The Indian healthcare industry, which comprises hospitals, medical infrastructure, medical devices, clinical trials, outsourcing, telemedicine, health insurance and medical equipment, is expected to reach US$ 160 billion by 2017.
On the back of continuously rising demand, the hospital services industry is expected to be worth US$ 81.2 billion by 2015. The Indian hospital services sector generated revenue of over US$ 45 billion in 2012. This revenue is expected to increase at a compound annual growth rate (CAGR) of 20 per cent during 2012-2017, according to a RNCOS report titled, ‘Indian Medical Device Market Outlook to 2017’.
The healthcare industry in India is experiencing gradual transition from paper files to electronic mediums. The Indian healthcare assisted by IT market has been growing tremendously over the past few years. It is expected to grow at a CAGR of around 22.7 per cent during the period 2013-2015.
The hospital and diagnostics centre in India received foreign direct investment (FDI) worth US$ 1,914.28 million, while drugs & pharmaceutical and medical & surgical appliances industry registered FDI worth US$ 11,318.32 million and US$ 653.45 million, respectively during April 2000 to June 2013, according to data provided by Department of Industrial Policy and Promotion (DIPP).
Moreso, the other related segments like genetic testing market is expected to grow at a CAGR of around 9 per cent during 2012-2017 and that of the diagnostic services market in India at a CAGR of around 26 per cent during 2012-2015. All the growth is based on the foundation on huge investments, fast expansion into tier II & III cities, and strong government support to strengthen the healthcare infrastructure in the country.
The Indian healthcare providers plan to spend Rs 5,700 crore (US$ 897.64 million) on IT products and services in 2013, a seven per cent rise over 2012 revenues of Rs 5,300 crore (US$ 834.65 million), as per a report by Gartner.
The Indian-American doctors’ community plans to organise the "Global Healthcare Summit" in Ahmedabad, Gujarat, from January 3-5, 2014, to bring affordable world class healthcare for Indians. Global Healthcare Summit 2014 aims at advancing the accessibility, affordability and quality of world-class healthcare to the Indian people. The Summit will also focus on prevention, diagnosis, treatment options and share ways to truly improve healthcare transcending global boundaries, as per Dr Jayesh Shah, President, Association of American Physicians of Indian Origin (AAPI).
Some of the major investments in the sector include:
Several key trends are giving impetus to the growth of India’s healthcare sector. Of these, medical city is relatively a new concept that offers immense growth opportunities, in addition to the medical tourism. India is also regarded as the most competitive destination with advantages of lower cost and sophisticated treatments. Due to such promising factors, the medical tourism has great potential in the country.
The industry in India is pegged at US$ 1 billion per annum, growing at around 18 per cent and is expected to touch US$ 2 billion by 2015. India has witnessed an influx of patients from Africa, CIS countries, Gulf and SAARC nations, Pakistan, Bangladesh and Myanmar, who mainly come for organ transplant, orthopedic, cardiac and oncology problems.
Apollo Hospitals has six tele-medicine (through video-conferencing system) centres in the East and North East India. Plans are afoot to add another 24 over the next couple of years.
The Government of India has decided to increase health expenditure to 2.5 per cent of gross domestic product (GDP) by the end of the Twelfth Five Year Plan (2012-17). Dr Manmohan Singh, the Prime Minister of India, also emphasised the need for increased outlay to health sector during the Twelfth Five Year Plan. Moreover, 100 per cent FDI is permitted for health and medical services under the automatic route.
In a recent initiative, 348 essential medicines will now come under price control in India. These currently contribute Rs 13,033 crore (US$ 2.05 billion) to the total annual sales of Rs 72,762 crore (US$ 11.46 billion), according to market research firm IMS Health’s analysis.
Some highlights of the Union Budget 2013-14 presented by Mr P Chidambaram, Minister of Finance, Government of India, for the healthcare are as follows:
In addition, contributions made to schemes of Central and State Governments similar to Central Government Health Scheme, eligible for section 80D of the Income Tax Act.
The country's healthcare system is developing rapidly and it continues to expand its coverage, services and spending in both the public as well as private sectors. This is creating a large market for hospital information systems and other healthcare-related IT solutions.
The favourable demographic virtues offer an attractive market for healthcare providers and investors in India. An increase in foreign investment inflows and private equity (PE) deals in the industry’s various segments have also been noted, in addition to the increased focus received from the Government.
Exchange Rate: INR 1 = US$ 0.01574 as on September 12, 2013
References: Department of Industrial Policy and Promotion (DIPP), Union Budget 2012-13, RNCOS Reports, Media Reports, Press Information Bureau (PIB)