The Reserve Bank of India has notified that the alteration in the FDI policy now allows 100 per cent FDI (foreign direct investments) in medical devices category.
The RBI (Reserve Bank of India) has approved and provides the changes in the Foreign Direct Investment Policy, which allows 100 % open window for foreign direct investment in the segment of medical devices.
The earlier FDI policy for pharmaceutical sector has been revisited and it has now been made clear that there is going to be a special carve out for medical devices which was earlier given the same treatment as pharmaceutical sector. The decision indicates that, FDI up to 100 per cent through automatic route, has been permitted for manufacturing of medical devices in the country. Medical devices are inclusive of all kinds of implants, equipment, material, apparatus, appliance, gadgest and other tools or articles, whether used alone or in combination, including the health software developed by its manufacturer to be used specially for human beings or animals for one or more of the specific purposes. It also includes calibrator, a device which is a reagent, kit, equipment, control material or system whether used in combination or alone thereof desired to be used for providing information for medical or diagnostic examination and purposes.
This is a major positive change for Indian companies as currently India imports more than 70 percent of medical devices.
It is a great encouragement for FDI inflows in this area which has eased the norms for medical devices industry. Permission is made under automatic route, means foreign investors now will not have to take the permission from Foreign Investment Promotion Board (FIPB) to acquire an existing company or set up a new manufacturing unit in the medical devices sector. This is a significant step as permission for FDI used to delay the entire process for months in past. Foreign organizations underwent the Foreign Investment Promotion Board (FIPB) earlier as medical devices used to come under the drug category.
Automotive route for FDI in medical devices will help companies attain approvals way faster and easier than earlier. The new policy will help both greenfield (new project) and brownfield projects (existing units) in industry. There were certain conditions to take the approvals for 100% FDI.
Earlier, Brownfield projects used to undergo a government approval route while new projects under automatic route by following certain norms. Commenting on the development, business consultancy and tax consultancy firm, Curoso Consulting Pvt Ltd Vice President Prakash C Pandey asserted: “This step will provide with the medical devices industry much sought after impetus and focus on providing capacity building, product development, Industry boom and set the strong pillars for India to become a key player in the medical devices market across the globe similar to pharmaceuticals.”
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