.e. Manufacture of invalid carriages with
or without motor). Detail description is given in Table‐1. NIC 2008 and NIC
2004 systems have been harmonized for medical devices manufacturing
sector for time series analysis for the period of 2004‐05 to 2009‐10. NIC 2004‐
NIC 2008 harmonization with item wise description is given in Table‐2.
Indian trade data follow the Indian Trade Classification (Harmonization
System) (ITC‐HS) system. ITC‐HS is a commodity classification system
whereas, NIC is an activity classification system. Annual Survey of Industry
follows another classification system called Annual Survey of Industry
Commodity Classification (ASICC) system to classify commodity produced
1 Central Statistical Organization.
2 Centre for Monitoring Indian Economy.

4
Table‐1
Medical Devices Manufacturing Industry as per NIC (2008) System
NIC
2008
(4 digit)
Description NIC
2008
(5 Digit)
Description
2660 Manufacture of
irradiation, electromedical
and
electrotherapeutic
equipment
26600 Manufacture of irradiation, electro‐medical
and electrotherapeutic equipment:
‐This class includes manufacture of electromedical
and electrotherapeutic apparatus,
such as MRI scanner, CT scanner, medical
ultrasound equipment, pacemakers,
hearing aid, electrocardiographs etc. and
irradiation apparatus. Irradiation can take
the form of beta‐rays, gamma‐rays, X‐rays,
or other ionizing radiation
3092
(Partial)
Manufacture of
bicycles and invalid
carriages
_Only invalid
carriages
30922 Manufacture of invalid carriages with or
without motor
3250
(excludi
ng
32507)
Manufacture of
medical and dental
instruments and
supplies
32501 Manufacture of dental fillings and cements
(except denture adhesive or cement), dental
wax and other dental plaster preparations;
manufacture of dental laboratory furnaces,
dental instruments, artificial teeth, bridges,
etc., made in dental labs
32502 Manufacture of laboratory apparatus
(laboratory ultrasonic cleaning machinery,
laboratory sterilizers, laboratory type
distilling apparatus, laboratory centrifuges
etc.)
32503 Manufacture of medical, surgical, dental or
veterinary furniture such as operating
tables, examination tables, dentists’ chairs
etc.
32504 Manufacture of bone plates and screws,
syringes, needles, catheters, cannulae, etc.
32505 Manufacture of measuring instruments
such as thermometers etc.
32506 Manufacture of orthopedic and prosthetic
devices
32509 Manufacture of other medical and dental
instruments n.e.c.
Source: National Industrial Classification (NIC2008), Ministry of Statistics and
Programme Implementation (MOSPI).

5
Table‐2
NIC 2008‐2004 Concordance for Medical Devices Industry
NIC 2008 Description NIC 2008
Medical Devices Manufacturing Industry
NIC 2004 Description NIC 2004
2660 Manufacture of irradiation, electromedical
and electrotherapeutic
equipment. This class includes
manufacture of electro‐medical
and electrotherapeutic apparatus,
such as MRI scanner, CT scanner,
medical ultrasound equipment,
pacemakers, hearing aid,
electrocardiographs etc. and
irradiation apparatus. Irradiation
can take the form of beta‐rays,
gamma‐rays, X‐rays, or other
ionizing radiation
3311 Manufacture of
medical and surgical
equipment and
orthopedic
appliances
3250
Excluding
32507
Manufacture of medical and dental
instruments and supplies
30922 Manufacture of invalid carriages
with or without motor
35922 Manufacture of
invalid carriages
with or without
motor
# 32507 includes ʺManufacture of ophthalmic goods, eyeglasses, sunglasses, lenses
ground to prescription, contact lenses, safety goggles etc.ʺ
or used as inputs. In this research paper we have disaggregated the
domestic production profile up to ASICC level to get ultimate detailing over
domestic production profile of medical devices as well as to compare trade
figures comparable with this. On one hand ASICC has been identified
against each NIC and on the other hand corresponding ITC(HS) has been
identified. Item wise detail list of ASICC and ITC(HS) has been further
classified into four major subgroups, viz.
a) Furniture and other instruments (e.g. Dentists Chairs, Hospital
Furniture etc.),
b) Implants (e.g. Artificial Teeth, Artificial Joints etc),
c) Medical Disposables (e.g. Syringes, Needles X‐Ray Film & Plates etc.),
d) Equipment (X‐Ray Equipment, Dental Equipment etc.
Against each category or subgroup, domestic production has been
compared with the trade profile. For example, this research piece by its
unique method of product level concordance, directly compare how much
equipment, implants etc. are produced domestically and in what extent it

