India’s healthcare sector expected to touch $372 billion mark next year

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Health Minister Harsh Vardhan takes the second dose of the coronavirus vaccine in Delhi on Tuesday. Healthcare has become one of the largest sectors of the Indian economy, in terms of both revenue and employment (IANS)

India’s healthcare industry has been growing at a compound annual growth rate of around 22% since 2016 and is expected to reach USD 372 billion in 2022, according to a Niti Aayog report released on Tuesday.

Healthcare has become one of the largest sectors of the Indian economy, in terms of both revenue and employment, the report states. 

The report outlines the range of investment opportunities in various segments of India’s healthcare sector, including hospitals, medical devices and equipment, health insurance, telemedicine, home healthcare and medical value travel.

“Several factors are driving the growth of the Indian healthcare sector, including an aging population, a growing middle class, the rising proportion of lifestyle diseases, an increased emphasis on public-private partnerships as well as accelerated adoption of digital technologies. The Covid-19 pandemic has not only presented challenges but also several opportunities for India to grow. All these factors, together make India’s healthcare industry ripe for investment,” wrote NITI Aayog CEO Amitabh Kant in the foreword.

In the first section, this report provides an overview of India’s healthcare sector, including insights about its employment generation potential, the prevailing business and investment climate as well as the overarching policy landscape. The second section highlights the key drivers of growth for the sector and the third elaborates upon the enabling policies and investment opportunities in seven key segments—hospitals and infrastructure, health insurance, pharmaceuticals and biotechnology, medical devices, medical tourism, home healthcare as well as telemedicine and other technology-related health services.

In the hospital segment, the expansion of private players to tier-2 and tier-3 locations, beyond metropolitan cities, offers an attractive investment opportunity. With respect to pharmaceuticals, India can boost domestic manufacturing, supported by recent Government schemes with performance-linked incentives, as part of the Aatmanirbhar Bharat initiative, the report states.

In the medical devices and equipment segment, expansion of diagnostic and pathology centres as well as miniaturized diagnostics have high potential for growth. Further, medical value travel, especially wellness tourism, has bright prospects, given India’s inherent strengths in alternative systems of medicine. Technology advancements such as Artificial Intelligence (AI), wearables and other mobile technologies, along with Internet of Things, also offer numerous avenues for investment, the report adds.