The Union cabinet is expected to consider tomorrow liberalising foreign direct investment (FDI) policy for the cash-starved medical devices sector.

The proposal to relax the policy has been mooted by the Commerce and Industry Ministry.

Sources said that the cabinet will take up the matter tomorrow, as the government is looking to relax the policy for the cash-starved medical devices sector so as to attract more investments and boost the domestic manufacturing.

At present, the medical devices sector falls under the pharmaceutical category and is accordingly subjected to FDI limits and other conditions such as mandatory government nods.

While 100 per cent FDI in permitted in the pharma sector, the FDI is permitted through automatic route in the case of greenfield investment or new venture and the Foreign Investment Promotion Board (FIPB) approval is required in the case of brownfield investment or in existing companies.

There are several other riders, including FDI in medical devices sector being permitted through the government-approval route and the industry has been demanding that it should be put under the automatic route.

Stressing on the need for greater FDI in medical devices and equipment sectors, the industry feels there is no threat of mergers and acquisitions from multi-national firms as domestic companies are not big, unlike the drug firms.

As per estimates, India imports about 70 per cent of its requirement of medical devices. The industry size in the country is about USD 7 billion.

Medical devices include wide range of products such as sutures, implants and surgical instruments.

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