Lok Sabha Question No. 1129 (UNSTARRED), answered on 2024-02-08
Subject: Indigenous Manufacturing of Medical Devices and Toys
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Vinod Chavda

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO.   1129 TO BE ANSWERED ON 08.02.2024

## INDIGENOUS MANUFACTURING OF MEDICAL DEVICES AND TOYS

1129. SHRI VINOD L. CHAVDA:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether the Government is aware of the fact that the country is import dependent in terms of medical equipments and toys;
- (b) if  so,  whether  the  Government  is  promoting  and  supporting  MSMEs  in  indigenous manufacturing of medical devices and toys;
- (c) whether  the  Government  proposes  to  set  up  medical  equipments  and  toys  manufacturing clusters in Bhuj, Abdasa, Gandhidham, Rapar, Mandvi and Anjar districts of Gujarat to help develop these areas; and
- (d) if so, the details thereof and if not, the reasons therefor?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI BHANU PRATAP SINGH VERMA)

(a) to (d): The value of imports and exports of Medical Devices is given below:

(Values in USD million)

| Imports   | Imports   | Imports   | Exports   | Exports   | Exports   |
|-----------|-----------|-----------|-----------|-----------|-----------|
| 2020-21   | 2021-22   | 2022-23   | 2020-21   | 2021-22   | 2022-23   |
| 6242      | 8540      | 7492      | 2532      | 2923      | 3391      |

To  encourage  domestic  manufacturing  of  high  end  medical  devices  to  reduce  imports dependence  and  to  boost  domestic  manufacturing,  Department  of  Pharmaceuticals,  Ministry  of Chemicals and Fertilizers has taken several measures which are as under:

- (i) Production Linked Incentive (PLI) scheme for promoting domestic manufacturing of Medical Devices (PLI MD) with total financial outlay of Rs. 3,420 crore and tenure from FY 2020-21 to FY 2027-28. The financial incentive is given to selected companies at the rate of 5% on incremental sales of medical devices manufactured in India and covered under the four target segments of  the  scheme,  for  a  period  of  five  (5)  years.  The  four  target  segments  are  -  (I) Radiotherapy,  (II)  Imaging  Devices,  (III)  Anaesthesia,  Cardio-respiratory  &  Critical  Care, (IV)  Implants.  26  participants  have  been  approved  under  the  scheme,  of  which  11  are MSMEs.
- (ii) Production Linked Incentive (PLI) scheme for Pharmaceuticals, with a financial outlay of Rs. 15,000  crores  and  the  tenure  from  FY  2020-21  to  FY  2028-29,  provides  for  financial incentive  to  55  selected  applicants,  which  includes  five  selected  applicants  of  In-Vitro Diagnostics (IVD) devices, of which four are MSMEs. The incentive period under the scheme is for six years.

- (iii) The scheme Promotion of Medical Devices Parks, with a total financial outlay of  Rs.  400 crore and the tenure from FY 2020-21 to FY 2024-25, provides for the maximum financial assistance  of  Rs.  100  crore  each  to  4  selected  States/Union  Territories  for  creation  of Common Infrastructure Facilities in the upcoming Medical Devices Parks. Under the scheme, final approval for financial assistance of Rs. 100 crore each, has been given to the States of Himachal Pradesh, Madhya Pradesh, Tamil Nadu, and Uttar Pradesh.
- (iv) The  scheme Assistance  to  Medical  Device  Clusters  for  Common  Facilities  (AMD-CF) intends  to  provide  financial  incentive  to  Medical  devices  clusters  to  develop  common infrastructure facilities like Medical devices testing labs, E-waste treatment facility, logistic centre. The scheme will provide financial assistance to National or State level Government or Private institutions interested to establish or strengthen testing facilities for  medical devices. Application  window  for  applicant  has  been  opened  in  January,  2024.  MSMEs  are eligible for availing the incentive under the scheme.

