Healthcare Industry of India

The Indian healthcare industry is a US$ 35 billion industry and is anticipated to reach US$
75 billion by 2012. This sector thus provides a lot of potential as Indians are becoming more
health conscious and vying for better amenities. To address the increasing demands of this
sector, India needs about US$ 50 billion annually.

The healthcare system is practically non-existent in rural India. With a rise in India's
economy and rural infrastructure, the healthcare industry is stated to grow exponentially in
this area. Thus, there is a need for investment in infrastructure, equipment, and
technological areas.

The public healthcare system is overburdened and also lacks technological support. The
entry of private equity has enhanced the healthcare industry of India further. In addition,
healthcare majors have released IPOs (initial public offerings) trying to tap the potential of
this field further.

With growing consciousness about the health hazards and illnesses that can befall them,
Indians are recognizing the benefits of health insurance. Thus, this sector shows lots of
promise. The health insurance industry is going to reach US$ 5.75 billion by 2010 according
to a study by the Chamber of Commerce, PhD department.

Also, with the stress- and lifestyle-related illnesses on the rise, this sector is gaining more
popularity. International giants, such as AIG, have partnered with the Tata group. Other
such collaborations are Bajaj Allianz and Aviva. More people are going for insurance to help
secure their healthcare needs. Thus, this industry is a major investment area.

The pharmaceutical industry is also gaining in prominence. With skilled labor available and
low research costs this is a nice investment option. The production costs and technologically
sound infrastructure make it a viable option.

Indian healthcare systems like ayurveda and homeopathy are increasingly gaining
prominence overseas. More patrons abroad are going for these alternate therapies as they
are completely natural and have no side effects. As they are derived from plant extracts and
have been in existence for a long time, more people are recognizing the potential of this
field. Thus, this offers good scope.

Another area for investment in India is the research industry. With a huge talent pool and
the rise of biotechnology and bioinformatics in India, this offers tremendous growth
prospects.

Yet another area is the export of medical equipment to India. There is a demand for more
technologically sound instruments in India. With the rise of high-end hospitals, this offers
immense prospects. And with patients vying for quality healthcare facilities and hospitals
this is an expanding field.
India is also a rising destination for medical tourism. With affordable medical expenses and
a sound technology in place, this is a growing sector. This bodes well for the healthcare
industry in India.

There are no inhibiting factors for foreign investment in this industry unlike other industries.
The absence of regulatory laws is an encouragement. The government recognizing the need
for technological advances in this sector has granted many relaxations.

Thus, overall the healthcare industry is going to grow exponentially and offers good
investment potential for foreign investors in India.

Healthcare

Last Updated: July 2010

Sector structure/Market size

The healthcare industry in the country, which comprises hospital and allied sectors, is projected to grow 23 per cent per annum to touch US$ 77
billion by 2012 from the current estimated size of US$ 35 billion, according to a Yes Bank and an industry body report published in November
2009. The sector has registered a growth of 9.3 per cent between 2000-2009, comparable to the sectoral growth rate of other emerging economies
such as China, Brazil and Mexico. According to the report, the growth in the sector would be driven by healthcare facilities, both private and
public sectors, medical diagnostic and pathlabs and the medical insurance sector. According to the report, diagnostics would contribute US$ 2.5
billion to the healthcare industry by 2012.

An increasing number of public and private healthcare facilities are expected to propel demand for the industry, accounting for another US$ 6.7
billion in this period.

As per a study by an industry body and Ernst & Young, India would require another 1.75 million beds by the end of 2025. The public sector
however is likely to contribute only around 15-20 per cent of the required US$ 86 billion investment. The corporate India is therefore, leveraging
on this business potential and various health care brands have started aggressive expansion in the country. Some of the companies that plan to
increase their footprints include Anil Ambani’s Reliance Health, the Hindujas, Sahara Group, Emami, Apollo Tyres and the Panacea Group.

Sahara Group is planning several healthcare projects such as a 200-bed multi-specialty tertiary care hospital at Gorakhpur in Uttar Pradesh, a
1,500-bed multi super-specialty, tertiary care hospital at Aamby Valley City and 30-bed multi-speciality secondary care hospitals across all the
217 Sahara City Homes Townships.

Meanwhile, Artemis Health Sciences (AHS), a health care venture of the Apollo Tyres Group, is also planning to establish four to eight multi-
specialty hospitals in Punjab, Uttar Pradesh, Madhya Pradesh, Rajasthan and Haryana over the next three years.

The rural healthcare sector is also on an upsurge. The Rural Health Survey Report 2009, released by the Ministry of Health, stated that during the
last five years rural health sector has been added with around 15,000 health sub-centres and 28,000 nurses and midwives. The report further
stated that the number of primary health centres have increased by 84 per cent, taking the number to 20,107.

The demand for healthcare services in India has grown from $ 4.8 billion in
1991 to $ 22.8 billion in 2001-02, indicating a compounded annual growth rate
of 16 per cent. The healthcare industry accounted for 5.2 per cent of India’s
GDP in 2002, and this figure could reach $ 47 billion or 6.2—7.5 per cent of
GDP by 2012. On the one hand, the Indian middle class, with its increasing
purchasing power, is more willing than ever before to pay more for quality
healthcare. On the other, the supply of healthcare services has grown steadily,
as the private sector becomes more involved in owning and running hospitals.

This report describes the growth trends in healthcare services. The report analyses the increasing share of privately
owned healthcare facilities. Profile of major players and impact of major regulatory changes are also highlighted in
this report. 
The United States of America has one of the largest medical and healthcare industries in the world, followed by Switzerland and
Germany. The USA's medical industry comprises of more than 750,000 physicians and 5,200 hospitals. USA witnesses
approximately 3.8 million inpatient visits and 20 million outpatients visit on a daily basis. Furthermore, the United States of America
has the largest workforce i.e. one in every 11 US residents employed in the health care business.