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Special Article

Medical Equipment Industry in India: Production,


Procurement and Utilization
*Indira Chakravarthi
UGC Research Fellow, Centre of Social Medicine and Community Health, Jawaharlal Nehru University, New Delhi, India

Summary
This article presents information on the medical equipment industry in India-on production, procurement and utilization
related activities of key players in the sector, in light of the current policies of liberalization and growth of a health-care
industry in India. Policy approaches to medical equipment have been discussed elsewhere.

Keywords: Diagnostics, Import of medical equipment, Medical equipment industry, Medical technologies, Production of medical
equipment

Introduction
Medical devices and equipment receive scant attention
in the Indian context, both at the health policy level
and as an area of study. There has been little attempt
to systematically address the issue of equipment based
medical technologies and regulation of their production
and use. There is paucity of primary data on the kind of
medical equipment and techniques being introduced, on
their need and relative usefulness, reliability, patterns of
utilization, their production, procurement, distribution,
costs and accessibility. This article presents quantitative
and qualitative information on manufacturing and import
of medical equipment, as well as involvement of the
medical equipment industry in product promotion,
lobbying activities, research, education and training of
medical professionals. The necessary information has
*Corresponding Author: Dr. Indira Chakravarthi,
UGC Research Fellow, Centre of Social Medicine
and Community Health, Jawaharlal Nehru University,
New Delhi - 110 067, India.
E-mail: indira.jnu@gmail.com

Access this article online


Quick Response Code:

Website: www.ijph.in
DOI: 10.4103/0019-557X.123242
PMID: ***

been collected from government reports, business reports


and announcements and scanning of websites of various
companies.

Market Size of Medical Equipment


According to one estimate cited in a report by the
Confederation of Indian Industry (CII) the medical
technology market in India was valued at US$2.75 billion
in 2008, estimated to reach US$5 billion by 2012 with
an annual growth rate of nearly 15%.[1] According to a
study by Ernst and Young, the size of the Indian medical
equipment industry was $2.16 billion in 2006 (Rs. 9500
crores) and expected to reach $3.2 billion by 2009 (Rs.
14,080 crores) and $4.5 billion by 2012 (Rs. 19,800
crores).[2] Although we are aware that the above figures
have their limitations as they are from different sources,
yet they give an estimate of the significant size of the
market for medical equipment, indicating that the demand
has registered very high growth rates since the 1990s.

Manufacture of Medical Equipment


in India
Scattered data regarding production of medical equipment
and instruments are compiled by the Annual Survey of
Industries and Department of Electronics. Currently
there is indigenous manufacturing capacity for a range
of hospital furniture, medical equipments, appliances
and devices in the country, from low to medium

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Chakravarthi: Medical Equipment Industry in India

technology, developed in the early years of building


self-reliance and reducing imports, with support to small
and medium industry.[3] Small consumables (syringes,
intra-venous sets, gloves, blood-bags, catheters, etc.)
and equipment considered low technology, such as
conventional electrocardiogram (ECGs), defibrillators,
bedside monitors, diagnostic X-ray equipment, therapy
equipment such as diathermy-ultrasound-electrotherapy,
surgical diathermy, respiration monitors, ultrasound
scanners, analytical equipment for pathological and
biochemical analysis, incubators and pacemakers, are
manufactured in the country by local producers with
small capacities. Although necessary expertise and a
certain amount of infrastructure exist in the country,
the local industry has not grown to the required extent
and the micro-processor based counterparts of many
of the above equipment are all imported. Although
Indias medical technology industry is primarily import
dependent, according to industry reports nearly 60% of
what is being manufactured is being exported.[1]
Manufacture of medical electronic equipment forms a
negligible part of total electronics production, but there
has been a steady increase in value of its production. In the
15 year period from 1988 to 2003, its value increased 12
fold to Rs. 421.81 crores, at about 18% per annum.[4] The
increase in the manufacture of some imaging equipment,
such as medical X-ray and ultrasound equipment can
be attributed to the manufacture/assembly of these by
multinationals such as General Electric (GE) and Siemens,
for sale in India and other neighboring countries.
Overall, while manufacturing may seem to be picking up in
the country, it is more in the form of subsidiaries, as joint
ventures and as part of contract manufacturing. Increasingly,
multinationals and other medical device companies from
US are outsourcing several of their activities to India, as a
way of reducing costs in manufacturing, R and D, clinical
trials and other medical services. India is considered to
have several advantages lower labor costs, a large
English-speaking and skilled labor force, the government
providing conducive conditions by setting up special
economic zones (SEZs) as in China and an increasing
middle-class population seeking better health-care. The
activities being shifted comprise: making India the base
for business operations in the South Asian region; contract
manufacturing of components by Indian companies for
global markets; developing software for the advanced
imaging equipment manufactured by them; undertaking
R and D, clinical research and trials for their products.