6
has been imported from other countries. A brief concordance is given in
Table‐3. This paper uses value of ex‐factory product instead of widely used
Table‐3
ASICC–ITC(HS) Concordance Mapping Medical Devices
Manufacturing Industry
ASICC ITC(HS)
1. Equipment
33821,36503,36589,41487,42102,42169,4221
3,63483,71141,71142,71215,71242,71415,71
507,71571,72103,72245,73837,74011,75104,
75247,75254,75334,75338,76217,76317,7671
6,76723,76911,76921,76923,76926,76927,77
101,77102,77126,77187,77194,77205,77214,
77422,77443,77528,77534,77535,77551,7756
9,77732,77834,77936,77961,77969,78216,78
221,78238,78325,78922,78924,79119,79302,
79503,79512,79513,79515,79516,79521,7952
2,79526,79527,79531,79533,79534,79535,79
541,79543,79546,79548,79552,79554,79559,
81159,91114,91119,91135,91332,91344,9135
9,93113
30069100,90181100,90181210,90181290,901
81300,90181400,90181910,90181990,901819
20,90182000,90184100,90184900,90185010,
90185020,90185030,90185090,90189031,901
89032,90189033,90189041,90189042,901890
43,90189044,90189091,90189092,90189093,
90189094,90189095,90189096,90189097,901
89098,90191010,90191020,90191090,901920
10,90192090,90200000,90211000,90221200,
90221300,90221410,90221420,90221490,902
21900,90222100,90222900,90223000,902290
10,90229020,90229030,90251920,90251990,
90258010,90258020,90258030,90258090,902
59000,90261010,90261020,90261090,902620
00,90268010,90268090,90269000,90272000,
90275010,90275020,90275030,90275090,902
78010,90278020,90278030,90278040,902780
90,90279010,90279020,90279090
2. Medical Disposables
29189,31149,31718,32506,33702,33712,3371
3,33789,33989,35199,38301,38319,41405,41
463,41531,41999,42103,42112,42604,42606,
42644,42649,42719,42905,42941,51243,7113
4,71403,71407,71408,73604,74046,74154,74
177,75311,77964,78328,78411,78939,79523,
79537,79544,79545,82405,82406,91101,9110
3,91104,91105,91108,91112,91117,91159,91
312,91313,91343,94186,94189,99211
30051010,30051020,30051090,30059010,300
59020,30059030,30059040,30059050,300590
60,30059070,30059090,30062000,30063000,
30064000,90183100,90183210,90183220,901
83230,90183290
3. Implants
33718,36505,36507,71307,79504,79517 90183910,90183920,90183930,90183990,902
12100,90212900,90213100,90213900,902140
10,90214090,90215000,90219010,90219090
4. Minor Instruments, Accessories& Furniture
41427,41461,42989,71306,71338,71429,7153
1,71533,73228,73231,74042,74095,75325,76
603,76907,77117,77231,77452,77455,77722,
78152,78179,78211,78307,78332,79507,7951
8,79524,79547,82419,91549
94021010,94029010,94029020,94029090,300
65000,90189012,90189019,90189021,901890
22,90189023,90189024,90189025,90189029,
90229040,90229090,90230010,90230090,902
51110,90251910,90189011

7
gross value added (GVA) to measure value of output at product level
(ASICC) for two important reasons, viz.
a) At ASICC level, it is difficult to calculate all components of GVA. ASI
unit level data is given as firm as final sampling unit. So at product level
calculation other components (e.g. value of input) of GVA can’t be
calculated for those firms producing multiple products. Given the
structure of data it is not possible to identify input used for each
product produced by any multiproduct firms. So this study prefers to
use value of ex‐factory output instead of GVA to analyze domestic
production profile of medical devices manufacturing industry in India.
b) Gross Value Added by any firms includes value of products (and by
products) as well as income from services, electricity sold out etc. So
GVA can be taken as output at industry level or firm level comparison.
But the main aim of this research paper is to know what kind of medical
devices are produced domestically in India and what kind of devices
India export or import. So for our purpose product level detailing is
needed, where ex‐factory value is more applicable than GVA.
This paper uses some other variables namely number of factories, gross
fixed capital, number of people engaged estimated from Annual Survey of
Industries, to depict the basic picture of the medical devices manufacturing
industry in India. Trade figures are extracted from CMIE India Trade
Database. This paper also explores ‘Export‐Import Database’, Ministry of
Commerce, Government of India as the alternative source of trade data.
Section‐III
Structure of Indian Medical Devices Manufacturing
Industry
Indian medical devices manufacturing industry is a tiny part of total
registered manufacturing industry. There were around 356 registered
manufacturing units producing medical devices of the value of outputs of
`312 crores in 2009‐10. Among all registered manufacturing factories only
0.19 per cent factories are engaged in production of medical devices. It is
clear from Table‐4, that there are only few units manufacturing medical
devices compared to the growing manufacturing sector in India. Value of
fixed capital in medical devices as percentage of value of fixed capital of
total registered manufacturing is declining over time. Fixed capital in

