India has liberalized the foreign direct investment (FDI) policy for medical devices business, in a bid to increase investment in the $7bn sector.
The central government has approved 100% FDI in medical devices through automatic route, which helps in avoiding Foreign Investment Promotion Board’s permission to buy an existing company or establish a new manufacturing facility in the medical devices sector.
According to an official statement issued after the Union Cabinet meeting: "Easing of norms for medical devices industry by creating special carve out in the extant FDI policy on pharma sector will encourage FDI inflows in this area."
The decision is expected to enhance the growth of the Indian health care sector, as it currently imports around 70% of its requirement for medical devices.
It will encourage the manufacturing of equipment, including diagnostic kits and other devices.
India’s finance minister Arun Jaitley said: "In this age of super specialisation, if medicines and pharma are one aspect, in which India has attained a certain amount of core competence, we still haven’t achieved that in medical devices, particularly which are to be installed in human body for the purpose of treatment."
As per various reports, the health care sector in the country is expected to reach around $150bn by 2017, from $80bn in 2012.
Image: India has liberalized FDI policy for medical devices business. Photo: courtesy of anankkml/ FreeDigitalPhotos.net.