India’s MedTech Atmanirbharta

India’s medical device market is growing rapidly, with the market expected to expand at ~11% CAGR over the next five years. Yet India continues to rely heavily on imports for high-value medical devices and, more importantly, for many of the components that sit underneath them. Building a competitive domestic component ecosystem is therefore critical not only for Atmanirbharta, but also for making India a globally competitive MedTech manufacturing hub. 

Exhibit 1: India’s MedTech market is growing rapidly, creating a strong base for localization

A typical medical device brings together mechanical, electrical / electronic, fluidic and optical components, alongside specialised materials and sub-assemblies. This creates an opportunity for Indian manufacturers to participate at multiple points in the value chain- not just in final assembly.

Exhibit 2: MedTech devices bring together a diverse ecosystem of components and suppliers

A clinical chemistry analyzer can be used as an example device to illustrate just how many layers this ecosystem spans. It is assembled from five major modules, which are in turn built from four categories of components- each sourced from its own base of raw materials and specialised suppliers.

Exhibit 3: Clinical chemistry analyzer components

However, much of this underlying value chain remains dependent on imported components. For the clinical chemistry analyzer, import dependence is concentrated in a few high-value sub-assemblies, while lower-value items are largely sourced domestically. Import substitution can also create a direct economic benefit for manufacturers. Moving from imported finished units to semi-knocked-down assembly and, eventually, local manufacturing can reduce final cost and increase margins, albeit with additional investment in manufacturing capabilities.

Exhibit 4: Import dependence is concentrated in a few high-value components

Localization can improve economics - not just reduce imports

The case for localization becomes particularly compelling when component import dependence is examined at the economy-wide, not just the product, level. ~85% of import value is concentrated across just 25% HS codes, pointing to a focused opportunity rather than a need to localize every component simultaneously. High-value areas such as MRI systems, X-ray tubes, detectors, probes, IVD analyzers and pacemakers can form the starting point for targeted localization. India's existing strengths in electronics, precision engineering, tooling and advanced manufacturing- supported by shared testing and prototyping infrastructure- can help suppliers from adjacent sectors enter MedTech faster. The timing is also increasingly favourable: manufacturing investments are already underway, with around INR 1,153 crore reportedly invested in domestic production of products including MRI, CT, LINACs, C-arms, valves and stents.

Exhibit 5: Localization can materially improve manufacturing economics

The next phase of Atmanirbharta, therefore, is not simply about making more devices in India. It is about building the component capabilities underneath them- prioritising high-value opportunities, leveraging cross-sector industrial strengths and creating partnerships between global OEMs and Indian suppliers. With the right combination of demand, technology partnerships, infrastructure and policy support, India can move from assembly-led manufacturing to a deeper, globally competitive MedTech value chain.

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