Healthcare Industry in India – Business Opportunities & Advantages

The Indian healthcare industry is undergoing impressive growth, encompassing sectors like hospitals, telemedicine, medical tourism, and more. Factors like increased healthcare coverage, government initiatives, and rising investments are driving this expansion. The hospital sector is expected to reach USD 132 billion by 2023. Telemedicine is emerging rapidly, projected to be a USD 5.4 billion market by 2025. Government schemes like Ayushman Bharat and investments in medical education are pivotal. India's healthcare sector contributes significantly to the economy and employment, attracting medical tourists and fostering research and development. Overall, it promises a bright future for India's healthcare landscape.

Market Scenario

The Indian healthcare industry is undergoing remarkable growth, with a diverse range of sectors contributing to its expansion. Valued at USD 11 billion and exhibiting a strong CAGR of 15%, the MedTech industry alone is projected to reach USD 50 billion by 2030. Hospitals are a standout contributor, making up 80% of the healthcare market, with expectations of reaching USD 132 billion by 2023. India's medical tourism market is set to expand to USD 13 billion by 2026, and the diagnostics industry is seeing increased participation from organized players. The Ayushman Bharat program has significantly improved primary healthcare access, generating over 390 million Digital Mission numbers. India's healthcare infrastructure is estimated to reach USD 349.1 billion by FY22, supported by a growing number of medical colleges and doctors. Initiatives like Abbott's conversion of PHCs into HWCs highlight the sector's commitment to serving under-resourced communities, emphasizing its vital role in the nation's well-being and economy.

Growth Drivers

The healthcare landscape in India is evolving rapidly, with significant trends and factors driving its transformation. Robotic Process Automation (RPA) is enhancing operational efficiency, while growing demand for healthcare services is propelled by rising incomes, an aging population, and increased medical tourism. Shifting disease patterns, with a focus on Non-Communicable Diseases (NCDs), necessitate a shift toward preventive care. Policy support and incentives, including 100% FDI and the Atmanirbhar Bharat Abhiyaan, are encouraging investment in the sector. The rise of telemedicine, expanding insurance coverage, substantial investments in medical infrastructure, and a surge in M&A activities contribute to the sector's dynamic growth and evolution.

Industry Trends

• Telemedicine Growth: Telemedicine, including teleconsultation and e-pharmacy, is booming in India, with a projected market of USD 5.5 billion by 2025. Government initiatives like e-Sanjeevani have witnessed remarkable growth.
• AI Revolution: Artificial Intelligence (AI) is transforming healthcare, enhancing patient care and communication. AI start-ups are addressing healthcare challenges, exemplified by Tata Trust's India Health Fund.
• Mobile and Wearables: The Indian market for mobile and wearable health devices is surging, with an estimated 129 million units by 2030.
• Robotic Surgery: India's surgical robotics market is growing at a 20% CAGR, set to reach USD 350 million by 2025, offering precision and improved outcomes.
• Lifestyle Disease Focus: Lifestyle diseases now account for 50% of in-patient spending, driven by factors like high cholesterol and obesity.
• Digital Vaccine Platform: India's CoWIN platform for vaccine delivery is recognized globally, with nearly 76 countries considering its adoption.
• Health Insurance Surge: Health insurance is on the rise, with significant government support, offering protection to healthcare workers during the COVID-19 response.
• Technological Advancements: Digital health resources, EMRs, telemedicine, and innovative initiatives like 'Health ATMs' and digital clinics are gaining traction.
• Universal Immunization: India's Universal Immunization Programme (UIP) is expanding with the involvement of healthcare workers as vaccinators.
• Point-of-Care Testing: Point-of-care medical tests are becoming increasingly accessible, speeding up diagnosis and treatment while reducing hospital congestion.

Why Invest in India?

India's healthcare sector is experiencing robust government support, with substantial budget allocations and regulatory measures in place to strengthen the industry. The nation's growing demand for healthcare services is driven by rising incomes, health awareness, and lifestyle-related diseases. Notably, the sector's expansion has made it a major employer, with 4.7 million workers as of 2021. India offers promising opportunities, with increased public healthcare expenditure and a significant role in global health, highlighted by its COVID-19 vaccine contributions. Furthermore, a burgeoning medical workforce, now numbering 1.3 million, demonstrates India's readiness to meet its healthcare demands.

Industry Segments

• Hospitals
• Pharmaceuticals
• Medical Equipment and Supplies
• Telemedicine
• Medical Insurance

Rapid Escalation of Healthcare Spending

India's healthcare sector has become a major economic contributor, experiencing rapid growth with a projected CAGR of 22.52% from 2016 to 2022. The industry is set to reach a substantial USD 372 billion by 2022, driven by expanding healthcare coverage, improved quality, and increased investments. Additionally, the e-health market is on the rise, expected to reach USD 10.6 billion by 2025, showcasing the adoption of digital health solutions. Collaborative efforts with organizations like the World Bank underscore India's commitment to enhancing healthcare infrastructure and preparedness, positioning the sector for continued growth and resilience.

Strategies to bring Boost in the Industry

The healthcare and pharmaceutical sector in India is marked by robust M&A activity, amounting to USD 4.32 billion in the first half of 2022, showcasing its attractiveness to investors. Players in the industry are adopting differentiated and diversified business approaches, offering comprehensive healthcare services under one roof. Cost leadership strategies, exemplified by institutions like Narayana Hrudayalaya, emphasize affordable healthcare. Collaboration with start-ups for innovative solutions is also a growing trend, fostering co-development and innovation in the sector.

