The Healthcare Industry in India, which stood at a size of USD 110 billion in 2016, is expected to reach a size of over USD 372 billion by 2022, registering a CAGR of 22%. The hospital industry in India stood at USD 61.79 billion in 2017 and is expected to increase at a 16-17% CAGR to reach a size of USD 132.84 billion by 2023.
The Indian healthcare industry has today become a preferred sector for strategic and financial investments. Private sector players occupy a major share of nearly 80% of the country’s total healthcare market. They also account for almost 74% of the country’s total healthcare expenditure. Their share in hospitals alone is estimated at 74% while the share of hospital beds is estimated at 40%.
The Healthcare sector in India broadly includes
- Pharmaceutical Companies & Standalone Pharmacies,
- Diagnostic Services,
- Medical Equipment and Supplies,
- Medical Insurance,
- Telemedicine Companies,
- Medical Tourism and
- Retail Healthcare.
Based on the success and breadth of services offered by the private sector hospitals, rural populations are increasingly seeking care from this sector. Of all the levels of care mentioned in the chart below, treatment by a private doctor/clinic is the single most important point of contact for the treatment of ailments for rural areas (50.7%) and urban areas (49.3%).
This is followed by treatments at private hospitals, public hospitals and Health sub-centers (HSC), Primary Health Centres (PHC) & others.
It is important to mention that the Country’s healthcare sector is strongly supported by the Indian Government which has been undertaking commendable work to develop India as a global healthcare hub.
Government healthcare spending
The Government has a goal of raising its healthcare spending to 2.5% of GDP from the current level of 1.1% of the GDP by 2025 under the National Health Policy 2017.
Over the years, several initiatives to drive the growth of the healthcare sector in the country have been yielding positive results. These initiatives have gone a long way in not only improving the overall healthcare access for the general population but have also enhanced the quality of healthcare in the country.
The Country ranks 145 among 195 countries in terms of quality and accessibility of healthcare. These statistics indicate that there is tremendous scope for enhancing healthcare services penetration in India and ample opportunity for the development of the healthcare industry as a whole.
Conducive policies for encouraging FDI, tax benefits, and favourable government policies coupled with promising growth prospects are helping the industry attract private equity, venture capital and foreign players.
Today, Indian companies are entering into alliances with domestic and foreign companies to drive growth and gain new markets. Going ahead, strong fundamental factors such as rising income levels, ageing population, growing health awareness and changing attitude towards preventive healthcare are expected to boost healthcare services demand.
The Indian healthcare sector was ranked as the 4th largest employer with a total employee base of 319,780 people in FY17. By 2020, the sector is expected to generate 40 million jobs in India. The Country is also expected to rank amongst the top 3 healthcare markets in terms of incremental growth by 2020.