Material Insights · Understanding the Material World

Healthcare services and Medical devices

Hospitals and diagnostic centres are the buyers of medical devices, and about 70% of India's device market is met by imports (2024 assessment); price caps on stents and state support for device parks are the two policy levers on this link.

Healthcare services (industry) and Medical devices (industry): 5 relationships.

How they are linked

1. Buys from

Physical flow · ₹2.4 per ₹100 · Healthcare services buys from Medical devices

Hospitals and labs buy scanners, analysers, implants and disposables for treatment and testing.

  • ₹2.4 of every ₹100 of Healthcare services output, all rounds (India 2022)
  • ₹1.7 bought directly

The rupee share understates dependence, because large equipment is capital spending rather than a purchased input. Price indices move together over a year (correlation about 0.41 over 12 months, US PPI), with healthcare prices leading by about three months.

Sources: OECD; Material Insights (World Bank, FRED, IMF data)

2. Industry input

Physical flow · Criticality 4 of 5 · Medical devices to Healthcare services

Three enterprise types in healthcare depend on devices: hospitals need equipment and disposables, and diagnostic labs need analysers and scanners.

A hospital cannot run surgery or imaging without devices and their service contracts, so dependence is high. In the other direction, device makers depend on hospitals and diagnostic chains as their main customers, rated 3 of 5.

Enterprise types that depend on it:

  • Hospitals, diagnostic chains and device-service firms: the users of devices (criticality 3 of 5)

Sources: Material Insights

3. Import dependence

Shared risk · Strong · Indian hospitals rely on imported devices

Much high-value equipment and many implants are imported, so hospital equipment costs follow import prices and the rupee.

  • about 70% share of India's medical device market met by imports, government assessment, 2024
  • US$ 5,284 million imports of electromedical equipment, FY2024-25

The government judged imports at more than 85% of the market in 2020, so the share has fallen but remains high. Electromedical imports alone came to about US$ 24.6 billion over the five years to FY2024-25.

Sources: Medical Dialogues

4. Device price caps

Policy · High in India · The government caps prices of some devices sold to patients

Hospitals had been earning large margins on implants, so the drug price regulator fixed ceiling prices on coronary stents.

  • ₹29,600 ceiling price of a drug-eluting stent, February 2017
  • up to 85% cut in stent prices

The ceiling for bare metal stents was set at ₹7,260. The regulator had found trade margins on stents of up to 654%, so the cap mainly moved income from hospitals and distributors to patients.

Sources: Millennium Post (PTI)

5. Device parks and PLI

Policy · High in India · India subsidises local device making for its hospitals

To cut import dependence, the government funds common facilities in device parks and pays incentives on extra domestic sales.

  • ₹400 crore outlay for device parks, up to ₹100 crore per park
  • ₹3,420 crore outlay for the device PLI scheme, FY2020-21 to FY2027-28

Four states were approved for parks: Uttar Pradesh, Tamil Nadu, Madhya Pradesh and Himachal Pradesh. By mid 2025 three parks, at Greater Noida, Ujjain and Kanchipuram, were at an advanced stage, with total project cost over ₹871 crore, and PLI firms had eligible sales of ₹10,413 crore, including ₹5,002 crore of exports, to March 2025.

Sources: Medical Dialogues; Press Information Bureau, Ministry of Chemicals and Fertilizers

For investors

Key learnings

  1. Hospitals spend about ₹2.4 per ₹100 of output on devices, but the dependence is high because equipment and service cannot be replaced quickly.
  2. With about 70% of devices imported, hospital equipment costs rise when the rupee weakens.
  3. Price caps can move margins between hospitals and device makers, as with stents in 2017, so regulatory risk sits on both sides.

What to track

  • Medical device imports by category: Shows progress of import substitution and cost exposure (Monthly · DGCI&S)
  • NPPA price notifications for devices: New caps cut margins for hospitals and suppliers (As issued · NPPA)
  • Rupee to US dollar rate: A weaker rupee raises hospital equipment costs (Daily · RBI)

For policymakers

Key learnings

  1. Import dependence of about 70% leaves Indian hospitals exposed to foreign supply and currency moves.
  2. Device parks and PLI target local manufacturing; by mid 2025 three of the four approved parks were at an advanced stage.
  3. Price caps protect patients but must be set so that device supply and quality are kept.

What to track

  • Import share of device market: The main measure of self-reliance (Annual · Department of Pharmaceuticals)
  • Device park progress and occupancy: Shows whether parks attract manufacturers (Half-yearly · Department of Pharmaceuticals, Parliament replies)
  • PLI eligible sales and exports: Measures output from the incentive (Annual · Department of Pharmaceuticals)

India

India imports about 70% of its medical devices; device parks in Uttar Pradesh, Tamil Nadu, Madhya Pradesh and Himachal Pradesh and a ₹3,420 crore PLI scheme aim to build local supply for its hospitals.

Sources

  1. OECD Input-Output Tables 2025 edition, India 2022, OECD
  2. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
  3. Industry map: Healthcare services, Material Insights (2026)
  4. Medical device imports still at 70%, India spent over USD 25 billion in 5 years: Parliament informed, Medical Dialogues (2025)
  5. Govt slashes coronary stent prices by up to 85 per cent, Millennium Post (PTI) (2017)
  6. Schemes for promotion of medical device parks and PLI for medical devices, Press Information Bureau, Ministry of Chemicals and Fertilizers (2022)