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$ 160 billion by 2017.
On the back of continuously rising demand, the hospital services industry is expected to be worth US$
81.2 billion by 2015. The Indian hospital services sector generated revenue of over US$ 45 billion in
2012. This revenue is expected to increase at a compound annual growth rate (CAGR) of 20 per cent
during 2012-2017, according to a RNCOS report titled, ‗Indian Medical Device Market Outlook to
The healthcare industry in India is experiencing gradual transition from paper files to electronic
mediums. The Indian healthcare assisted by IT market has been growing tremendously over the past
few years. It is expected to grow at a CAGR of around 22.7 per cent during the period 2013-2015.
The hospital and diagnostics centre in India received foreign direct investment (FDI) worth US$
1,914.28 million, while drugs & pharmaceutical and medical & surgical appliances industry registered
FDI worth US$ 11,318.32 million and US$ 653.45 million, respectively during April 2000 to June 2013,
according to data provided by Department of Industrial Policy and Promotion (DIPP).
Moreso, the other related segments like genetic testing market is expected to grow at a CAGR of
around 9 per cent during 2012-2017 and that of the diagnostic services market in India at a CAGR of
around 26 per cent during 2012-2015. All the growth is based on the foundation on huge investments,
fast expansion into tier II & III cities, and strong government support to strengthen the healthcare
infrastructure in the country.
Trends and Investments
The Indian healthcare providers plan to spend Rs 5,700 crore (US$ 897.64 million) on IT products
and services in 2013, a seven per cent rise over 2012 revenues of Rs 5,300 crore (US$ 834.65
million), as per a report by Gartner.
The Indian-American doctors‘ community plans to organise the "Global Healthcare Summit" in
Ahmedabad, Gujarat, from January 3-5, 2014, to bring affordable world class healthcare for Indians.
Global Healthcare Summit 2014 aims at advancing the accessibility, affordability and quality of world-
class healthcare to the Indian people. The Summit will also focus on prevention, diagnosis, treatment
options and share ways to truly improve healthcare transcending global boundaries, as per Dr Jayesh
Shah, President, Association of American Physicians of Indian Origin (AAPI).
Some of the major investments in the sector include:
VLCC has bought controlling stake in Singapore-based Global Vantage Innovative Group (GVig). "We have
acquired 80 per cent stake in GVig. The acquisition will give us a foothold in dermatological solutions," said Mr
Mukesh Luthra, Chairman, VLCC Group
Apollo Hospitals has 1,500 bed capacity in the East and North East region and plans to add another 1,500
beds. The firm plans to open four new hospitals – one each in Kolkata, Patna, Raipur and Guwahati. The
hospital also achieved a milestone by implanting 700 cochlear devices. A cochlear implant is a small, complex
electronic device that can help to give a sense of sound to a person who is severely hard-of-hearing
Piramal‘s healthcare vertical plans to invest US$ 2.5 million at its FDA-approved Grangemouth (UK) site to
upgrade their antibody drug conjugate (ADC) manufacturing suites
Corona Remedies Pvt Ltd has announced a tie up with Spain's Medical Diagnostics Aragon (MDA) for the
pan-India launch of 'Rehidrata-T,' an oral rehydration salt (ORS) formulation in form of a gel. The ORS market
size in India is about Rs 2,000 crore (US$ 314.96 million) per annum with a CAGR of 10 per cent
ASK Pravi, a joint venture (JV) between ASK Group and Pravi Capital, has acquired a minority stake in
Hyderabad-based OMNI Hospitals for Rs 60 crore (US$ 9.45 million)
Zydus Cadila plans to set up an injectible facility at Vadodara, Gujarat, at an investment of Rs 100 crore (US$
15.75 million) by 2015. The company also plans to expand its hospital business across Gujarat in the next
Dr Devi Shetty and Rudrabhishek Infrastructure Trust have entered into a JV to set up a 300 bed multi
speciality hospital worth Rs 100 crore (US$ 15.75 million) in Lucknow, Uttar Pradesh (UP)
CDC Group and Abraaj Group have jointly invested Rs 107.3 crore (US$ 16.90 million) in Hyderabad-based
Several key trends are giving impetus to the growth of India‘s healthcare sector. Of 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. Due to such promising factors, the medical tourism has great potential in the
The industry in India is pegged at US$ 1 billion per annum, growing at around 18 per cent and is
expected to touch US$ 2 billion by 2015. India has witnessed an influx of patients from Africa, CIS
countries, Gulf and SAARC nations, Pakistan, Bangladesh and Myanmar, who mainly come for organ
transplant, orthopedic, cardiac and oncology problems.
