Government extends medical device PLI to 2035-36, relaxes rules to encourage investment | Today’s news
New Delhi: The Center on Tuesday extended the Production Linked Incentive (PLI) scheme for domestic manufacturing of medical devices till 2035-36 and invited fresh applications, leveraging the available expenditure of around ₹2,700 crore, the drug ministry said in a statement.
Following the evaluation of the first phase of the program, the government redesigned eligibility criteria and application processes to lower barriers to entry. The online application portal will be launched within 10 days and will offer an open-ended window.
Within a revised framework titled PLI-MD 2.0, the government removed the minimum sales threshold that was previously mandatory to claim the cash payout and reduced the minimum investment requirement. Manufacturers can apply for multiple product categories with a three-year period for setting up greenfield or brownfield facilities.
The scheme includes four segments: medical consumables, disposables and implants; critical components; emerging cutting-edge medical equipment; and devices that are currently only assembled domestically. The financial incentive will decrease over time, averaging roughly 5% for consumables and implants, 6% for assembled hardware, and 9% for critical parts and complex diagnostic machines.
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The official statement outlined the dual objective of deepening local added value and expanding supply networks. “Focusing on the production of critical components under this scheme would help achieve value chain integration and also promote the MSME (Micro, Small and Medium Enterprises) sector, he said.
The policy also seeks to shift domestic production from basic packaging to advanced engineering. “In the consumer and disposable segment, we will focus on creating manufacturing scale and world-class quality,” the department noted, adding that the aim is to support deep manufacturing of advanced equipment such as 3-Tesla MRI scanners, PET-CT machines, ultrasound consoles and high-performance IVD analyzers that are not made in India.
The first phase of the scheme, which was introduced in FY21, led to the domestic production of more than 60 high-end devices and sub-assemblies, generating output worth over ₹16,000 million crowns.
Products produced locally under the initiative include linear accelerators, CT scanners, 1.5-Tesla MRI machines, mammography units, catheterization labs, X-ray tubes, dialyzers and cardiac implants.
Changes welcome
Domestic manufacturers have welcomed the changes, saying the removal of fixed operating thresholds will encourage wider industry involvement. “This is a significant step towards building a globally competitive, self-sustaining MedTech ecosystem under the Make in India vision,” said Rajiv Nath, Forum Coordinator, Association of Medical Devices Industry of India (AiMeD).
“Imports of medical devices are expected to exceed ₹1 trillion this year, India is at a critical juncture. There is a clear choice before us: continue to import technology or create a policy ecosystem that attracts investment, builds domestic manufacturing capacity, generates highly skilled jobs and strengthens self-sufficiency in healthcare,” said Nath.
He said a supportive framework including tariff rationalization, special medical devices law, purchase preference for genuine manufacturers and balanced trade margins policy can transform India from a large consumer market to a global MedTech manufacturing powerhouse.
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Industry leaders also highlighted the focus on suppliers and core Tier II parts that have forced equipment manufacturers to rely on foreign suppliers.
“The increased focus on critical component manufacturing is particularly significant as components are the backbone of the MedTech industry. Developing a robust domestic component ecosystem will help reduce import dependency, strengthen supply chain resilience and enable deeper domestic manufacturing,” said Himanshu Baid, Managing Director, Poly Medicure Ltd.
“Equally encouraging are the investor-friendly reforms that have been introduced to facilitate doing business. Simplifying the scheme’s guidelines, removing the minimum sales threshold requirement for incentives and reducing the minimum investment requirement will make the scheme more accessible, flexible and attractive to existing producers and new investors,” Baid said.
India is the fourth largest market for medical devices in Asia and among the top 20 globally. However, hospitals and diagnostic laboratories continue to rely on foreign suppliers for 70 to 80% of their equipment needs, especially electronic diagnostic and radiology hardware.
Under National Medical Devices Policy 2023, the center aims to expand the domestic market from US$11 billion in 2020 to US$50 billion by 2030. The extension of fiscal incentives until 2036 is intended to reduce import bills, anchor long-term capital and integrate domestic manufacturers into global supply chains.
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