Medical Device Manufacturing in India: CDSCO, BIS & 100% FDI Route

Why Medical Device Manufacturing in India Is a Strategic Opportunity

India's medical devices market, valued at approximately USD 15.2 billion in 2025, is projected to grow more than threefold to USD 50.1 billion by 2030. The country currently imports nearly 80% of its medical devices, creating a structural opportunity for manufacturers willing to set up domestic production. The government has responded with a combination of policy incentives that make India one of the most attractive destinations for medical device manufacturing globally.

Three policy pillars drive this opportunity: 100% foreign direct investment permitted under the automatic route, a Production-Linked Incentive (PLI) scheme with INR 3,420 crore (approximately USD 410 million) in incentives, and dedicated medical device parks in four states providing shared infrastructure. For foreign companies evaluating India entry, the regulatory framework — centred on the Central Drugs Standard Control Organisation (CDSCO) and the Bureau of Indian Standards (BIS) — is the critical path to understand.

This guide covers every regulatory and commercial dimension of setting up medical device manufacturing in India, with specific form numbers, fees, timelines, and compliance requirements current as of March 2026.

FDI Framework: 100% Under the Automatic Route

Medical device manufacturing falls under the automatic route for FDI, meaning no prior approval from the Government of India or the Reserve Bank of India is required for the investment itself. This has been the case since the Cabinet decision in 2015, which separated medical devices from the pharmaceutical sector for FDI policy purposes.

Key FDI Compliance Requirements

While the investment route is automatic, foreign investors must comply with FEMA regulations for all capital inflows:

• FC-GPR filing: Within 30 days of share allotment to the foreign investor
• Annual FLA return: Filed with the RBI by July 15 each year
• Share pricing: Must follow the Discounted Cash Flow (DCF) methodology prescribed under FEMA (Non-Debt Instruments) Rules, 2019
• Downstream investment: If the Indian entity makes further investments, Press Note 3 provisions on downstream investment apply

Entity Structure Options

Foreign manufacturers typically set up one of two structures:

For a detailed comparison of entity structures, see our branch office vs subsidiary comparison. Most medical device manufacturers prefer the WOS route to protect proprietary technology and maintain direct regulatory control over CDSCO filings.

CDSCO: The Central Regulatory Authority

The Central Drugs Standard Control Organisation (CDSCO), operating under the Ministry of Health and Family Welfare (MoHFW), is the apex regulatory body for medical devices in India. Since the Medical Devices Rules (MDR), 2017 came into force, all medical devices sold in India require a valid manufacturing or import licence from CDSCO or the State Licensing Authority (SLA).

Device Classification System

India follows a four-tier, risk-based classification system aligned with the Global Harmonization Task Force (GHTF) framework:

In early 2025, CDSCO undertook a comprehensive reclassification exercise covering 553 medical devices across cardiovascular and neurological segments, aligning India's classification more closely with international standards. The classification of your device determines which authority you apply to, which forms you use, and the level of clinical evidence required.

Manufacturing Licence: Step-by-Step Process

The manufacturing licence process varies by device class. Here is the complete procedure:

Step 1: Company Incorporation

Incorporate the Indian entity using the SPICe+ form on the MCA portal. The entity must be a private limited company or LLP with at least one resident director. File FC-GPR within 30 days of share allotment for the FDI inflow.

Step 2: Facility Setup and GMP Compliance

Establish the manufacturing facility in compliance with Schedule V of the Medical Devices Rules, 2017, which prescribes Good Manufacturing Practices (GMP) requirements. The facility must have:

• Designated clean rooms appropriate to device class
• Environmental monitoring systems
• Quality control laboratory
• Document control systems
• Personnel training and qualification records
• Complaint handling and adverse event reporting procedures

Step 3: Quality Management System (ISO 13485)

Implement an ISO 13485-compliant Quality Management System. The Indian equivalent standard is IS/ISO 13485, published by BIS. Certification from a CDSCO-recognised notified body is required before applying for the manufacturing licence. This covers the entire device lifecycle from design through production, distribution, and post-market surveillance.