Apollo Hospitals has six tele-medicine (through video-conferencing system) centres in the East and
North East India. Plans are afoot to add another 24 over the next couple of years.
The Government of India has decided to increase health expenditure to 2.5 per cent of gross
domestic product (GDP) by the end of the Twelfth Five Year Plan (2012-17). Dr Manmohan Singh, the
Prime Minister of India, also emphasised the need for increased outlay to health sector during the
Twelfth Five Year Plan. Moreover, 100 per cent FDI is permitted for health and medical services
under the automatic route.
In a recent initiative, 348 essential medicines will now come under price control in India. These
currently contribute Rs 13,033 crore (US$ 2.05 billion) to the total annual sales of Rs 72,762 crore
(US$ 11.46 billion), according to market research firm IMS Health‘s analysis.
Some highlights of the Union Budget 2013-14 presented by Mr P Chidambaram, Minister of Finance,
Government of India, for the healthcare are as follows:
Health for all remains one of the priority sectors for the Government
The Ministry of Health & Family Welfare has been allocated Rs 37,330 crore (US$ 5.87 billion). Of this, the
new National Health Mission that combines the rural mission and the proposed urban mission will get Rs
21,239 crore (US$ 3.35 billion), an increase of 24.3 per cent over the Revised Estimates (RE)
Rs 4,727 crore (US$ 744.41 million) for medical education, training and research
In addition, contributions made to schemes of Central and State Governments similar to Central
Government Health Scheme, eligible for section 80D of the Income Tax Act.
The country's healthcare system is developing rapidly and it continues to expand its coverage,
services and spending in both the public as well as private sectors. This is creating a large market for
hospital information systems and other healthcare-related IT solutions.
The favourable demographic virtues offer an attractive market for healthcare providers and investors
in India. An increase in foreign investment inflows and private equity (PE) deals in the industry‘s
various segments have also been noted, in addition to the increased focus received from the
Exchange Rate: INR 1 = US$ 0.01574 as on September 12, 2013
References: Department of Industrial Policy and Promotion (DIPP), Union Budget 2012-13, RNCOS Reports, Media
Reports, Press Information Bureau (PIB)
India's healthcare system is developing rapidly and continues to expand its coverage, services and
expenditure in the public as well as private sectors. This is creating a large market for hospital
information systems and other healthcare-related IT solutions.
Healthcare providers in India are expected to spend US$ 1.08 billion on IT products and services in
2014, a four per cent increase over 2013, according to Gartner. It is expected to reach US$ 276
million in 2014, up from US$ 266 million in 2013 – with the consulting segment growing by 8 per cent.
The domestic health care sector is poised to touch US$ 100 billion by 2015 and US$ 275.6 billion by
2020, according to industry estimates.
In 2013, healthcare and life sciences emerged as the second favourite destination for venture capital
after technology, attracting 27 investments worth US$ 181 million, according to research firm Venture
The hospital and diagnostics centre in India received foreign direct investment (FDI) worth US$
2,191.91 million, while drugs & pharmaceutical and medical & surgical appliances industry registered
FDI worth US$ 11,583.69 million and US$ 741.80 million, respectively during April 2000 to December
2013, according to data provided by Department of Industrial Policy and Promotion (DIPP).