8
Table‐4
Production of Medical Devices in India: Some Basic Characteristics
2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10
Number of Factories
Medical Devices 310 339 326 362 377 301
Total
Manufacturing
Sector (Reg.)
136353 140160 144710 146385 155321 158877
Medical Devices
as Percentage of
Total
Manufacturing
Sector (Reg.)
0.23% 0.24% 0.23% 0.25% 0.24% 0.19%
Number of Workers Employed
Medical Devices 280910 201245 252000 277000 301000 377770
Total
Manufacturing
Sector
(Registered)
128700000 148800000 183000000 212700000 248600000 273300000
Medical Devices
as percentage of
Total
Manufacturing
Sector (Reg.)
0.22% 0.14% 0.14% 0.13% 0.12% 0.14%
Value of Output
Medical Devices 14987 16909 17608 20842 17914 18975
Total
Manufacturing
Sector (Reg.)
6600089 7137887 7881577 8200718 8776980 9171050
Medical Devices
as Percentage of
Total
Manufacturing
Sector (Reg,)
0.23% 0.24% 0.22% 0.25% 0.20% 0.21%
Source: ASI Panel Data, Unit Level.
medical devices as percentage of fixed capital of total registered
manufacturing sector went down steadily from 0.23 per cent in 2004‐05 to
only 0.09 per cent in 2009‐10.
Indian medical devices manufacturing industry engages around 0.37 million
workers which is around 0.14 per cent of total manufacturing sector
workforce. Share of skilled labour in work force is better in Indian medical
devices manufacturing industry as compared to the total registered
manufacturing sector. In registered manufacturing sector share of skilled

9
labour in total work force is 21 per cent in 2009‐10 whereas in medical
devices manufacturing industry it is around 31 per cent. (Figure‐1)
Figure‐1
Share of Skilled Labour in Work Force
Source: ASI Panel data, various years.
Figure‐2 explains the capital intensity of the Indian medical devices industry.
Capital intensity in Indian medical devices industry and total registered
manufacturing sector were at similar level in 2004‐05 but the gap increased
over time. While capital intensity of the manufacturing sector is increasing
steadily, in case of medical devices industry there was a decline between
2004‐05 and 2006‐07. Since then there is some increment in capital labour
ratio. From our discussion it is not difficult to visualize the macro scenario of
medical devices manufacturing industry in India. It is not only small and
negligible in size in terms of output and employment contribution but also a
pre modern in nature both in terms of, low capital per labour (capital
intensity) and high share of less skilled labour in the workforce, though the
intensity of skilled workforce is higher in medical devices industry. The
picture will become clearer when we analyse the composition of product
basket produced in Indian medical devices industry.
Medical device industry is a multi‐product industry. The industrial unit
which produces some medical devices may also produce products which
are not of medical use. Under the same NIC code, for instance 32501, dental
instruments, artificial tooth are produced along with acrylic materials which
may not be used as medical devices. Overall of the total value of the
products covered under the ten NIC industries medical devices is 55 per
15
17
19
21
23
25
27
29
31
33
35
2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10
Axis Title
Medical Devices Total Manufacturing Sector (Registered)

