India’s Medtech Weak Spot Could Undermine Its Healthcare Leap
Without deeper manufacturing, pricing reform, and workforce investment, India risks dependency on imported medical technologies.
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Shailender Kumar Hooda, Institute for Studies in Industrial Development (ISID), India.
SDG 3: Health and Well-Being | SDG 9: Industry, Innovation and Infrastructure
Institutions: Department of Pharmaceuticals; Department for Promotion of Industry and Internal Trade
As India expands health coverage and pushes toward a $5 trillion economy, a quiet vulnerability threatens to derail its ambitions: its high dependence on imported medical devices. From cancer diagnostics to cardiac imaging, the very tools that make modern healthcare possible are largely manufactured abroad. Unless addressed, this structural gap could become the Achilles’ heel of India’s health system, undermining both affordability and access.
Why India’s Medtech Boom Isn’t Self-Sustaining
At first glance, India’s medical device sector appears to be thriving. Demand has been fuelled by a growing elderly population and greater ability to afford medical treatment through higher incomes and wider insurance coverage under schemes such as Ayushman Bharat. This is further supported by a high inflow of international visitors seeking medical treatment - over seven lakh cases in 2024 alone. Digital health adoption is also rising among affluent urban consumers, and new hospitals and diagnostic chains are coming up across Tier 2 and Tier 3 cities.
Yet beneath the surface, a major structural weakness persists. India’s domestic production is concentrated in low-tech items, such as consumables and basic implants. Nearly two-thirds of advanced equipment, especially imaging and diagnostic devices, are imported. The country’s share of the global medical device market remains at just two percent. Without capabilities in R&D, design, and high-precision manufacturing, Indian firms struggle to compete in the fast-growing, high-value medical equipment segment, essential for managing chronic diseases.
How Import Dependency Fuels Healthcare Inequity
This isn’t just an industrial policy concern. Over the past few years, retail prices for diagnostic services, from ECGs and X-rays to echocardiograms have been rising by more than 17 percent a year, driven largely by dependence on imported equipment. Out-of-pocket spending on diagnostics has more than doubled in two decades, contributing to the rise in catastrophic health expenditure, which refers to household expenditure on health exceeding 10 percent of its total expenditure or income.
Insurance coverage is expanding, but reimbursement rates under schemes often fail to keep pace with the real cost of medical devices - the price patients actually pay to use them. Urban, high-income households are able to absorb or bypass these costs. Rural and low-income patients, who depend on under-resourced public facilities, face longer wait times, unreliable services, or simply forgo diagnosis altogether. This divide, based on location and income, and accentuated by import dependency, undermines the equity goals of universal health coverage.
Three Gaps in India’s Medtech Strategy
The government has made encouraging moves through Production Linked Incentive (PLI) schemes, the Medical Devices Rules (2017), and a network of proposed medical device parks. But data from sources such as the Annual Survey of Industries (ASI), trade statistics, government records, and academic and policy reports show that these efforts, while necessary and showing encouraging results, are insufficient. Three deeper gaps demand attention.
First, currently manufacturers focus on assembling imported parts, not building full-spectrum manufacturing capacity. India needs to foster home-grown innovation, from R&D to global regulatory certification, especially in diagnostics, imaging, and therapeutic devices. Targeted tax breaks for deep-tech startups, technology transfer mandates in FDI, and public procurement preferences for genuinely “Made in India” products could anchor a more robust ecosystem.
Second, there is little oversight of device pricing, whether in traditional or online retail channels. The absence of a reference or ceiling prices has led to wide and often opaque mark-ups. A National Medical Device Pricing Authority, modelled on the National Pharmaceutical Pricing Authority, could bring much-needed transparency. Aligning insurance reimbursement rates with real-world costs and requiring importers to disclose landed prices - encompassing invoice value, and shipping, insurance, customs duties, and other import-related charges - are also overdue.
Third, India has just 0.23 biomedical engineers or technicians per 1,000 population, down from 0.32 in 2014. This shortage limits safe deployment and maintenance of advanced devices, especially in non-metro hospitals. Policy tools, such as medtech apprenticeships, public-private training institutes, and retention incentives in the public system, could accelerate skill-building at scale.
The Cost of Delay Is Measured in Lives and Livelihoods
India has demonstrated that bold policy, anchored in public-private coordination, can transform sectors. Digital payments and vaccine production have benefited from long-term vision and regulatory clarity. Medical technology deserves the same strategic urgency.
The stakes are rising. Non-communicable diseases now account for 60 percent of India’s disease burden, according to the Institute for Health Metrics and Evaluation. The proportion of the 60+ population estimated around 150 million, is rising. Without timely diagnostics and affordable devices, health outcomes will stagnate, and costs will rise, creating a “missing middle” where neither the rich nor the poor are well-served.
India does not lack ambition. But without deep capabilities in medtech design, production, and affordability, it risks becoming a passive consumer in a sector central to both economic resilience and human dignity. The moment demands long-term investments that can make modern healthcare accessible to every citizen.
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Author:
The discussion in this article is based on his working paper on the subject. Views are personal.