The government is all set to launch a probe into the growing use of Chinese medical devices in Indian healthcare sector, amid the perception that these products involve data privacy and national security risks.
The issue was discussed at an inter-ministerial meeting chaired by commerce minister Piyush Goyal early this month. Representatives from the domestic medical technology (MedTech) industry also participated in the meeting.
Concerns over data theft and malware threat
“The health data captured by the China-made medical devices, especially IT-enabled equipment, can potentially be used by Chinese firms for monitoring and espionage. Being a hostile nation, China can install malware or bugs in its devices that can be activated whenever they want. There are also concerns of national security threat because Chinese devices are increasingly used by defence forces where there could be cases of data theft,” said a source.
China is the second-largest supplier of medical devices in India after the US. Imports of these products from China have more than doubled from $622 million in FY20 to $1.3 billion in FY20, registering a compounded annual growth rate (CAGR) of 21%. In the same period, the country’s overall imports of medical devices have grown at a CAGR of 8.8%.
The official said that the taken inputs from the industry and is expected to start a formal investigation shortly. “From small pacemakers to large MRI machines, every Chinese device is prone to security risk. We have been asked to give additional information which will be shared with the ministry in the due course,” said official of a MedTech association.
China’s dominance through rerouting and price advantage
Experts said that the actual share of Chinese firms in India’s MedTech market could be even higher than what official data suggest because of the alleged dumping of goods by that country by rerouting them through other countries like Malaysia, Hong Kong, Singapore and countries with whom India has free-trade agreements. “The trans-shipments from these neighbouring countries have shot up in the recent years indicating that China is dumping its devices through these hubs to bypass regulations. It’s expected that China will overtake US in FY26 to become the largest exporter of medical devices to India,” said the official quoted above.
Currently, Indian imports from China is concentrated around diagnostic imaging equipment, in vitro diagnostics reagents, and surgical instruments.
China’s rise in the Indian MedTech sector has been largely attributed to its cost leadership and non-adherence to global standards which makes Chinese devices cheaper than their global competitors. “China has its own standards for several devices. These standards are not harmonised with the global standards which results in their competitive pricing,” the official said.
Early this year, the US FDA flagged concerns with Chinese-made medical devices after a cybersecurity agency discovered “backdoor” in a hospital monitoring equipment.
