Govt extends medical devices PLI to 2035–36, relaxes rules to spur investment

New Delhi: The Centre on Tuesday extended the production-linked incentive (PLI) scheme for domestic manufacturing of medical devices up to 2035-36 and invited fresh applications, tapping an available outlay of roughly ₹2,700 crore, the department of pharmaceuticals said in a statement.

Following an assessment of the scheme’s first phase, the government has overhauled eligibility criteria and claim processes to reduce entry barriers. An online application portal will go live within 10 days, offering an open-ended submission window.

Under the revamped framework, titled PLI-MD 2.0, the government has scrapped the minimum sales threshold previously mandatory to claim cash payouts and lowered the minimum investment requirement. Manufacturers can apply across multiple product categories, with a three-year window provided to set up greenfield or brownfield facilities.

The scheme covers four segments: medical consumables, disposables, and implants; critical components; nascent high-end medical equipment; and devices currently only assembled domestically. The financial incentive will taper over time, averaging roughly 5% for consumables and implants, 6% for assembled hardware, and 9% for critical parts and complex diagnostic machinery.

The official statement outlined the dual aim of deepening local value addition and expanding supplier networks. “The focus on critical component manufacturing under the scheme would help achieve value chain integration and also give a boost to the MSME (micro, small and medium enterprises) sector,” it said.

The policy also seeks to shift domestic output away from basic packaging towards advanced engineering. “In the consumables and disposables segment, the focus shall be on creating manufacturing scale and world-class quality,” the department noted, adding that the objective is to promote deep manufacturing of advanced equipment such as 3-Tesla MRI scanners, PET-CT machines, ultrasound consoles, and high-throughput IVD analyzers that are not made in India.

Rolled out in FY21, the first phase of the scheme led to domestic production of more than 60 high-end devices and sub-assemblies, generating output valued at over ₹16,000 crore.

Products made locally under the initiative include linear accelerators, CT scanners, 1.5-Tesla MRI machines, mammography units, catheterization laboratories, X-ray tubes, dialyzers, and cardiac implants.

Changes welcomed

Domestic manufacturers welcomed the changes, noting that removing rigid operational thresholds will encourage wider industry participation. “This is a significant step towards building a globally competitive, self-reliant MedTech ecosystem under the Make in India vision,” said Rajiv Nath, forum coordinator at the Association of Indian Medical Device Industry (AiMeD).

“With medical device imports expected to exceed ₹1 trillion this year, India stands at a critical juncture. The choice before us is clear: continue importing technology or create a policy ecosystem that attracts investments, builds indigenous manufacturing capacity, generates high-skilled employment, and strengthens healthcare self-reliance," Nath said.

He said a supportive framework comprising tariff rationalization, a dedicated medical devices law, procurement preference for genuine manufacturers, and balanced trade margin policies can transform India from a large consumer market into a global MedTech manufacturing powerhouse.

Industry executives also highlighted the focus on tier-II suppliers and basic parts, which have forced device makers to rely on overseas vendors.

“The enhanced focus on critical component manufacturing is particularly significant, as components are the backbone of the MedTech industry. Developing a robust indigenous component ecosystem will help reduce import dependence, strengthen supply chain resilience and enable deeper domestic manufacturing,” said Himanshu Baid, managing director at Poly Medicure Ltd.

“Equally encouraging are the investor-friendly reforms introduced to improve ease of doing business. Simplification of scheme guidelines, discontinuation of the minimum sales threshold requirement for claiming incentives and reduction in the minimum investment requirement will make the scheme more accessible, flexible and attractive to both existing manufacturers and new investors,” Baid said.

India is the fourth-largest medical devices market in Asia and ranks among the top 20 globally. However, hospitals and diagnostic labs continue to rely on overseas suppliers for 70% to 80% of their equipment needs, especially electronic diagnostic and radiology hardware.

Under the National Medical Devices Policy 2023, the Centre aims to expand the domestic market from $11 billion in 2020 to $50 billion by 2030. The extension of fiscal incentives until 2036 is intended to cut import bills, anchor long-term capital, and integrate domestic producers into global supply chains.

About the Author

Priyanka Sharma is a journalist at Mint, where she covers the Union Ministry of Health and the pharmaceutical industry. Her work focuses on explaining government policies and how they impact healthcare and the medicine market in India. With 12 years of experience in journalism, she has built a reputation for providing clear and honest news on important health topics that affect the entire country.<br><br>Her educational background includes a journalism degree from the prestigious Indian Institute of Mass Communication (IIMC) and specialized training in public health from the Public Health Foundation of India. Before her current role at Mint, Priyanka worked with India Today, The Pioneer, and ANI. She also served as a lead consultant for the National Health Authority, which gave her firsthand knowledge of how the government manages large-scale health programmes.<br><br>Priyanka is based in New Delhi and is an avid traveller who loves visiting the mountains. She has a great interest in regional flavours, particularly South Indian food.