Step 4: Application Submission via SUGAM Portal

Submit the application through the CDSCO SUGAM portal (cdscoonline.gov.in):

Step 5: Facility Inspection

The licensing authority conducts a facility inspection to verify GMP compliance, quality systems, and manufacturing capability. For Class A and B devices, the State Drug Controller conducts the inspection. For Class C and D devices, CDSCO's central team inspects the facility.

Step 6: Licence Issuance

Upon successful inspection and document review, the manufacturing licence is issued in Form MD-5 (for Class A and B) or Form MD-9 (for Class C and D). The licence has a five-year validity period, subject to renewal. Since 2024, CDSCO has been moving toward perpetual validity for compliant manufacturers, though this is not yet universally implemented.

Timeline and Costs

BIS Certification: Quality Standards Compliance

The Bureau of Indian Standards (BIS) plays a distinct but complementary role to CDSCO. While CDSCO regulates market authorisation (can you sell the device?), BIS ensures quality conformity to Indian standards (does the device meet the technical specification?).

When BIS Certification Is Required

BIS certification is mandatory for medical devices that fall under compulsory certification orders issued by the Ministry of Health and Family Welfare. The list of devices requiring mandatory BIS certification has been expanding progressively. As of 2026, categories under mandatory BIS certification include:

• Cardiac stents (IS 16349)
• Knee implants (IS 17137)
• Condoms and contraceptive devices
• Orthopaedic implants
• Select IVD reagents

BIS Certification Process

1. Application: Submit to BIS with product specifications, test reports from BIS-recognised laboratories, and manufacturing process details
2. Factory inspection: BIS inspectors verify the manufacturing process, quality control systems, and testing equipment
3. Sample testing: Product samples are tested at BIS-recognised labs against the applicable Indian Standard
4. Licence grant: If compliant, BIS issues a licence to use the ISI mark on the product
5. Surveillance: BIS conducts periodic factory inspections and market surveillance

IS/ISO 13485 — The Quality Management Standard

IS/ISO 13485 is the Indian adoption of the international ISO 13485:2016 standard for medical device quality management systems. BIS has published this as an Indian Standard, and compliance is a prerequisite for both CDSCO manufacturing licences and BIS product certification. The standard covers design controls, risk management, purchasing controls, production controls, corrective and preventive actions, and post-market surveillance.

PLI Scheme: Government Incentives for Manufacturing

The Production-Linked Incentive (PLI) scheme for medical devices, launched with a total outlay of INR 3,420 crore (approximately USD 410 million), provides financial incentives to manufacturers who establish or expand production in India.

Scheme Structure

Eligibility for Foreign Companies

Foreign companies manufacturing in India through a wholly-owned subsidiary or joint venture are eligible for PLI benefits. The investment must be in new manufacturing capacity (greenfield) or significant expansion of existing capacity. The incentive is calculated on incremental sales over the base year, incentivising companies to scale production rapidly.

Medical Device Parks: Shared Infrastructure

The government has established dedicated medical device parks in four states to provide shared testing, validation, and manufacturing infrastructure:

• Andhra Pradesh (Visakhapatnam): Focus on consumables and disposables
• Tamil Nadu (Chennai): Focus on diagnostic equipment and electronic medical devices
• Madhya Pradesh (Indore): Focus on general medical devices and implants
• Himachal Pradesh: Focus on pharmaceutical-adjacent medical devices

These parks offer common facilities including sterilisation plants, testing laboratories, warehousing, and regulatory support services. The capital cost advantage of locating in a medical device park can be 20-30% compared to standalone facility development, primarily from shared infrastructure and state-level incentives including stamp duty exemptions, power subsidies, and reduced land costs.

