Definition of ‘Medical Devices’ Amended in the FDI Policy
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi, has given its approval to a number of amendments in the FDI Policy. These are intended to liberalise and simplify the FDI policy so as to provide ease of doing business in the country. In turn, it will lead to larger FDI inflows contributing to growth of investment, income and employment.
Foreign Direct Investment (FDI) is a major driver of economic growth and a source of non-debt finance for the economic development of the country. Government has put in place an investor friendly policy on FDI, under which FDI up to 100%, is permitted on the automatic route in most sectors/ activities. In the recent past, the Government has brought FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance, Pension, Other Financial Services, Asset reconstruction Companies, Broadcasting, Civil Aviation, Pharmaceuticals, Trading etc.
FDI policy on Pharmaceuticals sector inter-alia provides that definition of medical device as contained in the FDI Policy would be subject to amendment in the Drugs and Cosmetics Act. As the definition as contained in the policy is complete in itself, it has been decided to drop the reference to Drugs and Cosmetics Act from FDI policy. Further, it has also been decided to amend the definition of ‘medical devices’ as contained in the FDI Policy.
“This is just housekeeping and tidying up”, said Rajiv Nath, Forum Coordinator, (AiMeD) Association of Indian Medical Device Industry.
“DoP should learn from DiPP and MoH&FW and delink Devices from Pharmaceutical after treating Devices as sub sector of Pharmaceutical (Drugs ). Both are medical healthcare products but different and need different policies to boost investment in this sector. We have always welcomed 100% Greenfield investment in India for Medical Devices but are opposed to 100% Auto route without oversight of DoP for brownfield takeover of the few indigenous medical device manufacturers who have been providing an alternate affordable access to Cost effective Desi Brands ” said Nath.