Make in India & Public Procurement of Medical Devices
What medical device manufacturers should know about domestic manufacturing, local content, self-certification, documentation and government procurement requirements.
Read Article Contact ACPLKey Topics Covered
- ✓ Make in India
- ✓ Public Procurement
- ✓ Local Content
- ✓ Local Content Calculation
- ✓ Self-Certification
- ✓ Documentation
- ✓ Government Tenders
- ✓ Compliance Considerations
Make in India and Public Procurement of Medical Devices
India has been encouraging domestic manufacturing and greater value addition across important sectors. The medical device industry is an important part of this broader manufacturing landscape.
With demand for medical devices from hospitals, laboratories and healthcare institutions, government procurement can create opportunities for manufacturers that satisfy applicable procurement and local-content requirements.
The Government of India introduced the Public Procurement (Preference to Make in India) Order, 2017. The Department of Pharmaceuticals issued specific guidelines for medical devices on 18 May 2018 addressing the application of the framework to medical device procurement.
The source document considered in this article discusses category-wise local-content requirements, calculation methods, self-certification, verification and record-keeping.
Why Is Local Content Important?
Medical devices range from simple consumables and surgical instruments to electronic equipment, implants and in-vitro diagnostic products. The 2018 guidelines therefore prescribed different local-content requirements for broad product categories.
| Medical Device Category | Minimum Local Content |
|---|---|
| Medical disposables & consumables | 50% |
| Medical electronics, hospital equipment & surgical instruments | 25% |
| Implants | 40% |
| Diagnostic reagents / IVDs | 25% |
The source document also indicated proposed increases in these percentages over the following three years, subject to industry data and subsequent orders.
How Is Local Content Calculated?
The 2018 guidelines described local content in terms of eligible domestic component costs compared with the applicable total product cost.
For example, if eligible domestic component cost is ₹50 and the applicable total product cost is ₹100, the resulting local-content percentage would be 50%.
The source document indicated that total product cost could include applicable direct material and component costs, manpower, overheads and profit, while taxes and duties were excluded as specified in the guidelines.
Cost Approaches
- Cost of inputs used in manufacturing
- Ex-factory price after specified deductions
- Market price after specified deductions
- Applicable freight and insurance considerations
- Warranty-related costs
- Imported Bill of Material considerations
- Applicable sales and marketing deductions
Self-Certification of Local Content
The 2018 source guidelines provided for self-certification of local content at the applicable tender, bidding or solicitation stage.
Why Documentation Matters
Manufacturers claiming local-content benefits should maintain appropriate records supporting the percentage declared in their procurement documentation.
Records May Include
- Bill of Material
- Domestic component details
- Imported component details
- Supplier records
- Manufacturing records
- Costing information
- Local-content calculations
High-Value Medical Device Procurement
According to the provided 18 May 2018 source document, procurement with a value exceeding ₹10 crore involved additional certification requirements relating to local-content claims.
The document referred to certification from an appropriate professional authority, including a statutory auditor, cost auditor, practicing cost accountant or chartered accountant, as applicable.
The ₹10 crore threshold and professional-certification requirements described here are based on the supplied 18 May 2018 document. Manufacturers should verify the latest applicable procurement rules, notifications and tender conditions before relying on these provisions for a current procurement process.
Documentation Medical Device Manufacturers Should Maintain
Manufacturing Records
- Manufacturing process details
- Bill of Material
- Domestic component information
- Imported component information
- Supplier information
- Production cost records
Financial & Costing Records
- Costing statements
- Ex-factory price information
- Purchase records
- Cost-accounting documentation
- Applicable auditor certification
Regulatory & Procurement Records
- Product details
- Tender documents
- Local-content declaration
- Self-certification / affidavit
- Evidence supporting domestic value addition
Record Retention
The provided 2018 source document stated that relevant information under its prescribed certification format was to be maintained for eight years and made available for verification by the appropriate authority.
What If a Local-Content Claim Is Challenged?
The supplied 2018 guidelines included a mechanism for handling complaints concerning local-content declarations.