Further,  Department  for  Promotion  of  Industry  and  Internal  Trade,  Ministry  of  Commerce and Industry  is providing all round support for creating conducive manufacturing ecosystem for the Toys industry. Some of the measures include promoting Made in India toys; designing of toys based on Indian values, culture, and history; using toys as a learning resource; organizing hackathons and grand challenges for toy designing and manufacturing; monitoring quality of toys; restricting imports of  sub-standard and unsafe toys and promoting indigenous toy clusters. As a result of the various measures taken by the Government, the manufacturing ecosystem Indian Toy industry has witnessed remarkable  growth,  leading  to  substantial  decrease  of  52%  in  overall  import  of  toys  from  USD 332.55 million in FY 2014-15 to USD 158.66 million in FY 2022-23 and increase of 239% in the exports of toys  from USD 96.17 million in FY 2014-15 to USD 325.72 million in FY 2022-23. Steps taken by the Government to further enhance exports of Made in India toys are:

- (i) Directorate General of Foreign Trade (DGFT) vide Notification dated 02.12.2019 mandated sample testing of each consignment and no permission for sale unless the quality testing is successful. In case of failure, the consignment is either sent back or destroyed at the cost of the importer.
- (ii) Basic Custom Duty (BCD) on Toys-HS Code-9503 has been increased from 20% to 60% in February 2020, subsequently increased to 70% in March 2023.
- (iii) The Government issued Toys (Quality Control) Order, 2020 on 25.02.2020 through which toys  have  been  brought  under  compulsory  Bureau  of  Indian  Standards  (BIS)  certification with effect from 01.01.2021. This QCO is applicable to both domestic manufacturers as well as foreign manufacturers who intend to export their toys to India.
- (iv) QCO on Toys was amended on 11.12.2020 to exempt goods and articles manufactured and sold by artisans registered with Development Commissioner, Ministry of Textiles and also by  registered  proprietor  and  authorized  users  of  a  product  registered  as  Geographical Indication  by  the  Office  of  Controller  General  of  Patents,  Designs  and  Trademarks (CGPDTM), Govt. of India (GoI).

- (v) BIS  made  special provisions on 17.12.2020 to grant license to micro scale units manufacturing toys without testing facility for one year and not to insist on establishing inhouse facility. Subsequently, on industry representation, the relaxation has been extended up to a period of 3 years.
- (vi) BIS  has  granted  1454  licenses  to  domestic  manufacturers  and  36  licenses  to  foreign manufacturers for safety of toys as per IS 9873/IS 15644 as in January 2024.
- (vii) Under  the  recent  Free  Trade  Agreements  (FTA)  including  India-UAE  Comprehensive Partnership  Agreement  (CEPA)  and  India-Australia  Economic  Cooperation  and  Trade Agreement Trade (ECTA), the partner countries are providing zero duty market access for exports of Indian toys.

Further  to  support  the  MSME  sector,  the  Ministry  of  MSME  is  implementing  various schemes  for  providing  credit  support  for  new  enterprises  creation,  technology  upgradation,  skill development and infrastructure development throughout the country including Gujarat.  Under the Scheme  of  Fund  for  Regeneration  of  Traditional  Industries  (SFURTI),  19  toy  clusters  have  been approved benefitting 10969 artisans, which are as under:

| S. No.      | State          |   Number of Clusters | Total Number of Artisans   |
|-------------|----------------|----------------------|----------------------------|
| 1           | Tamil Nadu     |                    1 | 460                        |
| 2           | Andhra Pradesh |                    1 | 231                        |
| 3           | Karnataka      |                    2 | 830                        |
| 4           | Madhya Pradesh |                    9 | 6,218                      |
| 5           | Nagaland       |                    1 | 270                        |
| 6           | Rajasthan      |                    3 | 1,958                      |
| 7           | Uttar Pradesh  |                    2 | 1,002                      |
| Grand Total | Grand Total    |                   19 | 10969                      |

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