Tax Considerations for Foreign-Owned Manufacturers

Medical device manufacturers in India benefit from competitive tax rates:

Corporate Tax

New manufacturing companies incorporated after October 1, 2019 can opt for the concessional corporate tax rate of 15% (effective rate approximately 17.16% including surcharge and cess) under Section 115BAB of the Income Tax Act, provided they commence manufacturing by March 31, 2024 (deadline expired — no extension granted). Companies not qualifying for this rate can opt for 22% (effective 25.17%) under Section 115BAA.

GST on Medical Devices

GST rates on medical devices vary by category: 5% on life-saving devices like pacemakers and stents, 12% on most diagnostic equipment and implants, and 18% on certain electronic medical devices and accessories. Input tax credits on capital goods, raw materials, and services used in manufacturing are fully available.

Transfer Pricing

Transfer pricing is a critical consideration for foreign-owned manufacturers, particularly for technology licence fees from the parent, management service charges, raw material or component imports from affiliated entities, and export pricing for devices manufactured in India and sold to group entities abroad. All inter-company transactions must be at arm's length, with contemporaneous documentation maintained under Indian transfer pricing regulations.

Customs Duty

India has been progressively increasing customs duties on imported medical devices to incentivise domestic manufacturing. Basic customs duty ranges from 7.5% to 15% on most imported medical devices, with certain high-value equipment attracting concessional rates under specific government notifications. Manufacturers importing capital goods and raw materials for domestic production can access duty exemptions through the Advance Authorisation scheme and EPCG scheme.

Regulatory Compliance: Post-Licence Obligations

Obtaining the manufacturing licence is the beginning, not the end, of regulatory compliance. Ongoing obligations include:

Adverse Event Reporting

Manufacturers must report serious adverse events to CDSCO within specific timeframes — typically within 10 days of becoming aware of the event, with a follow-up report within 30 days. Failure to report adverse events can result in licence suspension.

Post-Market Surveillance

For Class C and D devices, CDSCO requires structured post-market surveillance programmes including complaint analysis, trend reporting, and periodic safety update reports.

Product Recall Procedures

Manufacturers must maintain documented recall procedures and notify CDSCO immediately in the event of a product recall. The recall classification system mirrors the FDA approach with Class I (serious health risk), Class II (temporary or reversible health consequences), and Class III (unlikely to cause adverse health consequences) categories.

Annual Compliance

Beyond CDSCO-specific requirements, the manufacturing entity must maintain general corporate compliance including FLA returns, annual filings with the Registrar of Companies, GST returns, and transfer pricing documentation. For a complete overview, see our guide on annual compliance for foreign-owned companies.

Software as Medical Device (SaMD): Emerging Regulatory Framework

On October 21, 2025, CDSCO released a draft guidance document on Medical Device Software (SaMD), aligning India's approach with globally harmonised practices. This is particularly relevant for foreign companies developing AI-powered diagnostics, telemedicine platforms, and digital health applications.

The guidance clarifies that standalone software performing a medical function — such as diagnostic algorithms, clinical decision support tools, or patient monitoring applications — qualifies as a medical device and requires CDSCO registration. The classification of SaMD follows the same risk-based Class A through D framework, with the intended clinical purpose and the significance of the information provided determining the classification.

For technology companies entering India's medical device space, this creates both an opportunity and a compliance requirement. The regulatory pathway for SaMD is expected to be faster than for physical devices, given the absence of manufacturing facility requirements, but clinical evidence expectations remain equivalent.

Import vs Domestic Manufacturing: Regulatory Comparison

Foreign companies must decide between importing finished devices into India and manufacturing locally. The regulatory and cost implications differ significantly:

The clear policy direction is toward domestic manufacturing. Companies that begin with an import licence and subsequently transition to local manufacturing often find it advantageous to maintain both licences during the transition period, selling imported devices while establishing local production capability.