Trends and Investments
The Singapore-based Kinder Medical Group has entered into a joint venture (JV) with Indorama Corp to mark
its entry into Kerala‘s women‘s healthcare sector.
The HCL Group has announced its foray into the healthcare segment. The Group plans to invest Rs 1,000
crore (US$ 163.93 million) in the venture over the next five years, to operate through a countrywide network of
out-patient multi-speciality clinics called HCL Avitas.
Biocon launched the world's first biosimilar drug (developed in an organism) - Trastuzumab injection - for the
treatment of breast cancer. This is the first drug developed by Biocon in partnership with the US-based
generic drug maker Mylan. The newdrug, CANMAb, will be used to treat HER2-positive advanced
Aurobindo Pharma Ltd informed the bourses that it will be acquiring NYSE-listed Actavis Plc's commercial
operations in seven western European countries in order to expand its European footprint.
The following are some of the major investments in the sector:
Narayana Health has opened a multi-care 104 bed hospital in Cayman Islands providing open-heart and
bypass surgery, angioplasty, heart-valve replacement, paediatrics and orthopaedics, including joint
replacements. This is a US$ 2 billion project that will be built in phases over 15 years on a 200 acre site and
apart from a tertiary-care hospital.
ClearPath Orthodontics, an American company specialising in teeth aligners, is expanding in India through tie-
ups with leading corporate dental giants across the country.
Cadila Healthcare (Zydus Cadila) has received the final approval from the US drug regulator, US Food and
Drug Administration (USFDA), to market Etodolac Extended-release tablets USP. The drug is prescribed for
treatment of juvenile arthritis, rheumatoid arthritis and osteoarthritis.
Manipal Health Enterprises has forayed into Rajasthan by acquiring the S K Soni Hospital. The group will
invest over Rs 100 crore (US$ 16.39 million) in the healthcare sector in Rajasthan.
Canara Bank has lent support to Biocon Foundation and Orissa Trust of Technical Education (OTTET) for a
public-private partnership (PPP) with the Government of Odisha, to deliver a novel e- healthcare program in
order to provide access to quality healthcare for 51,000 villages in the state.
Medical tourism also referred as medical travel, health tourism or global healthcare is a term used to
describe the rapidly-growing practice of travelling across international borders to seek healthcare
services. Health Tourism includes segments such as multi-specialty hospitals, ayurveda, holistic
medicine centres and health spas; adventure tourism and ecotourism providers.
Services typically sought by travelers include elective procedures as well as complex surgeries, etc.
Medical tourism is a booming phenomenon in countries like India. Medical tourists choose India as
their favorable destination because of the key opportunities in Indian healthcare sector in the form of
efficient infrastructure and technology.
Majority of these tourists came to Indian shores seeking liver transplant, heart surgeries like bypass or
pacemaker, bone marrow transplant, hip replacement, knee replacement, eye surgeries, etc. Indian
expertise in conducting these surgeries with most advanced technology is at par or sometimes even
beyond comparison with its American or European counterparts.
Medical tourists visiting India are anticipated to touch 3,200,000 by 2015 and medical tourism is
expected to grow at an annual rate of 30 per cent till 2015.
India‘s decision to offer visa-on-arrival to citizens of 180 countries will be a boom for the medical
tourism industry in the country, as per Mr Ajay Bisaria, Joint Secretary of the Eurasia Division of the
Indian External Affairs Ministry.
Apollo Health City, Hyderabad has been bestowed the prestigious ‗International Medical Tourism
Award‘ for Excellence in customer service, by the reputed International Medical Travel Journal, UK, at
a ceremony at JW Marriott Hotel in Dubai on March 12, 2014.
Health tourism is gaining momentum in India. The health tourism industry in India could become a
US$ 5 billion business by 2015, as per a McKinsey study.
India and Maldives have signed 3 agreements after delegation level talks between Mr Abdulla
Yameen Abdul Gayoom, President, Maldives, and Dr Manmohan Singh, Prime Minister of India, on
January 2, 2014. The pacts include a memorandum of understanding (MoU) on health cooperation.