Where a complaint was raised against a bidder's declaration, the procuring entity could examine relevant documents and take an appropriate decision. Where further clarification was required, the matter could be referred to the Grievance Redressal Committee under the Department of Pharmaceuticals, according to the source document.
This makes accurate calculations and proper record-keeping important for manufacturers making local-content claims.
Medical Device Public Procurement Checklist
Before participating in applicable government procurement, manufacturers can consider organizing the following information and documentation.
Product classification, specifications and relevant details.
Domestic and imported component information.
Relevant supplier and procurement documentation.
Production processes and manufacturing cost information.
Clear working showing the calculation methodology.
Applicable costing and ex-factory price information.
Applicable declarations and affidavits.
Relevant government procurement documentation.
Evidence supporting domestic value addition.
Applicable certification wherever required.
What Does Make in India Mean for Medical Device Manufacturers?
The Make in India approach has encouraged domestic manufacturing and value addition in India's medical device sector.
For manufacturers participating in public procurement, meeting an applicable local-content requirement is only one part of the process. Companies should also be able to demonstrate how their local-content percentage was calculated and maintain appropriate supporting documentation.
Domestic Sourcing
Identify eligible domestic inputs.
Manufacturing
Maintain appropriate manufacturing records.
Costing
Maintain relevant costing information.
Calculation
Document the applicable local-content calculation.
Documentation
Keep evidence supporting procurement declarations.
How ACPL Can Support Medical Device Companies
Accredited Consultants Private Limited (ACPL) provides regulatory consulting and compliance support to pharmaceutical, medical device and healthcare companies.
Medical Device Regulatory Assessment
Support in understanding applicable regulatory and compliance requirements for medical devices.
Regulatory Strategy
Consulting support for developing an appropriate regulatory strategy based on the product and business requirements.
India Market Entry
Support for businesses assessing regulatory requirements associated with entering the Indian medical device market.
Regulatory Documentation
Support with applicable regulatory documentation and compliance activities.
Medical Device Compliance
Consulting support for applicable medical device regulatory and compliance requirements.
Government Procurement Readiness
Support in understanding applicable procurement-related regulatory and documentation considerations.
Medical Device Regulatory Consultant Across India
ACPL provides regulatory consulting support to pharmaceutical, medical device and healthcare businesses across India.
Frequently Asked Questions
What is Make in India for medical devices?
Make in India is a broader government initiative intended to encourage domestic manufacturing and value addition. The medical device sector forms part of this manufacturing landscape.
What is local content in medical devices?
Local content represents the applicable proportion of eligible domestic value or component cost in relation to the relevant total product cost under the applicable procurement framework.
How was local content calculated under the 2018 guidelines?
The supplied 18 May 2018 document described local content using domestic component cost in relation to total product cost. Current procurement requirements should be verified before relying on this methodology.
What documents should medical device manufacturers maintain?
Relevant records may include BOM, domestic and imported component details, supplier records, manufacturing records, costing information, local-content calculations, tender documents and applicable declarations.
Can ACPL support medical device regulatory compliance?
Yes. ACPL provides regulatory consulting and compliance support to pharmaceutical, medical device and healthcare companies based on their applicable requirements.
Are the 2018 local-content percentages still applicable?
The percentages in this article are taken from the supplied 18 May 2018 source document. The document itself states that the guidelines were applicable for one year or until further orders. Current requirements should therefore be verified before making procurement or compliance decisions.
Important Regulatory Disclaimer
This article is based on the Department of Pharmaceuticals guidelines dated 18 May 2018 provided as the source document.
The source document states that the guidelines were applicable for one year or until further orders. Accordingly, the local content percentages, thresholds, certification requirements and procurement provisions described in this article should not be assumed to represent the current legal position.
Manufacturers and suppliers should verify the latest applicable Government of India notifications, Public Procurement (Preference to Make in India) requirements, Department of Pharmaceuticals provisions, tender conditions and amendments before relying on these provisions.
Need Medical Device Regulatory Support in India?
Discuss your medical device regulatory, compliance and market-entry requirements with ACPL. Our team can assess your requirements and provide appropriate regulatory consulting support.
Contact ACPLB-3, Sector-6, Noida – 201301, Uttar Pradesh, India
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