Medical Tourism in India

India's healthcare industry has firmly established itself as a preferred destination for medical tourism due to several compelling factors. The country offers world-class healthcare services with significantly lower treatment costs, attracting patients from developed countries. India's diverse healthcare offerings, government support, and policies, including 100% FDI in the wellness and medical tourism sector, have contributed to its growth. The establishment of the 'National Medical & Wellness Tourism Board' and the extension of e-medical visas to citizens of 156 countries further enhance India's position. Despite temporary setbacks due to the COVID-19 pandemic, India remains a cost-effective and attractive choice for international patients seeking high-quality healthcare.

Re-emergence of Traditional Medical Care

The Indian traditional healthcare industry, primarily Ayurveda and Unani medicines, is on a path of substantial growth, with a projected market size of around USD 9 billion by 2022. This sector has diversified its services to encompass holistic practices like yoga, herbal medicine, and spa services, reflecting the increasing acceptance of traditional remedies. Recent developments, government support, and infrastructure investments further underscore India's commitment to advancing healthcare accessibility and preparedness. Key players are strategically establishing wellness centres, and notable trends include the creation of a digital library for traditional medical knowledge and growing private equity interest in the sector, highlighting its evolving significance in India's healthcare landscape.

Government Support and Policies

• Pradhan Mantri Jan Arogya Yojana (PMJAY)
• National Nutrition Mission (NNM)
• National Health Mission
• Incentives for Medical Tourism
• Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)
• Vision 2035
• PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM)
• Ayushman Bharat Scheme
• National Digital Health Mission (NDHM)

Regulatory Framework

The regulatory framework governing the healthcare industry in India is multifaceted and comprehensive, encompassing various laws, agencies, and regulations that oversee different aspects of healthcare, pharmaceuticals, medical devices, clinical research, and more.

• Ministry of Health and Family Welfare (MoHFW)
• Central Drugs Standard Control Organization (CDSCO)
• Medical Council of India (MCI)
• Pharmacy Council of India (PCI)
• National Pharmaceutical Pricing Authority (NPPA)
• Drug Controller General of India (DCGI)
• National Medical Commission (NMC)
• National Accreditation Board for Hospitals & Healthcare Providers (NABH)
• Clinical Establishments Act

Licenses and Permits

Operating a business in India, including in the healthcare sector, typically requires various licenses and permits to ensure compliance with legal and regulatory requirements. The specific licenses and permits needed may vary based on the nature of the healthcare business, its location, and the services provided. Here are some common licenses and permits required for healthcare-related businesses in India:

• Drug License
• Medical Practitioner License
• Clinical Establishment Registration
• Radiation Control License
• Biomedical Waste Authorization
• Pharmacy License
• Healthcare Waste Management Authorization
• Telemedicine Registration
• Clinical Trials Permission

Foreign Direct Investment

Foreign Direct Investment (FDI) has played a pivotal role in India's healthcare sector, facilitated by favorable policies and rising demand. The industry witnessed substantial FDI inflows of around USD 19.90 billion between April 2000 and June 2022. In the fiscal year 2022-23, up to December 2022, India attracted FDI inflow of USD 36,746 million, showcasing sustained investor interest. Notable investments, such as Aster DM Healthcare's INR 900 crore plan to expand in India, emphasize the sector's continued growth and investment potential, with hospitals, diagnostic centres, and medical appliances being key beneficiaries of FDI.

Accreditation Schemes

In India, accreditation schemes play a crucial role in ensuring the quality and standards of healthcare services. These schemes are designed to evaluate and certify healthcare facilities, including hospitals and clinics, based on various parameters. Some of the prominent accreditation schemes in the Indian healthcare industry include:

• National Accreditation Board for Testing and Calibration Laboratories (NABL)
• Quality Council of India (QCI)
• Entry-Level Certification for Primary Health Centres (ECPHC)
• Ayurveda Certification
• ISO Certification

Growing Opportunities

India's healthcare infrastructure faces substantial challenges and opportunities, requiring significant investments to bridge resource gaps. Initiatives like the National Health Mission and national disease control programs aim to enhance accessibility to quality healthcare. To meet growing demands, India plans to allocate over USD 500 billion for medical infrastructure development by 2030, including the goal of three beds per 1,000 people and more healthcare professionals. Simultaneously, the health-tech sector is booming, attracting substantial venture capital investments, positioning India as a global player. The medical devices market is thriving, projected to reach USD 11 billion in 2022, driven by factors like an aging population and medical tourism. Research initiatives, such as the Longitudinal Ageing Study of India (LASI), are aiding the development of tailored healthcare services for the elderly, emphasizing India's commitment to healthcare enhancement.

Key Industry Players

• Apollo Hospitals Enterprise Limited
• Fortis Healthcare Limited
• Thyrocare Technologies Limited
• Dr. Lal PathLabs Limited
• Piramal Enterprises Limited

Conclusion

In summary, India's healthcare industry is at a pivotal stage, poised for substantial growth and transformation. Increased demand, heightened health awareness, and the aftermath of the COVID-19 pandemic have driven the sector forward. Public and private sectors play crucial roles, with initiatives like Ayushman Bharat improving accessibility and private innovation driving progress. The pharmaceutical and health-tech sectors have flourished, attracting investments and bolstering India's global standing. Challenges such as infrastructure gaps and workforce shortages persist, but government commitments and private sector dynamism inspire confidence in overcoming these hurdles. India's healthcare sector is on a path towards universal health coverage, improved care quality, and substantial contributions to the nation's economy. With innovation, partnerships, and policy support, India aims to become a global healthcare leader, enhancing the well-being of its population.


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