10
Figure‐2
Capital Labour Ratio (Capital Intensity) of Medical Devices and
Total Registered Manufacturing Sector
Source: ASI Panel data, various years.
cent (Table‐5). NIC 32501, which largely cater to manufacturing of dental
filling and instruments have only 27 per cent of total value of product
produced which can be categorised as medical devices. NIC 26600 which
caters to manufacturing of electro‐medical and electro‐therapeutic goods
produces 65 per cent of products which are of non‐medical use. Three NIC
industries, namely 32502 (98%), 32503 (97%) and 32504 (89%) produce only
medical devices and the remaining are by‐products in the form of metal
scrap etc.
There can be couple of explanations for the above phenomenon. Many of the
products produced in the units engaged in the production of medical
devices may be of other use. For instance, furniture produced for medical
use, like beds may also be for non‐medical uses. The unit that produces
syringe for medical use may also produce syringes for veterinary uses. At
times, an unit may be mainly producing medical devices but have other byproducts
which are used otherwise. The other issue is of erroneous
classification. The products which are not of medical use, may be clubbed
with medical devices, due to unclear definitions. A further breakup of data
into exact products would definitely throw more light on the question, but
may be safely commented here that while the former depicts the complexity
of medical devices industry and hence may be unavoidable, the later should
be addressed to get greater clarity on data.
0
200000
400000
600000
800000
1000000
1200000
1400000
2004‐05 2005‐06 2006‐07 2007‐08 2008‐09 2009‐10
K/L
Medical Devices Total Manufacturing Sector (Registered)

11
Table‐5
Medical and Other Profile of Indian Medical Devices Industry: Year
NIC
2008
Description of Industry Share in Total Value
of Product & By‐
Products Produced
Total
Value of
Product
and
(` Lakh)
by
Products
produced
Medical
Devices
Other
Product
26600 Manufacture of irradiation, electromedical
and electro‐therapeutic
equipment
35 65 188240
30922 Manufacture of invalid carriages with or
without motor
45 55 8707
32501 Manufacture of dental fillings and
cements (except denture adhesive or
cement), dental wax and other dental
plaster preparations; manufacture of
dental laboratory furnaces, dental
instruments, artificial teeth, bridges, etc.,
made in dental labs
27 73 17025
32502 Manufacture of laboratory apparatus
(laboratory ultrasonic cleaning
machinery, laboratory sterilizers,
laboratory type distilling apparatus,
laboratory centrifuges etc.)
98 2 3770
32503 Manufacture of medical, surgical, dental
or veterinary furniture such as operating
tables, examination tables, dentists’ chairs
etc.
97 3 18133
32504 Manufacture of bone plates and screws,
syringes, needles, catheters, cannulae, etc.
89 11 69562
32505 Manufacture of measuring instruments
such as thermometers etc.
29 71 45770
32506 Manufacture of orthopedic and prosthetic
devices
59 41 21718
32509 Manufacture of other medical and dental
instruments n.e.c.
73 27 124547
ALL Medical Devices Manufacturing
Industry
55 45 497472
Source: ASI, Panel data, unit records.

12
Section‐IV
International Trade on Medical Devices
Import constitutes a substantial part of the medical device market in India.
Market for medical device was around `13,000 crores during 2009‐10, of
which almost seventy per cent is imported. Currently 1.14 per cent of global
import of medical devices takes place in India, which in turn constitutes less
than 0.6 per cent of total imports of India for the year 2012. Similarly, its
export constitutes less than 0.5 per cent of total exports of 2012. In the year
2012, total value of imports of medical devices was `13,520 crores and export
was `6,362 crores and thus the total volume of trade is `19,882 crores. There
is a steady decline in the share of both imports and exports in total trade. In
fact, as percentage of import of manufacturing products, there is a constant
decline in share of medical devices. During 2002 this was close to three per
cent (2.87%). There was continuous decline in share since then and in 2008
the share reached the nadir of 1.57 per cent, only to recover marginally
during the subsequent periods (Figure‐3).
Figure‐3
Indiaʹs Share in Global Import of Medical Devices: 1995‐2011
Source: UNCTAD Statistical Dataset, accessed on 10.04.13: http://unctadstat.unctad.
org/ReportFolders/reportFolders.aspx?sCS_referer=&sCS_ChosenLang=en
After liberalization of trade during early 1990s, when import tariffs on
medical devices were significantly cut, India’s share in medical device
import grew steadily. During 1980s the prevailing rate of tariff on medical
devices were around 40‐60 per cent, though the ‘life saving’ medical devices
0.00
1.00
2.00
3.00
4.00
5.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Indiaʹs share in developing country imports Indiaʹs share in global import