The creation of conditions favorable to foreign


manufacturers, both, in terms of favoring imports to
meet domestic requirements and in setting up SEZs to
manufacture for international markets, not necessarily
to meet indigenous requirements, has to be placed in
light of developments in the international economy
and the importance attached to economic growth at all
costs. Medical equipment industry of the US and other
countries, looking at developing countries to increase
their profits through expanding markets and reducing
their costs as well, receive much support in this from
their governments and international trade arrangements
such as World Trade Organization (WTO) and General
Agreement on Trade and Services (GATS).
The net effect is that there is manufacturing of products
that are of use at the secondary and tertiary levels of healthcare and/or for export: such as cardiac stents, catheters,
ultrasound scanners, etc. Indian industry now wants to
produce specialized medical equipment and devices for
international markets. Indian manufacturers therefore
are now lobbying for support to local manufacturing
through concessions and setting up of SEZs, as in China.
The Association of Medical Devices and Suppliers
of India (AMDSI) wanted the government to set up
medical technology parks in the country and give income
tax and other benefits. A Medipark has been set up in
suburban Chennai, for manufacture of medical devices
and equipment of international standards.[5]

Import of Medical Equipment


Since the 1990s the manufacturing base has been
adversely affected by liberalized imports of medical
technology, ranging from low to high technology
equipment and devices. In the 1990s there was a
steep increase in the variety and quantum of import
of medical equipment into the country.[6] According
to industry estimates currently almost 90% of devices
and disposables are being imported at international
prices.[1,7] For instance, the market for Indian syringes
and needles was growing in the 1990s due to certain
government incentives for brand promotion abroad, but
these incentives were taken back in 2001, leading to
adverse impact on local manufacture. The Indian syringes
and needles manufacturing industry has since been facing
competition from cheap Chinese and Korean imports; as
a result most of the manufacturers have started trading in
cheap imported needles and syringes, repackaging and
selling them under any name.[8] The import of syringes

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Chakravarthi: Medical Equipment Industry in India

(with needles) increased by 122.7% between 2004 and


2005 and by 69% between 2006 and 2007.[6]
In the 15 year period from 1988 to 2003 there has been
an increase in imports by 25 times. The items imported
range from:
Small consumables such as surgical gloves, syringes,
needles, cannulae and catheters;
A wide range of implantable and other cardiac,
orthopedic, dental and auditory devices; stethoscopes,
thermometers and blood transfusion apparatus;
assisted respiration apparatus;
Dental chairs and drills, eye and ear, nose and
throat precision instruments and lasers, etc., imaging
equipment; auto-analyzers, anesthetic equipment,
ECGs and electroencephalograms, linear accelerators
used in cancer therapy, hemodialysis machines,
endoscopes, laparoscopes, baby incubators and other
equipment.[6]
There is also import and sale of used, refurbished equipment,
especially of computed tomography (CT)-scanners and
magnetic resonance imaging (MRI) equipment, even
by the manufacturers themselves. However, there are
no estimates as to what proportion of the imported
equipment is re-conditioned and who the buyers are.
Use of such equipment carries concerns of obsolescence,
non-availability of spares, accessories and upgrades, aftersales support and warranty problems, all of which have
implications for safety, proper calibration and reliability.[9]

Promotional Activities by the Medical


Equipment Industry Research,
Education, Lobbying
The growing health-care market in India is being
treated by all segments of business, including medical
technology manufacturers, as a big marketing opportunity.
Medical technology is aggressively promoted through
frequent and regular trade exhibitions and conferences
in metropolises and bigger towns across the country.
The medical equipment manufacturers and traders also
undertake several kinds of lobbying activities with the
government. Several industry associations have been
formed to promote industry interests. The CII National
Committee on Healthcare and Medical Equipment
Division and the Indian Health-care Federation are some
examples. In this regard, we find that there are two kinds
of associations one representing the corporate entities

