Designing MedTech in India: How Startups Can Win Amid Regulatory Chaos

India's medical technology sector presents a compelling investment thesis: a $12 billion market in 2023-24 projected to reach $50 billion by 2030. Yet for startups, success demands more than riding the growth wave, it requires navigating regulatory complexity, building robust design processes, and leveraging government incentives strategically.

Market Reality: Opportunity Amid Import Dependence

India's MedTech landscape reveals both promise and challenge. While over 70% of Indian MedTech startups integrate AI, IoT, and cloud computing for diagnostics and remote monitoring, the country remains 80-85% import-dependent. This creates a strategic opening for domestic startups willing to build comprehensive solutions.

The gap isn't just manufacturing capacity. As Anish Bafna, MD & CEO of Healthium Medtech, explains: "We'd like to make more products, but would need around 200 component suppliers. The component suppliers do not exist in India because the ecosystem is not developed." This ecosystem void represents both barrier and opportunity for startups that can build integrated supply chains.

Yet despite these infrastructure challenges, Indian MedTech companies possess unique advantages that position them for success. As Prabhat Maheshwari of Amocare notes, "Our literature, flexibility, and growing expertise give us a competitive edge." This represents the opportunity amid the chaos; Indian startups that can navigate regulatory complexity, while building global-standard products, position themselves to capture both domestic growth and international markets.

Regulatory Framework: From Friction to Strategic Advantage

India's transition from treating medical devices as "drugs" under the 1940 Drugs and Cosmetics Act to the dedicated Medical Device Rules (MDR) 2017 has created a more structured regulatory environment. The Central Drugs Standard Control Organisation (CDSCO) now operates a risk-based classification system—Class A (low-risk) to Class D (high-risk)—aligned with global standards.

Strategic Compliance Approach:

The key is treating regulatory compliance as product strategy, not administrative overhead. Startups should adopt ISO 13485 [source] quality management systems from early development stages and engage CDSCO before prototyping. This front-loaded approach accelerates approval timelines and builds quality into core processes.

Dozee, the Bangalore-based remote patient monitoring startup, exemplifies this strategy. By initiating clinical validation studies during development and partnering closely with hospitals for iterative testing, they accelerated their CDSCO approval process. Their contactless monitoring solution, using AI and ballistocardiography, now operates in over 370 hospitals across India while maintaining ISO compliance for international expansion.

Design-Driven Development: Implementing User-Centric Methodologies

While many MedTech startups recognize the importance of user-centered design, translating this principle into practice requires structured methodologies. The most successful companies implement comprehensive co-design frameworks that systematically engage all stakeholders throughout the development lifecycle.

Co-Design Framework for MedTech Startups:

1. Clinical Partnership Integration: Establish formal partnerships with healthcare institutions early in the development process. These partnerships should facilitate regular usability studies in real clinical environments.
2. Iterative Prototyping with End Users: Deploy rapid prototyping cycles that include actual healthcare workers and patients. Focus on workflow integration rather than standalone functionality.
3. Edge Case Validation: Test solutions in low-resource settings with poor connectivity and non-specialist users, conditions common across India's healthcare landscape.

For Software as Medical Device (SaMD) companies, this approach is particularly critical. Beyond accuracy, solutions must be explainable, auditable, and interoperable within existing healthcare workflows. The upcoming EU Directive 2019/882 [source] adds complexity for startups with global ambitions, making early design validation essential.

Government Incentives: Leveraging Policy Support Strategically

The Production Linked Incentive (PLI) scheme offers significant opportunities for qualifying startups. The scheme provides financial incentives for domestic manufacturing while the Medical Device Parks initiative promises infrastructure support. However, execution varies significantly between states.

The broader policy ecosystem includes:

• PLI Scheme: Targets specific MedTech categories with manufacturing incentives
• PRIP Scheme: Rs 5,000 crore allocated for medical device development and manufacturing
• MedTech Mitra Initiative: Designed to ease regulatory navigation and capability building
• National Single Window System (NSWS): Streamlining approval processes (still evolving)

The National Medical Devices Policy 2023 signals government commitment, but startups must navigate implementation gaps. State-level execution varies, requiring careful selection of manufacturing locations and partnership strategies.

Building Competitive Advantage: Talent and Supply Chain Strategy

Beyond leveraging government support, startups must address fundamental ecosystem challenges to build sustainable competitive advantages. The two most critical areas are talent development and supply chain strategy.

MedTech currently lacks established academic programs and regulatory training infrastructure. This creates both challenge and opportunity for startups willing to invest in capability building.

Kriya Medical Technologies exemplifies this approach by building in-house learning systems, a costly but strategically necessary investment. As founder Anu Moturi observes, "While India's regulatory environment for pharma is well-established, MedTech regulations are still developing. There is a need for more clarity and industry involvement." Companies that invest early in regulatory expertise and clinical partnerships gain significant competitive advantages over those that treat these as afterthoughts.

This trend toward specialized capability building is gaining momentum across the ecosystem. Organizations, like ours (Non-Zero), are establishing dedicated MedTech wings focused on emerging trends and training specialized talent, recognizing that the future of Indian MedTech depends on developing domain-specific expertise.

The component supplier shortage creates a chicken-and-egg problem: without local demand, suppliers won't emerge; without suppliers, manufacturers can't achieve scale economics. Startups should consider strategic partnerships with existing component manufacturers, vertical integration for critical components, or participation in regional supply chain development through government programs.

Strategic Recommendations for MedTech Startups

Based on the analysis above, successful MedTech startups should follow a phased approach that systematically addresses regulatory, design, and market challenges:

Phase 1: Foundation Building

• Engage CDSCO and implement ISO 13485 before prototyping
• Establish clinical partnerships for co-design and validation
• Develop regulatory expertise in-house or through strategic partnerships

Phase 2: Product Development

• Conduct iterative usability studies in real clinical environments
• Focus on workflow integration and edge case performance
• Build for global regulatory standards while addressing local market needs

Phase 3: Market Entry

• Leverage government incentive programs strategically
• Build supply chain partnerships or vertical integration capabilities
• Plan international expansion from domestic market success

Conclusion: Long-Term Competitive Positioning

India's MedTech sector is transitioning from import dependence to innovation leadership. Startups that invest early in regulatory compliance, co-design methodologies, and ecosystem engagement are building products that succeed both domestically and internationally.

The regulatory complexity and infrastructure gaps that challenge many startups also create moats for those who navigate them successfully. This isn't just a market opportunity, it's a moment where strategic thinking and execution can build lasting competitive advantages in a rapidly growing sector.

For Indian MedTech entrepreneurs, success depends on building the right capabilities to capture this growing market sustainably.

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