13
were imported duty free (Mahal 2009). During late 1990s tariffs were
reduced to 25 per cent and subsequently to 12.5 per cent in 2003‐04. Though
the initial reduction in import duty provided impetus in increasing share in
imports, the 2003‐04 reduction has not succeeded in addressing the decline
that had started in 2001. The existing custom duty on medical devices is an
uniform rate of five per cent with countervailing duty of four per cent and
with complete exemption from special additional duty (Union Budget 2010‐
11). The rapid decline in India’s share in developing countries import of
medical devices since 2001 can be due to couple of reasons: it may be the
case that import in some other developing countries have increased or
growth in India’s import of medical devices have gone down.
During the period of 2001 to 2010, both import and export of medical
devices have grown at more than ten per cent rate, at constant prices. Import
has grown at 12.5 per cent rate whereas export has grown at 11.4 during this
period. As depicted in Figure‐4, exports grew at a rate of 22.8 per cent during
2000‐2004. However, during 2005‐09, export growth slipped to 9.6 per cent.
In contrast, import growth rate improved during 2005‐09 compared to the
previous period. During 2005 to 2009 domestic production has increased at
10.2 per cent per annum at constant prices, a rate comparable to export
growth.
Figure‐4
Growth Rates of Production, Export and Import of Medical Devices
(Constant Prices)
Source: India Trades data and ASI unit records for various years.
11.8
15.8
12.5
22.8
9.6
11.4
10.23
2000‐2004 2005‐2009 2001‐10
Import Export Production

14
Section‐V
Structure and Patterns of Production and Trade of Medical
Devices in India
The definition of medical devices ranges from MRI scanning machine to
needles, products of various size, intensity of capital requirements, degree of
value added. They also vary in their usage, for diagnostic purposes, surgical
purposes, prevention and cure of diseases and conditions and others are
implants. Given the widely varying uses of devices, an attempt was made to
categorize medical devices into four major categories‐ namely major
equipment; medical disposables; implants and minor equipment,
accessories and furniture. Major equipment include all the devices like the
ECG, USG, MRI Scanner and other electro‐diagnostic devices, major surgical
instruments etc. There are 78 items listed in the trade data and 34 items as
per the ASICC of domestic production data which can be categorized into
major equipment. Disposables include devices which are mainly used for
limited number of times and disposed of‐ these include syringes, needles,
dental cements, X‐ray films, adhesive tapes etc. As per ASI data there are 26
disposable items produced and according to India Trades data there are 18
disposables traded. Medical implants are medical devices that are used to
replace a missing biological structure or support or enhance a damaged one.
The range of implants include artificial tooth, heart valve to orthopaedic
implants etc. There are only six items produced domestically and some 13
items traded. Furniture and other instruments, which do not come in direct
use in treatment but are essential ancillary instruments for hospital industry,
constitute a substantial part of medical device production in India. There are
15 items produced in India and 19 items traded ranging from clinical
thermometer, BP instruments, and stethoscope to hospital beds and dentist
chair etc.
On an average, equipment forms almost two‐third (64.7%) of total value of
domestic production, whereas disposables form 26.5 per cent of total value.
Implants form less than 2 per cent of total value and minor instruments and
furniture constitute around seven per cent. In 2008‐09 medical disposables
constituted 60 per cent of total production, share of equipment was 31 per
cent. The share of equipment increased to 60 per cent in 2009‐10 and
consequently share of disposables came down to a third. The other
important observation that comes out of Figure‐5 is that implants form a
small part of the production.

15
Figure‐5
Domestic Production: Broad Categories
Source: ASI, unit records.
Structure of trade varies widely from the domestic production. Though
equipment constitutes more than 80 per cent of total import and export,
some variations can be clearly observed. Medical disposables constitute
around 15 per cent of total exports, whereas less than 10 per cent of imports
are on account of disposables (Figure‐6a & ‐6b). Higher proportion of exports
Figure‐6a
Share of Major Categories of Import
Source: India Trades.
0%
20%
40%
60%
80%
100%
2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 Average
Production
Equipments Medical disposables Implants Furniture & other instruments
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12
Equipments Disposables Implants Minor instruments

16
Figure‐6b
Share of Major Categories of Exports
Source: India Trades.
of disposables corresponds to our earlier finding that these goods constitute
a major part of domestic production also. Medical implants form a very tiny
part of exports, but its share in imports has increased significantly between
2000 and 2012. However, a comparison of trade and domestic production
suggest that disposables have higher share in domestic production and
export and much lesser proportion in imports. Disposables are often less
technology intensive and remain at the lower part of the value chain.
Implants, on the other hand form a tiny part of domestic production but its
share in import is much higher, implying that a larger part of domestic
demand for implants are met through import. The category of major
equipment is also not uniform and capture wide gamut of products with
varying intensity of use of technology. We need to look at further break ups
of production, exports and imports of specific products to get a better
picture of medical devices industry.
Main Products: Domestic Production and International Trade
It is important for our study to identify the main products in domestic
production, exports and imports to understand the nature of medical
devices used. For the domestic production market we have used the ASICC
five‐digit code, which is the most detail account of commodity description
available for analysis of domestic production, to identify the top twenty
commodities produced domestically for 2004‐05 to 2009‐10. We have taken
the average value of the products for this period and these top twenty
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12
Equipments Disposables Implants Minor instruments

