India’s ambitious efforts to lower its reliance on medical device imports are being curbed by stringent Production Linked Incentive (PLI) scheme requirements and persistent infrastructure underutilization, according to a recent report by the Boston Consulting Group (BCG). The report, titled “Unlocking ‘India for the World’ in MedTech,” highlights that the MedTech sector’s PLI funds allocation is “majorly skewed towards large players,” with MSMEs struggling to participate due to high incremental revenue thresholds and substantial upfront capex.

Industry observers note the PLI scheme’s incremental sales criteria of Rs 60 crores is unattainable for most small businesses, causing the program to fall short of its expected outcomes. The scheme grants incentive payouts of 4–6% on incremental sales, but qualifying companies must show a minimum year-on-year increase in revenue, which limits the sector’s diversity and innovation.

Infrastructure challenges also persist, as state-led MedTech parks remain underutilized with average occupancies around 54%. While mature clusters like Andhra Pradesh MedTech Zone (AMTZ) reach 70% occupancy, newer parks in Tamil Nadu and Telangana lag at 40–60%. The report attributes slow progress in high-end device manufacturing, such as CT and MRI systems, to limited foundries for medical-grade materials and high capex barriers.

Despite these challenges, recent government initiatives have produced initial gains: FY 2021–2022 exports grew from $2.9 billion to $3.8 billion in 2023–24, while import volumes fell by 20 percentage points to 60% of the total domestic market. However, most domestic growth is concentrated in low-end, high-volume devices, with high-end production scaling yet to take off.

BCG recommends streamlining incentive criteria and enhancing infrastructure utilization to attract multinational players and foster sector-wide growth. The full report provides actionable insights for industry stakeholders and policymakers.