Modi Government May Relax FDI Policy For Medical Devices

India’s cash-starved medical devices sector may get a new life today. The Modi-led government is expected to relax foreign direct investment (FDI) policy for the sector. And this proposal is a brain-child of the Commerce and Industry Ministry.

If we believe the sources, the central government is planning to liberalise the policy for the medical devices sector to lure more investments. Currently, the medical devices sector comes under the pharmaceutical category. And due to this, it is subjected to FDI limits.

According to a PTI report, 100% FDI can be carried out in the pharma sector. In the case of greenfield investment, the FDI is permitted through automatic route or new venture. And in the case of brownfield investment or in existing companies, the nod of Foreign Investment Promotion Board (FIPB) is needed.

Notably, the industry feels there is no threat of mergers if we look at the need for greater FDI in medical devices and equipment sectors.
India fulfills 70% of the requirement of medical devices in the international market, as per estimates. In the country, the size of this industry is nearly $7 billion.

Image credit: Thinkstock