17
products constitute 90 per cent of total value of output of the industry.
Almost 48 per cent of total value of output is produced under the category
“medical/bio‐medical/lab machines which are not elsewhere classified”. This
shows the limitation of ASI data, in not being able to provide adequate
details. Different forms of syringes form more than fourteen per cent of the
value of total product. Other important category includes different
instruments and disposables related to X‐ray (11.6%). Among the furniture
operating tables (2.8%) and dentists’ chair appear prominently (1.02%).
Among the major medical devices only ECG machines figures in the top
twenty products. So predominance of disposables, minor equipment and
equipment and products related to radiology emerge clearly from the Table‐6.
Table‐6
Top Twenty Products in Domestic Production Market and
their Share in Value Output
ASICC Category Description Value share
79559 Equipment Medical/bio‐medical/lab. Machines N.E.C 47.50
79537 Disposable Syringe 6.06
79525 Equipment Optic set for stereo microscope 4.87
42606 Disposable Disposable syringe plastic 4.87
77194 Equipment X‐ray equipment 4.61
79524 Furniture and minor
instrument
Operation & examination tables 2.80
38301 Disposable Film X‐Ray unexposed in roll 2.75
79544 Disposable Health care products 2.42
38319 Disposable X‐Ray film & plates N.E.C 2.34
79527 Equipment Pharmaceutical machine. others 1.92
79545 Disposable Needle surgical 1.42
38302 Disposable Film X‐Ray unexposed in sheet 1.22
79516 Furniture and minor
instrument
H IV testing kits 1.12
74154 Disposable Needle 1.07
79507 Furniture and minor
instrument
Dentists chairs 1.02
79533 Equipment Sterilizers 0.83
91359 Disposable Laboratory wares & components N.E.C 0.82
79523 Disposable Needle holder surgical 0.82
79512 Equipment E.C.G. machine 0.77
38304 Disposable Film X‐Ray unexposed ‐others 0.72
Source: ASI unit records.
From the 8‐digit ITC‐HS, we have identified top ten commodities in terms of
import and export values for the years 2006‐07 to 2009‐10 (Table‐7). Top
twenty constitute three quarter of total exports and 72 per cent of total

18
imports. X‐ray machines and other devices related to radiotherapy
constitute a fourth of the total value of exports‐ there are four such
commodities figuring in top twenty. Disposables dominate the list of
exports. Out of twenty items eight fall into the category of disposables—
catheters, cannulae, syringes, adhesive bandages, needles etc. Other
important exports include surgical tools and demonstration materials. This
trend is consistent with the domestic production, which is also dominated
by X‐ray and radiology related devices on one hand and disposables on the
other. The analysis of domestic production data and the export data shows
that the domestic production industry is characterized by the dominance of
products which are less technology intensive. The only high‐end medical
equipment is related to radio‐logical equipment including X‐Ray machines.
The spread and popularity of X‐Ray machines as diagnostic devices dating
back since 1980s, the domestic production capacity has also grown over the
years.
Table‐7
Top Twenty Exports and Imports of Medical Devices:
Average Share between 2006‐07 and 2009‐10
Import Export
ITC_HS Commodity Share ITC_HS Commodity Share
90279090 Other parts &
accessories for physical
and chemical analysis
7.62 90221490 Other X‐ray machines
for medical uses
12.6
90278090 Exposure meters 6.97 90181990 Other electrodiagnostic
apprts
9.1
90272000 Chromatographs &
electrophoresis instrmnt
5.95 90223000 X‐ray tubes 6.7
90181990 Other elctro‐diagnostc
apparatus
5.13 90229090 Others parts &
accessories related to
radiotherapy
5.7
90229090 Others Parts &
accessories related to
radiotherapy
4.84 90183990 Catheters and others 5.2
90183990 Catheters and others 4.45 90183930 Cannulae 5.1
90185090 Ophthalmic surgical
instrument &
appliances
3.95 90261010 Flow meters (gas) 3.1
90181300 Magnetic resonance
imaging apparatus
3.65 90181290 Other electrodiagnostic
apparatus
2.9
90181290 Other ultra‐sonic
scanning apparatus
3.45 90269000 Parts & accessories of
instrments / apparatus
for measuring /
2.6