205

and multinationals in equipment manufacture as well as


the corporate hospitals; and the other such as the AMDSI,
representing the smaller manufacturers and traders, who
are demanding support/concessions for local manufacture
in Special Economic Zones (SEZs).
Medical equipment manufacturers are now organizing
activities such as education and training to complement
the manufacturing and trading. This activity, extremely
well-institutionalized by the pharma industry through its
vast network of medical representatives, is now spreading
to the medical equipment industry. A major activity of
the multinational imaging manufacturers such as GE,
Philips, Siemens is that of organizing education, training
and research in medical imaging and trials in academic
centers. At present, continuing medical education courses,
seminars, conferences, product launches at medical
conferences, live operative workshops demonstrating
the use of endoscopy equipment, demonstrations of
ultrasound scanning on live subjects and exhibitions
of medical equipment, all sponsored and funded by
pharmaceutical and equipment industry, are the major
means of acquiring and exchanging information about
new technologies and procedures. An example is that
of endoscopy and minimal invasive surgery that was
introduced during the 1980s. It has been said: The
surgical revolution set in train by the technological
advances of the mid-1980s was largely uncontrolled,
with few safeguards to protect patients from enthusiastic,
but inadequately trained surgeonsPeople took it up
before it was proven and before they acquired necessary
skills. Some people have certainly tried in the past to do
operations for which they were insufficiently trained.
Some patients definitely died as a result.[10]
MNCs such as GE and Philips are also entering into
partnerships with private corporate hospitals and diagnostic
centers for R and D, clinical research and trials in India of
equipment, software and imaging agents. Imaging centers,
like the Diwan Chand Agarwal Imaging Research Centre,
Delhi, also function as training and education centers for
the use of specific procedures and technologies.
Some equipment manufacturers have entered into publicprivate partnership arrangements with state governments
to provide diagnostic services. The Government of
Madhya Pradesh, in January 2008, entered into an
arrangement with GE Healthcare and Sanya Hospitals
and Diagnostic Centre, Delhi, to establish an advanced,
diagnostic imaging facility at the Netaji Subash Chandra

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Chakravarthi: Medical Equipment Industry in India

206

Bose Medical College Hospital in Jabalpur. GE installed


the CT and MRI systems, while Sanya invested Rs.
80 million on the equipment and provided trained
professionals to the medical college hospital.[6] The
German company B Braun is investing Rs. 35 crores in
Andhra Pradesh for setting up within medical colleges
and hospitals 11 hemodialysis centers equipped with
111 hemodialysis machines, to provide dialysis services
under the Aarogyasri program.[1]
Given the exorbitant costs of certain medical equipment
(ranging from few lakhs to crores for imaging equipment),
it is not surprising that the medical equipment companies
and suppliers themselves also arrange for leasing medical
equipment, or financing their acquisition. For instance
Siemens reached an understanding with a bank for
financing purchasing of its medical equipment.[11]
Thus, the role of large corporations such as GE and
Philips extends far beyond manufacture into financing,
supplying peripherals, customer advice and education
and they are looking for ways to get into health care
delivery as well. Given the vast resources that are being
put in by the imaging industry, it is not surprising that
medical imaging holds a lot of glamor among sections
of the medical profession and is beginning to occupy a
significant place in medical practice. In several ways,
the immediate source of information about medical
innovations happens to be the industry itself and the
specialists involved in the R and D of the innovation.
Such activities have serious implications for safe and
rational use of medical technologies, more so in a
situation characterized by complete lack of regulations.

Status of Regulations
Lack of standards and regulation for manufacture,
imports and sale of medical equipment
Although there has been an increase in imports and
interest in manufacturing certain kinds of medical
equipment, the government has not devised a system of
regulations and standards for manufacture and import,
and regulation of all these activities. Despite consistent
recommendations by several government committees
regarding standards for medical technology, we find that
there is no initiative by the health ministry to monitor and
regulate such large-scale diffusion of medical equipment
in the country and to lay down guidelines and standards
for their manufacture, import and use for new or existing
technologies, with the exception of X-ray equipment,

which is regulated by the Atomic Energy Regulatory


Board. Although there are some standards laid down
by the Bureau of Indian Standards for some medical
equipment and systems, according to the industry itself,
in the absence of mandatory regulations they are hardly
adhered to. Only recently the Drugs Controller General
of India brought some implantable devices such as stents
and pacemakers under regulation. Sufficient anecdotal
information exists to indicate irrational use of these
technologies and techniques to recover the investment
costs. While irrational use increases cost to patient, the
safety aspect in the use of such technologies (especially
of X-rays and ultrasound) remains ignored by the medical
and public health community and the policy makers.

