India has a
sophisticated healthcare system comprising of government and private service
providers and the industry is undergoing phenomenal expansion. The market is
currently worth more than US$21 billion and is growing at an estimated 17% a
year, reaching a projected US$39 billion by 2006. The boom is being driven
by the private hospitals and the continued investment in the national health
service, which together serve a population of over 1 billion, growing at
The Indian government is investing hugely to achieve
‘Health for All’. Over the past decade, the government has engaged in a
major programme to expand and upgrade national health facilities. In its
Health Policy 2002, it announced a further massive boost in government
spending on healthcare, from 0.9% of GDP to 2% by 2010.
The private health sector accounts for over 70% of the
market and it’s value is growing at 8% per annum. Over two thirds of Indian
hospitals are private and key players such as Manipal, Fortis, the Apollo
Group and Max India are pouring millions of dollars into new facilities.
Wockhardt plans to invest Rs. 5 billion developing new facilities and the
Apollo Group is building five new hospitals in key areas with plans for 250
private clinics nationwide.
India’s middle classes, who number more than 300 million,
are driving demand for private healthcare. People who would once have flown
abroad for treatment are now staying home. The high quality, low cost
facilities are also attracting international patients. Private operations
are up to 90% cheaper than in than in many Western countries. Surgery that
would cost US$1,800 in Japan can cost US$200 in India.
The government is actively supporting growth in the
private health sector. It recently announced plans for a social health
insurance scheme to be funded from the public purse with delivery through
the private sector. The government is also strongly encouraging the
development of paid treatment packages for patients from overseas and is
offering fiscal incentives for the development of this market.
Potential of the Indian
India’s medical equipment and disposables market is worth
about US$2.5 billion. It is second only to the USA in turnover of medical
The Indian pharmaceutical market is estimated at US$5
billion. Foreign pharmaceutical companies are permitted to operate wholly
foreign owned subsidiaries in India for the development and manufacturing of
drugs for the local market and for exports, and indigenous companies are
keen to facilitate alliances with international companies. This market has
consistently registered a compounded annual growth rate of 16% over the past
12 years but a dramatic increase is widely predicted by industry experts and
the market is expected to be worth US$25 billion by 2010. With competitive
economies of scale and enviable geographical positioning, India can offer
unrivalled opportunities to international pharmaceutical companies for
manufacturing, and distribution and even gaining footholds in the lucrative
Asian and African markets.
The biotechnology industry is worth US$2 billion and is
likely to be boosted by increased research funding. The government expects
its health research funding to account for 1% of total health spending by
2005 and 2% by 2010. The Ministry of Health has stated that the focus will
be on "the newly-emerging frontier areas based on genetics, genome-based
drug and vaccine development, molecular biology etc," adding that "Private
entrepreneurship will be encouraged through fiscal incentives.
Ophthalmology has seen huge growth over the few years.
From cosmetic operations such as LASIK surgery through to general eye tests
the Indian middle classes have again demanded more from the eye-care
industry and international companies are well placed to capitalise on this
Many sectors including telemedicine, health insurance,
education and training, information management, healthcare services,
emergency services, clinical waste management and hospital design and
facilitation are growth areas and as such represents further opportunities
Life-saving equipment is exempt from import duty. Bulk
drugs are subject to only 10-20% duty. Other imports are liable to rates of
between 14 and 40%.
The local healthcare manufacturing industry offers
partnership potential. Expansion is rapid and manufacturers, distributors
want partners, joint ventures and agency agreements.
Opportunities exist for those who can supply a high
quality integrated range of products with an exceptional service network
whilst taking a long-term consultative approach to business.