19
Import Export
ITC_HS Commodity Share ITC_HS Commodity Share
checking flow of gas /
liquids etc
90221200 Computed tomography
apparatus
2.95 90230090 Other demonstration
aids
2.5
90213900 Other artificial joints 2.78 30059040 Bandages without
adhesive layer
2.2
90189019 Other diagnostics
instruments
2.45 90183100 Syringes, w/n with
needles
2.1
90221490 Other X‐ray machines
for medical uses
2.36 30059090 Other dressing articles
n.e.s.
2.1
90219090 Others 2.29 90189029 Other surgical tools 1.9
90269000 Parts & accessories of
checking flow of gas/
liquids etc
2.02 90183210 Suture needles 1.9
90213100 Artificial joints 1.93 90189032 Blood transfusion
apparatus including
plastic container / bags
1.8
90183920 Cardiac catheters 1.87 90189022 Surgical knives,
scissors & blade
1.8
90262000 Pressure gauge and
other instruments &
appratus for
measuring/checking
pressure
1.75 90262000 Pressure gauge and
other instruments &
apparatus for
measuring/checking
pressure
1.8
90275090 Others 1.72 90268090 Other instruments &
apparatus for
measuring,checking or
automatically
controlling the
flow,dpth,prsr etc
1.6
90261010 Flow meters (gas) 1.64 90189019 Other diagnostics
instruments
1.5
90223000 X‐ray tubes 1.52 90279090 Other parts &
accessories for
physical and chemical
analysis
1.5
Source: CMIE, India Trade.
Three major patterns emerge from the analysis of top imports. The first
thing is medical equipment dominate the list and as expected the high end
electro‐diagnostic devices like the magnetic resonance imaging apparatus
(MRI), Ultra‐sonic scanning machines, computed tomography apparatus
and other electro‐diagnostic apparatus figure prominently in the list. The
other thing is some of the major imports are actually part of larger

20
equipment used as inputs. For instance, exposure meters, chromatographs,
flow meters and other diagnostic instruments. These point out that
assembling and re‐exports may be major trends in domestic production
which need to be looked at. The other trend that emerges is that implants in
the form of artificial joints are being imported in India to fill in the void in
production of these articles. Our analysis of domestic production sector also
suggests that implants form very small part of the domestic production and
whatever being produced are in the form of artificial teeth and some
prosthetic parts.
Imported Inputs in Domestic Production:
Imported inputs constitute a significant part of the domestic production of
medical devices. Almost 44 per cent of the total value of inputs used is
imported inputs. Some of the imported inputs are also medical devices.
Among the top twenty imported inputs medical devices are three‐ thus
indicating that devices are being assembled in India. There are more than 80
imported inputs which constitute 90 to 100 per cent of the total value of
inputs used for a specific product (Table‐8).
Table‐8
Top Twenty Imported and Indigenous Inputs Used
in the Production of Medical Devices
Indigenous Inputs Imported Inputs
99201 Other Basic Items
(Indigeneous)
99221 Other Items Imported
99908 Packing Items 38301 Film X‐Ray Unexposed in
Roll
Yes
42941 Plastic Granules 78234 L. C. D.
99905 Electricity Purchased 78328 Monitor (Computer
Display)
99906 Petrol Diesel Oil Lubricants 78152 Sensors
64221 Fibre Polypropylene 78211 Cable T V Equipment
41477 Rubber Processed 91359 Laboratory Wares &
Components N.E.C
79533 Sterilizers 79559 Medical/Bio‐Medical/Lab.
Machines N.E.C
Yes
31908 Polymers‐Others 79545 Needle Surgical Yes
32457 Propylene 78221 DIODES
79559 Medical/Bio‐Medical/Lab.
Machines N.E.C
Yes 77904 Resistance /Resistor
71401 Bars Rods Stainless Steel 78939 Electronic Components &
Parts N.E.C

