Sector Overview

Indian Healthcare Sector is one of the largest and fastest growing sectors in terms of revenue and employment. It comprises of Hospitals, clinical trials, outsourcing, medical devices, telemedicine, medical tourism, health insurance and medical equipment. Highly talented human resource with technological advancement enables India to provide cross border services, such as telemedicine, telesurgery and telediagnosis. Moreover, India has also emerged as a strong outsource destination for service such as medical transcription, coding and billing, back office support etc.

India holds strong position in advanced healthcare services such as organ transplants, cardiovascular procedures, cancer treatments, etc. with high success rate. High growth of Healthcare sector is the result of government initiatives, high Private and foreign investments which has promoted the Infrastructure for Healthcare Services in the country. Indian Hospital Industry stood at US$ 61.79 billion during the FY2017 and is expected to reach US$ 132.84 billion by 2022. Globally, Health care spending is projected to increase at an annual rate of 4.1% in 2017-2021, up from just 1.3% in 2012-2016. India is expected to rank amongst the top three healthcare markets worldwide in terms of incremental growth by 2020.

Wellness services in India

Wellness Industry has continued to emerge from a niche lifestyle concept into a mainstream commodity with high growth prospects. Wellness industry is estimated to be worth over $3.72 trillion, representing more than 5% of all global economic output (Global Wellness Industry Report 2018).

Wellness Industry

As per the recent estimates of Ernst & Young, Indian wellness industry is estimated to grow at a CAGR of nearly 12% for the next 5 years and is expected to reach Rs 1.5 trillion by 2020. Rise in disposable incomes, changing lifestyle, etc. are some important factors driving the growth of wellness services.

 

Indian healthcare sector stood as the fourth largest employer, employing approx. 319,780 people in FY2017. The sector is expected to generate 40 million jobs in India by 2020. Indian healthcare sector, is expected to record a threefold rise to US$ 372 billion in 2022 from US$ 110 billion in 2016. As per the Economic Survey 2017-18, net sales of healthcare services have been growing at an average of 12.1%.

Groth Net Sale
Source: Economic Survey 2017-18
 
Medical Tourism industry is

Medical Tourism – Medical Tourism industry is experiencing strong growth of 22-25% with market size of US$ 3 billion during FY17. Industry is expected to double its size to US$ 6 billion by the end of 2018. Medical tourist arrivals in India has increased to 1.07 million in January 2018 from 0.98 million in January 2017.

 
Emergence of Telemedicine

Emergence of Telemedicine – Telemedicine is one of the emerging sector in India which can bridge the rural-urban divide in terms of medical facilities. Through Telemedicine, low-cost consultation and diagnosis facilities can be provided to the remotest of areas via high-speed internet and telecommunication. Major big hospitals like AIIMS and Apollo have adopted telemedicine services and entered into a number of PPPs. Telemedicine market in India is expected to rise at a CAGR of 20% during FY16-20, reaching to US$32 million by 2020.

 
Rise in Per Capita Healthcare

Rise in Per Capita Healthcare expenditure – Government expenditure on healthcare sector as percentage of GDP has grown to 1.5% in FY17 from 1.2 per cent in FY14. Factors such as rising incomes, easier access to high-quality healthcare facilities, greater awareness of personal health and hygiene, Economic prosperity, etc. have positively contributed in increasing expenditure on healthcare services.

 
Re-emergence of traditional

Re-emergence of traditional medical care- The traditional (Ayurveda) market in India is expected to rise at a CAGR of 16 per cent over 2016-2021. The growth is further likely to be accelerated by augmentation of Ayurveda and other Traditional Systems of medicine in public health including National AYUSH Mission, National Health Mission and Prevention and Control of non-communicable diseases etc. Services offers traditional Indian health remedies based on natural and herbal ingredients along with new offerings like services on diet and nutrition, yoga, herbal medicine, humour therapy and spa. Considering overall growth of wellness therapies like Yoga etc. Morarji Desai National Institute of Yoga (MDNIY) and autonomous organization under Ministry of AYUSH has embarked upon accreditation programme for Yoga practitioners and institutions so that quality Yoga personals are available to the society. The diagnostic and Theraputic services based on Ayurveda, Yoga and other traditional systems of medicine which mainly include the medicines, Panchkarma therapies and marma therapies etc. which are mainly based on natural and herbal ingredients with holistic approach. The tertiary care in AYUSH System specially in Ayurveda has emerged strongly in the form of establishment of All India Institute of Ayurveda and Integration of AYUSH in healthcare facilities under other ministries including Ministry of Labour, Home etc. There is growing interest from numerous private equity firms in the traditional healthcare sector in India.

 
Pharma market turnover trending

Pharma market turnover trending north – Indian pharmaceutical market grew 5.5 % in CY2017 with total turnover reached US$ 14.97 billion of scheduled formulations and US$ 3.08 billion of non-scheduled formulations, respectively. As per available data from authentic resources there has been 13 % of growth in the export of Ayurveda and herbal drugs in last 4 years.

 
Growth in Medical devices

Growth in Medical devices market – The medical devices market size, valued at US$ 4.9 billion in 2017, is expected to reach US$ 11 billion by 2022, backed by rising geriatric population, growth in medical tourism and declining cost of medical services.

 
 Technological enhancement

Home healthcare – Technological enhancement and development of medical electronics has made it possible provide high quality medical care at home at affordable prices. It can help patients to save up to 10-25% cost of the medical treatment Indian home healthcare market is estimated to reach US$ 4.46 billion by the end of 2018 and US$ 6.21 billion by 2020.

 
Globally, Healthcare Insurance

Rising penetration of Healthcare Insurance – Globally, Healthcare Insurance industry is growing at a fast pace. Healthcare Insurance is also gaining momentum in India. During FY18, gross direct premium income from health insurance stood at 25.2% of overall gross direct premium income for non-life insurance segment which is a significant number indeed. Health care insurance coverage have also been extended to Ayurveda and other traditional systems of the medicine.

References – Data and reports available in the public domain including Ministries Annual Reports and Data Statistics, IBEF Sectoral Reports, Department of Industrial Policy and Promotion (DIPP), RBI Handbook of Statistics on Indian Economy, Media & Industry Reports, Press Information Bureau (PIB), Union Budget 2018-19

Disclaimer – This information has been collected through secondary research and is available in the public domain. We are not responsible for any errors in the same.