Healthcare revenue in India is set to reach US$ 280 billion by 2020; expenditure is likely to grow at a compound annual growth rate (CAGR) of 12 per cent over 2012-15. Rising incomes, greater health awareness, lifestyle diseases, and increasing insurance penetration will contribute to growth.
Of the total healthcare revenues in the country, hospitals account for 71 per cent, pharmaceuticals for 13 per cent, and medical equipment and supplies for 9 per cent. The private sector has emerged as a vibrant force in India's healthcare industry and contributed about 68 per cent of total healthcare spending in 2011.
The Government of India has permitted 100 per cent foreign direct investment (FDI) for all health related services under the automatic route. Custom duty on life-saving equipment has been reduced to 5 per cent from 25 per cent and exempted from countervailing duty. Further, the Planning Commission has allotted US$ 83 billion under the 12th Five Year Plan for healthcare spending; this is about US$ 60 billion more compared to the 11th Plan.