21
Indigenous Inputs Imported Inputs
32599 Organic Chemicals N.E.C 77404 Anodes ‐ Others
41523 Rubber Lined Goods 41487 Moulded Goods Rubber
78939 Electronic Components &
Parts N.E.C
64221 Fibre Polypropylene
74147 Monometal 74055 Cover Crank Cases
41407 Dipped Goods Rubber 41427 Cables Inner & Outer
Rubber
77415 Cable Jelly Filled 71306 Drill Pipe Of Iron
71429 Stainless Steel & Its Products
N.E.C
74161 Non Ferrous Metal
72235 Nuts Bolts Washer & Screw
Copper /Brass
71425 Wires/Coil/Circle Stainless
Steel
71204 Rods Bars Bright Steel 78336 Printer All Kinds
Imports of Diagnostic Equipment:
India is a major importer of diagnostic equipment like Magnetic Image
Resonance (MRI), Ultra‐sound machines (USGs), X‐Ray machines, full body
scanners etc. Over the last decade significant number of USG machines, MRI
scanners have been imported. For instance, 0.15 million Ultrasonic Scanning
apparatus of the value of `2,916 crores have been imported into India
between 2001 and 2011 (Figure‐7). Similarly some 12,500 MRI scanning
machines of value of `2,626 crores have been imported during the same
period. The meteoric rise of diagnostic centers in the context of complete
Figure‐7
Import of Some Electro‐Diagnostic Equipment (quantity)
Source: India Trade data, various years.
0
5000
10000
15000
20000
25000
30000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Ultrasonic Scanning apparatus MRI scanner ECG

22
vacuum of regulatory apparatus has led to this kind of trends. This also
indicate increasing dependence on electro‐diagnostic methods in medical
care which might result in increasing cost of treatment, a phenomenon
widely prevalent in developed countries such as in US or other OECD
countries.
Section‐VI
Discussion and Conclusion
Medical device industry is multi‐product industry, producing wide range of
products, with varied degree of capital intensity and multipurpose use.
though it constitutes a very small population in comparison with total
manufacturing sector, in public health its importance is significant.
Manufacturing and trade in medical devices is also growing quite steadily
over the period of analysis. Double digit growth rates in real term indicates
its growing importance in health care. Its requirement for skilled workforce
is high compared to the overall manufacturing industry. This also
corroborates to the observation that capital‐ labour ratio is declining, thus
larger share going towards wages.
When we compare the domestic production data with the trade data a
definite pattern of the industry clearly emerges. The domestic industry
produces those segments, which are relatively less technology intensive,
thus we see the presence of disposables figuring prominently. The most
advanced part of the domestic production is the segment catering to radiodiagnostic
equipment. The same pattern is also found in export sector. Other
high end electro diagnostic equipment, like the MRI, CT Scan, USG are
generally imported. But import also consists of parts and accessories of
larger equipment. This may be a pointer towards the emerging area of
assembling and re‐export, though this couldn’t be confirmed with existing
data sources.
Household survey data shows that a vast majority of Indians do not have
access to medical devices, and private sector hospitals are using medical
devices in major way (Mahal 2009). Proactive role of government in
ensuring access to medical technologies is definitely the most effective
vehicle, but regulation could also play a complementary role in ensuring
quality and access. The regulatory structure of medical devices in India is
nascent to say the list. Central Drugs Standard Control Organisation
(CDSCO) is the main regulatory body in India. The list of medical devices

23
under regulation is not detailed and hence leaves out many of the devices.
The other issue is that many medical devices are regulated as part of the
Drugs and Cosmetics Act. The recent attempts to introduce a
comprehensive regulation involving both Ministry of Health and Family
Welfare and Department of Science and Technology (DST), has not taken off
yet. One major step ensuring implementation of better regulatory
framework would be to have clearer definition of the industry and better
data. As it is evident from the ASI data, the current method of identifying
medical devices industry is inadequate. A much more detailed product
classification is the need of the hour. Implementation of National Product
Classification for Manufacturing Sector (NPC(MS)), which complies with
international standard classifications could facilitate this process.

24
References
Jaroslawski, Szymon and Gayatri Seberwal (2013), Case Studies of Innovative
medical Devices Companies from India: Barriers and Enablers to
Development, BMC Health Service Research.
Mahal, Ajay and Anup K. Karan (2009), Diffusion of Medical Technology:
Medical Devices in India, Expert Reviews.
Paddock, Richard (2010): Medical Devices Regulatory Profile of India (2010),
International Trade Administration.
Technology for Global Health (2012), Editorial, Lancet.
Database
Annual Survey of Industries, Central Statistical Organization (IS Wing),
MOSPI, Government of India.
India Trades, Centre for Monitoring Indian Economy.

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the Corporate Studies Group (CSG), is a national-level policy research
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