Scotland is offering a slew of facilities for Indian pharma and biotech companies to conduct clinical
trials, according to Ms Rooma Bussi, Country Director – India, Scottish Development International
(SDI). Both Scotland and Indian businesses could partner in stem cell research, clinical trials,
regenerative medicine and affordable healthcare, said Mr Pradeep Ramayya, Chief Executive of
Scotland-based AxSys Technology Ltd.
The Union Cabinet has approved the proposal for setting up of National Cancer Institute (NCI) at a
cost of Rs 2,035 crore (US$ 333.61 million). NCI will be set up in the Jhajjar campus (Haryana) of All
India Institute of Medical Sciences (AIIMS). The project is estimated to be completed in 45 months.
The Government of India has allocated Rs 67,398 crore (US$ 11.05 billion) to the Ministry of Human
Resource Development (HRD) and Rs 33,725 crore (US$ 5.53 billion) to the Ministry of Health and
Family Welfare under the Union Budget 2014-15.
India is a land full of opportunities for players in the medical devices industry. The country has also
become one of the leading destinations for high-end diagnostic services with tremendous capital
investment for advanced diagnostic facilities, thus catering to a greater proportion of population.
Besides, Indian medical service consumers have become more conscious towards their healthcare
―India is not just a great emerging power, in medicine it is a well-established leader, and we have a lot
to learn from this success,‖ highlighted Mr Alexander Kadakin, Russian Ambassador to India.
Exchange Rate: INR 1 = US$ 0.01635 as on March 18, 2014
References: Department of Industrial Policy and Promotion (DIPP), Union Budget 2012-13, RNCOS
Reports, Media Reports, Press Information Bureau (PIB)
India has been awarded a ‗Polio Free‘ status by way of an official certification presented by the World
Health Organisation (WHO). India is among other countries in the South East Asian region which
have been certified as being free of the polio virus. India has been polio free since January 2011, as
per Mr Ghulam Nabi Azad, Minister for Health and Family Welfare, Government of India.
Healthcare in India today provides existing and new players with a unique opportunity to achieve
innovation, differentiation and profits. In the next decade, increasing consumer awareness and
demand for better facilities will redefine the country‘s second largest service sector employer.
India's primary competitive advantage over its peers lies in its large pool of well-trained medical
professionals. Also, India's cost advantage compared to peers in Asia and Western countries is
significant — cost of surgery in India is one-tenth of that in the US or Western Europe.
In India, the diagnostics sector has been witnessing immense progress in innovative competencies
and credibility. Technological advancements and higher efficiency systems are taking the market to
new heights. The RNCOS report, 'Indian Diagnostic Market Outlook to 2015', highlights that the IVD
equipment market will grow at a compound annual growth rate (CAGR) of around 15 per cent from
2012 to 2015.
The healthcare sector in India is expected to grow at a CAGR of 15 per cent to touch US$ 158.2
billion in 2017 from US$ 78.6 billion in 2012, according to a report by Equentis Capital.
India being a country with a growing population, its per capita healthcare expenditure has increased
at a CAGR of 10.3 per cent from US$ 43.1 in 2008 to US$ 57.9 in 2011, and going forward it is
expected to reach US$ 88.7 by 2015.
The factors behind the growth of the sector are rising incomes, easier access to high-quality
healthcare facilities and greater awareness of personal health and hygiene.
Healthcare providers in India are expected to spend US$ 1.08 billion on IT products and services in
2014, a four per cent increase over 2013.
The private sector has emerged as a vibrant force in India's healthcare industry, lending it both
national and international repute. The sector‘s share in healthcare delivery is expected to increase
from 66 per cent in 2005 to 81 per cent by 2015. The private sector's share in hospitals and hospital
beds is estimated at 74 per cent and 40 per cent, respectively.
According to data released by the Department of Industrial Policy and Promotion (DIPP), hospital and
diagnostic centres attracted foreign direct investment (FDI) worth Rs 11,272.32 crore (US$ 1.87
billion) between April 2000 and February 2014.