Lack of regulation of use of medical technology neglecting safety


Policy shifts in the health-care services sector have led to
the creation of markets for specialized medical care relying
on specialized technologies. As in the case of corporate
hospitals sector, where Apollo Hospitals talks of setting
standards through brands, the diagnostic companies are
planning for the creation of brand names and leaders.
Another development since the late 1990s onward is the
setting up of independent, private imaging centers in many
urban areas, which offer a range of imaging facilities.
Diagnostic companies from US, such as Quest, are also
beginning to set up centers in India.[12] These growing
numbers of private hospitals and diagnostic laboratories
across the cities and towns, are the major consumers of
high-tech and other medical equipment. Use of state-ofthe-art equipment is the major selling point for all these
private facilities and acquisition of any new gadget or
equipment is given wide publicity. In fact, they use their
acquisition of advanced technology to create an aura
of expertise, professionalism and quality.
Existing regulations regarding setting up of X-ray facilities
are abysmally ineffective. According to the Head, Directorate
of Radiation Safety, Kerala, about two-thirds of the X-ray and
CT-scan centers were manned by unqualified people and the
shortage of qualified personnel was a critical issue for public
health.[13] Furthermore, a large number of CT-machines were
refurbished equipment (second-hand), whose safety level
could be lower than desirable. The Department of Atomic
Energy and the DRS, that have to monitor and regulate CTX-ray centers, are unable to do so because of shortage of
staff, equipment and other facilities. This indicates the lack
of interest of the government in enforcing safety guidelines
and regulations for medical technology.

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Chakravarthi: Medical Equipment Industry in India

The scenario regarding use of ultrasonography is


not very different from that of CT. According to the
Indian Radiological and Imaging Association (IRIA),
unrestricted access to equipment has prompted
doctors with inadequate training in radiology (general
practitioners, gynecologists and orthopedicians, to set up
imaging centers, leading to wrong diagnosis.[14] Private
medical and diagnostic centers and private practitioners
offer short-term training on the use of latest equipment
and several equipment-based techniques.
Substantial funds have been invested by both, central
and state governments in purchasing medical equipment,
including expensive and the latest advanced
equipment, for the government health services at the
secondary and tertiary levels. In several states, this has
been done as part of the Health Systems Development
Project executed with loans from the World Bank. In
2000, the 11th Finance Commission sanctioned special
purpose grants to several states (Haryana, Orissa,
Karnataka, Tamil Nadu, Uttar Pradesh, Assam, Madhya
Pradesh, Maharashtra) to set up Regional Diagnostic
Centers, at the district level, equipped with CT scanners,
ultrasound scanners, pathology laboratory. However,
Comptroller and Auditor General (CAG) reports over
the years indicate underutilization or non-utilization of
much of this capital investment in central government
hospitals due to lack of skilled personnel.[15] Instead of
taking steps to remedy this situation, it is being used
to delegitimize the public sector health system and
create markets for the medical equipment companies
as well as the service providers, through PPPs for the
provision of diagnostic services at the secondary level.
Implementing the recommendations that have been
made for devising mechanisms of planning purchase,
procurement, management and utilization of medical
equipment in the public sector services [15] would be a
first step in the right direction.

2.

3.

4.

5.

6.

7.

8.

9.

10.
11.

12.
13.

Acknowledgment
The author would like to thank Dr. Ritu Priya and an anonymous
reviewer for valuable suggestions.

15.

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Cite this article as: Chakravarthi I. Medical equipment industry in India:


Production, procurement and utilization. Indian J Public Health 2013;57:203-7.
Source of Support: Nil. Conflict of Interest: No.

Indian Journal of Public Health, Volume 57, Issue 4, October-December, 2013

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