Healthcare Industry in India

Brief Overview The Indian healthcare industry, which comprises hospitals, medical infrastructure, medical devices, clinical trials, outsourcing, telemedicine, health insurance and medical equipment, is expected to reach US$ 16 !illion !y " 1#$ %n the !ac& of continuously rising demand, the hospital services industry is expected to !e worth US$ '1$" !illion !y " 1($ The Indian hospital services sector generated revenue of over US$ )( !illion in " 1"$ This revenue is expected to increase at a compound annual growth rate *+,-./ of " per cent during " 1"0" 1#, according to a .1+%S report titled, 2Indian 3edical 4evice 3ar&et %utloo& to " 1#5$ Market Size The healthcare industry in India is experiencing gradual transition from paper files to electronic mediums$ The Indian healthcare assisted !y IT mar&et has !een growing tremendously over the past few years$ It is expected to grow at a +,-. of around ""$# per cent during the period " 160 " 1($ The hospital and diagnostics centre in India received foreign direct investment *74I/ worth US$ 1,81)$"' million, while drugs 9 pharmaceutical and medical 9 surgical appliances industry registered 74I worth US$ 11,61'$6" million and US$ 6(6$)( million, respectively during ,pril " to :une " 16, according to data provided !y 4epartment of Industrial ;olicy and ;romotion *4I;;/$ 3oreso, the other related segments li&e genetic testing mar&et is expected to grow at a +,-. of around 8 per cent during " 1"0" 1# and that of the diagnostic services mar&et in India at a +,-. of around "6 per cent during " 1"0" 1($ ,ll the growth is !ased on the foundation on huge investments, fast expansion into tier II 9 III cities, and strong government support to strengthen the healthcare infrastructure in the country$ Trends and Investments The Indian healthcare providers plan to spend .s (,# crore *US$ '8#$6) million/ on IT products and services in " 16, a seven per cent rise over " 1" revenues of .s (,6 crore *US$ '6)$6( million/, as per a report !y -artner$ The Indian0,merican doctors5 community plans to organise the <-lo!al =ealthcare Summit< in ,hmeda!ad, -u>arat, from :anuary 60(, " 1), to !ring afforda!le world class healthcare for Indians$ -lo!al =ealthcare Summit " 1) aims at advancing the accessi!ility, afforda!ility and quality of world0class healthcare to the Indian people$ The Summit will also focus on prevention, diagnosis, treatment options and share ways to truly improve healthcare transcending glo!al

!oundaries, as per 4r :ayesh Shah, ;resident, ,ssociation of ,merican ;hysicians of Indian %rigin *,,;I/$ Some of the ma>or investments in the sector include?

@A++ has !ought controlling sta&e in Singapore0!ased -lo!al @antage Innovative -roup *-@ig/$ <Be have acquired ' per cent sta&e in -@ig$ The acquisition will give us a foothold in dermatological solutions,< said 3r 3u&esh Authra, +hairman, @A++ -roup ,pollo =ospitals has 1,( !ed capacity in the Cast and 1orth Cast region and plans to add another 1,( !eds$ The firm plans to open four new hospitals D one each in Eol&ata, ;atna, .aipur and -uwahati$ The hospital also achieved a milestone !y implanting # cochlear devices$ , cochlear implant is a small, complex electronic device that can help to give a sense of sound to a person who is severely hard0of0hearing ;iramal5s healthcare vertical plans to invest US$ "$( million at its 74,0approved -rangemouth *UE/ site to upgrade their anti!ody drug con>ugate *,4+/ manufacturing suites +orona .emedies ;vt Atd has announced a tie up with SpainFs 3edical 4iagnostics ,ragon *34,/ for the pan0India launch of F.ehidrata0T,F an oral rehydration salt *%.S/ formulation in form of a gel$ The %.S mar&et siGe in India is a!out .s ", crore *US$ 61)$86 million/ per annum with a +,-. of 1 per cent ,SE ;ravi, a >oint venture *:@/ !etween ,SE -roup and ;ravi +apital, has acquired a minority sta&e in =ydera!ad0!ased %31I =ospitals for .s 6 crore *US$ 8$)( million/ Hydus +adila plans to set up an in>ecti!le facility at @adodara, -u>arat, at an investment of .s 1 crore *US$ 1($#( million/ !y " 1($ The company also plans to expand its hospital !usiness across -u>arat in the next three years 4r 4evi Shetty and .udra!hishe& Infrastructure Trust have entered into a :@ to set up a 6 !ed multi speciality hospital worth .s 1 crore *US$ 1($#( million/ in Auc&now, Uttar ;radesh *U;/ +4+ -roup and ,!raa> -roup have >ointly invested .s 1 #$6 crore *US$ 16$8 million/ in =ydera!ad0!ased .ain!ow =ospitals