Intellectual Property Protection

Foreign medical device manufacturers investing in India must address IP protection from the outset. India is a signatory to the TRIPS Agreement and provides patent, trademark, and design protection. Key considerations include:

• Patent registration: File patents with the Indian Patent Office before disclosing technology to Indian partners or employees. India follows a first-to-file system, and the patent term is 20 years from the filing date.
• Trade secret agreements: All employees and contractors should sign confidentiality and non-disclosure agreements. Indian courts have increasingly enforced trade secret protections, though statutory protection is through contract law rather than a standalone trade secrets statute.
• Technology licence agreements: If the foreign parent licences technology to the Indian subsidiary, the agreement must be at arm's length for transfer pricing compliance. Technology licence fees are typically subject to withholding tax at 10% (reducible under applicable DTAA).
• Trademark protection: Register trademarks for device brand names and logos in India before market launch. Registration takes 18-24 months but provides 10-year renewable protection.

Clinical Evidence and Testing Requirements

CDSCO requires clinical evidence appropriate to the risk class of the device. The requirements vary significantly:

Class A and B Devices

Generally, pre-clinical testing and performance evaluation data are sufficient. Clinical investigations are typically not required unless the device incorporates novel technology or materials not previously used in India.

Class C and D Devices

Clinical investigation data is required for new devices without a predicate. For devices substantially equivalent to devices already licensed in India, CDSCO may accept international clinical data from well-regulated markets (FDA, CE Mark, TGA, PMDA) through the Substantially Similar Devices (SSD) pathway, reducing the need for India-specific clinical trials. This pathway can save 12-18 months compared to conducting fresh clinical investigations in India.

Clinical Investigation Regulations

If clinical trials are required, they must comply with the Medical Devices (Amendment) Rules and the CDSCO clinical investigation guidelines. Ethics committee approval is mandatory, and trials must be registered on the Clinical Trials Registry of India (CTRI). Compensation provisions for trial-related injuries are more stringent than in many other jurisdictions, and this liability must be factored into the clinical development budget.

Common Mistakes Foreign Manufacturers Make

• Starting CDSCO filing before ISO 13485 certification: The quality management system must be in place and certified before CDSCO accepts the manufacturing licence application. Sequencing this incorrectly adds 3-6 months to the timeline.
• Underestimating state-level approvals: For Class A and B devices, the State Drug Controller — not CDSCO — is the licensing authority. State-level processing times vary significantly, with some states taking 3-4 months longer than others.
• Ignoring BIS requirements: Manufacturers focused on CDSCO sometimes overlook that certain device categories also require BIS certification. Selling a device with CDSCO approval but without required BIS certification is a violation.
• Inadequate adverse event infrastructure: CDSCO increasingly scrutinises post-market surveillance capabilities during the licence application process. A robust pharmacovigilance system should be in place before applying.
• Transfer pricing disputes: Technology licence fees and management charges from the foreign parent are common areas of tax authority challenge. Conservative benchmarking and robust documentation are essential from day one.

India vs Other Manufacturing Destinations

For foreign medical device companies evaluating multiple manufacturing locations, India's proposition is increasingly competitive:

India's combination of a 15% manufacturing tax rate, 5% PLI incentive, large and growing domestic market, and 100% FDI access makes it a compelling choice for companies pursuing the China-plus-one strategy. For more on this topic, see our analysis of China-plus-one manufacturing in India and sectors where India offers better FDI terms than China and Vietnam.

Key Takeaways

• 100% FDI is permitted under the automatic route for medical device manufacturing, with no government approval required for the investment — only FEMA compliance filings
• CDSCO manufacturing licences take 4-12 months depending on device class, with fees ranging from INR 5,500 (Class A/B) to INR 51,000+ (Class C/D) per site
• BIS certification is separately required for device categories under compulsory certification orders, and is distinct from the CDSCO manufacturing licence
• The PLI scheme offers 5% on incremental sales over a five-year period, with 22 greenfield projects already commissioned and 55+ devices in production
• New manufacturing companies can access a 15% corporate tax rate under Section 115BAB, making India's effective tax burden among the lowest for medical device manufacturers globally

For foreign companies evaluating India entry for medical device manufacturing, our FDI advisory service covers entity structuring, regulatory strategy, and end-to-end compliance setup. See also our foreign subsidiary registration service for the company incorporation process.