New Delhi: The government is expected to soon take a decision on liberalising foreign direct investment (FDI) policy for the cash-starved medical devices sector.
The proposal to relax the policy was mooted by commerce and industry ministry. The final note was sent to the cabinet secretariat and the Union Cabinet is likely to take up the issue this week, sources said.
The government is looking at relaxing the policy for the cash-starved medical devices sector so as to attract more investments and boost domestic manufacturing, they added.
"The ministry has received comments from all concerned departments and ministries on the matter," another source said.
At present, the medical devices sector falls under the pharmaceutical category and is accordingly subjected to FDI limits and other conditions such as mandatory government nods.
India allows 100% FDI in pharma sector. While FDI is permitted through automatic route in the case of greenfield investment or new venture, the Foreign Investment Promotion Board (FIPB) approval is required in the case of brownfield or in existing companies.
Besides, there are several other riders. FDI in medical devices sector is permitted through the government-approval route and the industry has been demanding that it be put under the automatic route.
India needs FDI in medical devices and equipment sectors. According to industry experts, the sector is not modern and there is no threat of mergers and acquisitions from multi-national firms as domestic companies are not big unlike drug firms.
As per estimates, India imports about 70% of its requirement of medical devices. The industry size in the country is about $7 billion.
Medical devices include wide range of products such as sutures, implants and surgical instruments.