Medical Tourism Several &ey trends are giving impetus to the growth of India5s healthcare sector$ %f these, medical city is relatively a new concept that offers immense growth opportunities, in addition to the medical tourism$ India is also regarded as the most competitive destination with advantages of lower cost and sophisticated treatments$ 4ue to such promising factors, the medical tourism has great potential in the country$ The industry in India is pegged at US$ 1 !illion per annum, growing at around 1' per cent and is expected to touch US$ " !illion !y " 1($ India has witnessed an influx of patients from ,frica,

+IS countries, -ulf and S,,.+ nations, ;a&istan, Iangladesh and 3yanmar, who mainly come for organ transplant, orthopedic, cardiac and oncology pro!lems$ ,pollo =ospitals has six tele0medicine *through video0conferencing system/ centres in the Cast and 1orth Cast India$ ;lans are afoot to add another ") over the next couple of years$ Government Initiatives The -overnment of India has decided to increase health expenditure to "$( per cent of gross domestic product *-4;/ !y the end of the Twelfth 7ive Jear ;lan *" 1"01#/$ 4r 3anmohan Singh, the ;rime 3inister of India, also emphasised the need for increased outlay to health sector during the Twelfth 7ive Jear ;lan$ 3oreover, 1 per cent 74I is permitted for health and medical services under the automatic route$ In a recent initiative, 6)' essential medicines will now come under price control in India$ These currently contri!ute .s 16, 66 crore *US$ "$ ( !illion/ to the total annual sales of .s #",#6" crore *US$ 11$)6 !illion/, according to mar&et research firm I3S =ealth5s analysis$ Some highlights of the Union Iudget " 1601) presented !y 3r ; +hidam!aram, 3inister of 7inance, -overnment of India, for the healthcare are as follows?

=ealth for all remains one of the priority sectors for the -overnment The 3inistry of =ealth 9 7amily Belfare has !een allocated .s 6#,66 crore *US$ ($'# !illion/$ %f this, the new 1ational =ealth 3ission that com!ines the rural mission and the proposed ur!an mission will get .s "1,"68 crore *US$ 6$6( !illion/, an increase of ")$6 per cent over the .evised Cstimates *.C/ .s ),#"# crore *US$ #))$)1 million/ for medical education, training and research

In addition, contri!utions made to schemes of +entral and State -overnments similar to +entral -overnment =ealth Scheme, eligi!le for section ' 4 of the Income Tax ,ct$ Road Ahead The countryFs healthcare system is developing rapidly and it continues to expand its coverage, services and spending in !oth the pu!lic as well as private sectors$ This is creating a large mar&et for hospital information systems and other healthcare0related IT solutions$ The favoura!le demographic virtues offer an attractive mar&et for healthcare providers and investors in India$ ,n increase in foreign investment inflows and private equity *;C/ deals in the industry5s various segments have also !een noted, in addition to the increased focus received from the -overnment$ Cxchange .ate? I1. 1 K US$ $ 1(#) as on Septem!er 1", " 16

References: Department of Industrial Policy and Promotion (DIPP), Union Budget 2012-13, !"#$ eports, %edia eports, Press Information Bureau (PIB)