This article contributed to a story in TV5, a Telugu news channel:
When USA’s President Donald Trump raised the issue of supply of hydroxycholoroquinine drug from India, many praised India’s production capacity in the Pharmaceutical industry. India is the “Pharma Capital” of the world. Not only USA, many developed and developing countries are dependent on the generic drugs mass produced in India.
However, the Corona Crisis exposed a few weaknesses in our medical devices industry. For instance, the need for ventilators. While India only has 40,000 ventilators, various estimates say that we would need 4-40 lakhs of ventilators to provide symptomatic treatment to COVID-19 patients. Unfortunately, our present production capacity is only around 5000 ventilators per month, that too dependent on the imports of electronics from other countries. Similarly, we lack the capacity to produce N95 respirators, various elements of the Personal Protection Equipment (PPE) Kits, and many other medical devices that help in building a resilient health infrastructure in the country.
Medical Devices Industry – A Bird’s eye view
Ventilators, Hearing Aids, Prosthetics, Medical Furniture (Beds etc) and many other products belong to this sector.
India provides a market of more than Rs. 50,000 Crores for medical devices Industry. Various estimates show that this would even increase to Rs. 3,50,000 Crores by 2025. This is a possibility because of increasing life expectancy, income levels and health insurance penetration – all that helps in increasing the demand for medical devices. Demand is also from non-residents as India is becoming a destination for medical tourism from South Asia, West Asia and even Africa. However, as we see in the Figure 1, upto 75% of this huge market is presently being serviced by imports. That is why the virus-infected supply-chain is unable to meet the demand for medical devices in the country. And our doctors face the threat of standing in the frontline without required armour.
Figure 3 shows a commodity wise distribution of the medical devices trade. We can observe that except for ‘Miscellaneous Pharmaceuticals’ category, India is dependent on imports in every other category. In the area of high-tech products our dependency in even higher. Ventilators come under the category of “MECHANO-THERAPY APPLIANCES” and we can see the high level of imports in that category as well.
For a better understanding, let’s analyse the present situation. To fight COVID-19, few of the most important requirements are Hand Sanitisers & Disinfectants, Gloves, Masks, N95 respirators & other advanced masks, Ventilators & other oxygen therapy apparatus. Figure 4 shows the trade in these commodities.
We are good in producing disinfectants, masks and gloves. In fact, the leadership both in government and civic-sector was quick in encouraging women SHGs to produce masks and other hand-made products. This shows India’s strength in mass-production in labour-intensive sectors. Given the success of India in Pharmaceutical industry, I am guessing that the ecosystem enabled the production of disinfectants as well. However, when it comes to products that require advanced technologies like N95 respirators, Ventilators etc., the production capacity is lacking in India. At crisis times like this, when international supply-chains are broken, the poor production capacity makes us vulnerable.
There are various generic (Ease of Doing Business etc) and specific (Inverted Duty Structure) reasons to explain the low medical devices manufacturing capacity in the country. Every crisis gives an opportunity. Corona Crisis should be the opportunity for the medical devices sector and we should deal issues that ail the sector. “MAKE IN INDIA” is important not only for employment and incomes but also to deal with extreme situations like this. As an old adage goes, a nation’s resilience is determined by its manufacturing prowess. Corona just validated it.
Data Source: Export-Import Database – Ministry of Commerce
Sai Krishna 
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