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New Delhi, July 29, 2025 — In a recent engagement with Niti Aayog, healthcare industry body NATHEALTH has called for a sweeping transformation of India’s regulatory and licensing framework for the sector. The association, which represents hospitals, diagnostics, and MedTech businesses, underscored that India’s labyrinthine, fragmented regulatory landscape is stifling business growth and impeding the ease of doing business for healthcare organizations.
NATHEALTH cited its whitepaper, co-authored by EY, which categorizes healthcare as one of India’s three most regulated sectors, pointing out that a staggering 60% of regulations are decentralized. The whitepaper details how these fragmented rules across states create compliance challenges, especially since regulatory standards frequently change with minimal transition time for businesses to adapt.
Ameera Shah, President of NATHEALTH, told the media, “Regulatory standards not only vary state by state, but there is also little clarity or standardization, making it extremely difficult for businesses to achieve compliance.” She further noted that while the diagnostics segment has relatively lighter regulations, hospitals and MedTech sectors are burdened by far more stringent rules.
On the MedTech front, Vice President Himanshu Baid raised concerns over medical devices being treated as drugs, which has resulted in excessive regulation. He highlighted that recent Quality Control Orders (QCOs) are hampering domestic manufacturing of medical devices, and pointed to regulatory overlaps between different government departments—most notably, between the Central Drugs Standard Control Organization (CDSCO) and the Ministry of Consumer Affairs.
Among the 70 regulatory and licensing hurdles detailed in the whitepaper, twelve were marked as “top challenges needing urgent attention.” For hospitals, the report lists burdensome requirements like multiple state registrations and administrative loads for practitioners, as well as complicated licensing regimes for blood banks. For the diagnostics and MedTech sectors, inconsistent licensing authorities and the lack of regulation standardization across states were cited as major hurdles. The paper also notes long-standing structural issues, such as state-imposed restrictions on hospital building heights that limit bed capacity, and hefty penalties for delays in consent renewals.
NATHEALTH has recommended a suite of reforms including a single-window clearance system, the adoption of international standards (such as ISO), and digitization of health records and signatures to streamline compliance. Notably, Niti Aayog indicated its openness to a separate legislative act for medical devices and agreed to revisit the matter with NATHEALTH in about eight weeks for further discussions.
“We seek government support to address these hurdles, which will help the sector grow faster and improve patient access,” Shah said, hoping for prompt and meaningful reforms.
Disclaimer: This article is based on information reported by Economic Times Health and statements provided by NATHEALTH. For more details, refer to the original report.