Some of the major investments in the Indian healthcare industry are as follows:
Jaypee Group plans to diversify into healthcare by investing in excess of Rs 2,000 crore (US$ 332.68 million)
over the next 3–4 years to set up a hospital chain with a minimum capacity of 3,000 beds.
Helion Venture Partners has invested Rs 27 crore (US$ 4.49 million) in multi-specialty dental care chain
Denty's, as demand for quality patient care increases rapidly in India.
Medwell Ventures Pvt Ltd has acquired Bengaluru-based Nightingales Home Health Services, which has more
than 5,000 families subscribing to its annual care plans. The company expects to establish a network in 10
Indian metro clusters serving over a million families in the coming years.
Strand Life Sciences has partnered with the Mazumdar-Shaw Medical Foundation (MSMF) to set up a lab that
aims to bring down the cost of detecting cancer.
GE Healthcare and Cancer Treatment Services International have announced plans to launch 25 cancer
detection and treatment centres all over India with an investment of Rs 720 crore (US$ 119.77 million) in the
next five years.
ChrysCapital has invested around US$ 40 million in Torrent Pharma, expanding its portfolio of healthcare
companies and taking up the total exposure in the sector to nearly US$ 300 million.
The Planning Commission has allocated US$ 55 billion under the 12th Five-Year Plan to the Ministry
of Health and Family Welfare, which is about three times the actual expenditure under the 11th Five-
Year Plan. The 12th Plan focuses on providing universal healthcare, strengthening healthcare
infrastructure, promoting research and development (R&D) and enacting strong regulations for the
Some of the major initiatives taken by the government to promote the healthcare sector in India are as
All India Institute of Medical Sciences (AIIMS) spends at least Rs 2 million (US$ 33,271.51) annually on each
faculty member, according to a study by the institute's hospital administration.
Sikkim has become India's first state with 100 per cent sanitation coverage, according to a report of the
drinking water and sanitation ministry. "The state has also sensitised people to adopt a holistic approach to
improve sanitation and hygiene for a clean environment while accelerating overall development in the state,"
according to the Government of Sikkim.
India and Maldives have signed three agreements after delegation level talks between Mr Abdulla Yameen
Abdul Gayoom, President, Maldives, and Dr Manmohan Singh, Prime Minister of India, on January 2, 2014.
The pacts include a Memorandum of Understanding (MoU) on health cooperation.
The Union Cabinet has approved the proposal for setting up of National Cancer Institute (NCI) at a cost of Rs
2,035 crore (US$ 338.51 million). NCI will be set up in the Jhajjar campus (Haryana) of All India Institute of
Medical Sciences (AIIMS), New Delhi. The project is estimated to be completed in 45 months.
Mr Sis Ram Ola, Union Minister of Labour and Employment, Government of India, has inaugurated the state-
of-the-art ESIC Model Hospital at Jaipur, Rajasthan.
Telemedicine is a fast emerging sector in India. In 2012, the telemedicine market in India was valued
at US$ 7.5 million, and is expected to grow at a CAGR of 20 per cent to US$ 18.7 million by 2017.
India's competitive advantage also lies in the increased success rate of Indian companies in getting
Abbreviated New Drug Application (ANDA) approvals. India also offers vast opportunities in R&D as
well as medical tourism.
The Indian medical tourism industry is pegged at US$ 1 billion per annum, growing at around 18 per
cent and is expected to touch US$ 2 billion by 2015.
There is a significant scope for enhancing healthcare services considering that healthcare spending
as a percentage of GDP is rising. Rural India, which accounts for over 70 per cent of the population, is
set to emerge as a potential demand source. Only three per cent of specialist physicians cater to rural
There are vast opportunities for investment in healthcare infrastructure in both urban and rural India.
About 1.8 million beds are required by the end of 2025. Additionally, 1.54 million doctors and 2.4
million nurses are required to meet the growing demand.