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Healthcare: Jan 2012

January, 2012

The Government of India aims to develop India as a global healthcare hub. India offers a huge patient pool, favourable regulatory environment and a cost advantage to conduct clinical trials. Healthcare expenditure in India is expected to increase by 12 per cent per annum during 2011-15. Rising incomes, greater health awareness, lifestyle diseases, and increasing insurance penetration will contribute to increase this growth.

Healthcare markets five major segments are – Hospitals (generate 71 per cent revenue), Pharmaceutical (generate 13 per cent revenue), Diagnostics (generate 9 per cent revenue), Medical Equipment and Supplies (generate 4 per cent revenue) and Medical Insurance (generate 3 per cent revenue).

Telemedicine is fast-emerging in India, supported by the inforamtion and communication technology (ICT) sector. The private sector accounts for 68 per cent of overall healthcare spending. The size of the healthcare industry is expected to touch US$ 79 billion by 2012 and US$ 280 billion by 2020. By 2012, healthcare spending is estimated to contribute 8 per cent of GDP and would employ around 9 million people.

100 per cent foreign direct investment (FDI) is being permitted for all health related services under the automatic route. Contract research is a fast growing segment in the Indian health care industry. In 2010, the mergers and acquisitions (M&As) deal value in healthcare stood at US$ 6.2 billion, accounting for 12 per cent of total M&A deal value.

The Indian medical tourism industry is poised to grow at 30 per cent annually into a US$ 2 billion business by 2012. There has been a wide array of policy support in the form of reduction in exercise duties and higher budget allocation for the healthcare sector to develop India as a global healthcare club.

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