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Indian Healthcare Industry Analysis

January, 2020

Indian healthcare sector is expected to reach Rs 19.57 lakh crore (US$ 280 billion) by 2020. Rising income level, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance would be the key contributors to growth. Health insurance is gaining momentum in India. Gross direct premium income underwritten by health insurance grew 17.16 per cent y-o-y to Rs 51,637.84 crore (US$ 7.39 billion) in FY20.

As of April 2020, number of sub centres reached 169,031 and number of primary health centres (PHCs) increased to 33,987.

The hospital industry in India is estimated to touch US$ 372 billion by 2022 from US$ 160 billion in 2017.

Private sector has emerged as a vibrant force in India's healthcare industry, lending it national and international repute. It accounts for almost 74 per cent of the country’s total healthcare expenditure. Telemedicine is a fast-emerging trend in India. Major hospitals (Apollo, AIIMS, and Narayana Hrudayalaya) have adopted telemedicine services and have entered several public-private partnerships (PPP). Further, presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical tourism.

Indian medical tourism market is growing at the rate of 18 per cent y-o-y and is expected to reach US$ 9 billion by 2020. The value of merger and acquisition (M&A) deals in hospital sector jumped to a record 155 percent at Rs 7,615 crore (US$ 1.09 billion) in FY19.

The Government of India has approved the continuation of National Health Mission with a budget of Rs 34,115 crore (US$ 4.88 billion) under Union Budget 2020-21. National Nutrition Mission is aimed to reduce the level of stunting by 2 per cent, under-nutrition by 2 per cent, anaemia by 3 per cent and low birth babies by 2 per cent ever year. The Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY), the largest Government funded healthcare program targeting more than 500 million beneficiaries, has been allocated Rs 6,429 core (US$ 919.87 million) under Union Budget 2020-21. As of November 2019, nearly 63.7 lakh people received free treatment under PMJAY.

Under Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), allocation of Rs 3,000 crore (US$ 429.25 million) has been made under Union Budget 2020-21. Intensified Mission Indradhanush (IMI) 2.0 was launched by the Ministry of Health and Family Welfare from December 2019 to March 2020.

Under Union Budget 2020-21, Rs 65,012 crore (US$ 9.30 billion) and Rs 2,100 crore (US$ 300.47 million) has been allocated to the Ministry of Health and Family Welfare and the Department of Health Research, respectively.

The Government’s expenditure on the health sector has grown to 1.6 per cent of the GDP (Gross Domestic Product) in FY20 from 1.3 per cent in FY16. The Government is planning to increase its public health spending to 2.5 per cent of the country's GDP by 2025. Healthcare’s share of GDP is expected to rise by 19.7 per cent by 2027.

During April 2000–March 2020, Foreign Direct Investment (FDI) inflow in drugs and pharmaceuticals sector stood at US$ 16.50 billion.

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