GOVERNMENT POLICIES, REFORMS & FUNDING INITIATIVES
Recent Major Announcements & Ongoing Reforms (Last 6 Months – July 2025 – January 2026)
- UNION BUDGET 2026 – HEALTHCARE SECTOR FOCUS
BioPharma SHAKTI Initiative: Rs 10,000 crore commitment
- Focus: Health advancement through knowledge, technology, innovation
- Supports domestic manufacturing, R&D infrastructure strengthening
Electronics Manufacturing: Rs 40,000 crore allocation
- Impact on medical electronics & diagnostic equipment manufacturing
- Component-level domestic capacity building
Infrastructure & Capacity:
- District-level oncology care expansion
- NIPER (National Institute of Pharmaceutical Education & Research) expansion
- CDSCO regulatory & execution capability strengthening
- New critical care blocks in hospitals
Human Capital:
- 1 lakh allied health professionals training
- 1.5 lakh multi-skilled caregivers training
- Healthcare education & medical colleges expansion
SIDMA Relevance: Signals sustained government commitment to healthcare manufacturing; enables ecosystem for equipment makers
- INDIA-EU FREE TRADE AGREEMENT (FTA) – EFFECTIVE JANUARY 2026
Medical Device Tariff Impact:
- 90% of medical devices from EU: 0% tariff (Previously 27%)
- Specific coverage: Optical, medical & surgical equipment
- Immediate implementation
Market Effects:
- Import Side: EU device imports become ~27% cheaper; increases competition for domestic manufacturers
- Export Perspective: Indian device manufacturers may benefit from improved component sourcing from EU; potential for EU partnerships
- Policy Trade-off: EU seeks regulatory alignment; India negotiating safeguards against predatory imports from third countries
SIDMA Relevance: MIXED – Competitive pressure from EU imports, but enables component sourcing; seeks regulatory harmonization with global standards
- US TARIFF ASYMMETRY ADVANTAGE (FY25-26)
Export Advantage:
- Chinese devices to US: 30–34% tariff
- Indian devices to US: ~18% tariff
- Indian Advantage: ~12 percentage point differential
- Impact Sectors: Low-margin categories benefit most; surgical instruments, diagnostic reagents
Import Opportunity:
- US medical device imports to India: Rs 14,019 crore in FY25
- High-end imports (diagnostics, surgical instruments, imaging, robotic navigation) becoming more cost-competitive
- Benefits end-users; pressure on domestic high-end device makers
SIDMA Relevance: POSITIVE FOR EXPORTS – Tariff structure favors Indian medical device exports to US market; momentum from China+1 diversification strategy
- CDSCO MEDICAL DEVICE REGULATIONS UPDATES
Oncology Device Risk Classification (January 2, 2026)
- 77 oncology devices explicitly classified into 4 risk classes (A, B, C, D)
- Class A (Low Risk): Surgical consumables (cervical scrapers, cone knives), external hyperthermia applicators
- Class B (Low-Moderate Risk): Breast transilluminators, flexible bronchoscopes, scalp cooling systems, balloon kyphoplasty
- Class C (Moderate-High Risk): AI/ML-aided cancer detection software explicitly classified here (same rigor as active medical devices), microwave ablation, robotic guidance systems
- Class D (High Risk): Stereotactic radiosurgery, alternating field cancer treatment systems, brachytherapy equipment
Impact: Regulatory clarity eliminates ambiguity; manufacturers can identify exact pathway; AI/ML software now explicitly regulated
Medical Device Software Guidance (Draft, Jan 2026)
- Same compliance standards as hardware devices
- Software design, risk management, clinical evaluation required
- Quality management systems mandatory
- Post-market surveillance applies
Subsequent Importer Mechanism (Sept 15, 2025)
- Online portal allows registration as “Subsequent Importer” for already-approved devices
- Eliminates duplicate approval for multiple importers
- Simplifies supply chain entry
SIDMA Relevance: ENABLING – Clarity on device classification reduces regulatory uncertainty; subsequent importer mechanism facilitates distribution network expansion
5. Medical Device Regulatory Amendments (Proposed – Expected 2026)
Draft proposals include:
- Perpetual Validity Licenses: Manufacturing and import licenses now perpetual (subject to annual retention fees instead of periodic renewal)
- Class A Registration Pathway: Simplified registration for low-risk, non-sterile, non-measuring devices
- Inspection Rationalization: Risk-based inspection scheduling; sampling optimization
- IVD Testing Laboratory Requirements: Enhanced reporting obligations; standardized quality schedules
Benefit: Reduced regulatory friction; greater certainty on license validity; streamlined compliance
MEDICAL DEVICES SECTOR TRAJECTORY
| Metric | Current (2025) | Projection (2030) | Notes |
| Market Size | US$14–16 billion | US$30–50 billion | 15–25% CAGR growth |
| Import Dependence | ~70% | Declining | PLI & manufacturing initiatives reducing imports |
| PLI Exports | INR 58.69 cr (9M FY25) | Scaled multiples expected | Early-stage; high growth potential |
| Global Position | Emerging | Top-5 MedTech hub (aspiration) | Government policy-driven shift |
| US Export Advantage | 12 pt tariff differential | Sustained (China+1 strategy) | Competitive advantage in mid-value devices |