The Narendra Modi government has just removed a clause from India's foreign direct investment (FDI) policy to clear unintended obstacles which seemed to be delaying potential investments in several technologies, products and services that come under the broad definition of 'medical devices'.

The clause that is no longer applicable had earlier restricted the scope of 'medical devices' to what is defined in the Drugs and Cosmetics Act, 1940. Now, with the delinking in place, the government has permitted a wide range of items that can attract up to 100 per cent FDI via the automatic route. These include any instrument, apparatus, appliance, implant, material or other articles, whether used alone or in combination, plus any software tool, intended by its manufacturer to be used especially for human beings or animals for diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder.

Any product or software that will assist diagnosis, monitoring, treatment, alleviation of, or assistance for, any injury or handicap, investigation, replacement or modification or support of the anatomy or a physiological process, supporting or sustaining life; disinfection of medical devices, control of conception and which does not achieve its primary intended action in or on the human body or animals by any pharmacological or immunological or metabolic means, but which may be assisted in its intended function by such means will now be considered as medical device irrespective of its status in the eyes of the drug regulator.

The definition of medical device for FDI purpose also includes accessories to such instruments, apparatus, appliance, material or other articles, a device which is reagent, reagent product, calibrator, control material, kit, instrument, apparatus, equipment or system, whether used alone or in combination, intended to be used for examination and providing information for medical or diagnostic purposes by means of in-vitro examination of specimens derived from the human body or animals.

The Cabinet decision states as the definition in the FDI policy is complete in itself, the reference to Drugs and Cosmetics Act in FDI policy will be dropped. These and other tweaks to the FDI Policy are intended to simplify the FDI policy to provide ease of doing business in the country and, in turn, lead to larger FDI inflows contributing to the growth of investment, income and employment, a government press release stated. – Business Today 

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