Updated on 19 June 2013
Mr Shiraz Bugwadia, managing director, O3 Capital, India, and Mr Prashant Jain, AVP, O3 Capital, India
Given that India pharma market currently ranks 13th by value and fourth by volume globally, and it has the maximum number of US FDA approved plants outside of the US and has already bagged strong credentials in low-cost quality drug manufacturing. Not only India is seen as a fast growing market for foreign players to set up shops, the country also serves as a contract manufacturer and an R&D partner to many MNCs. Almost all major pharma and medical devices companies, namely, Merck, Pfizer, GSK, Medtronic, B Braun... have a presence in India.
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Medical equipment/devices market should be one of the focus areas for global players to invest in India. Overall market is growing at a high rate of 21 percent and is poised to reach $6 billion by 2013. Also, the market is fragmented with a handful of Indian companies above $20 million in revenues. A case in point is the recent acquisition of Alder Mediequip, an Indian producer of orthopaedic trauma products, by Smith & Nephew. The acquisition would give Smith & Nephew a platform to provide and develop products for the mid-tier market in India and for exports as well.
Recent regulatory challenges on Foreign Direct Investment (FDI) which requires approval from Foreign Investment Promotion Board (FIPB) of India, even for a minority foreign investment, may dampen the interest of foreign players in mid-term but as uncertainty lifts over these issues, long-term prospects seem bright.