Investing in India's Healthcare Sector: Opportunities and Enabling Policies – India Briefing

Investing in India’s Healthcare Sector: Opportunities and Enabling Policies, the latest publication from Dezan Shira & Associates is out now and available for free download through the Asia Briefing Publication Store.
Investing in India's Healthcare Sector: Opportunities and Enabling Policies
India’s highly diversified healthcare sector is an attractive investment avenue, with high growth rate recorded in new segments like telemedicine and medical tourism, besides hospitals, medical devices and equipment, health insurance, diagnostics, clinical trials, and the pharmaceuticals industries.
India is now within the top five economies in the world and is witnessing rising incomes and rapid urbanization. These factors have given way to sedentary lifestyles, which are increasingly inducing diseases caused by high blood sugar, high cholesterol, obesity, alcohol consumption, etc. This has in turn popularized the concept of preventive healthcare, necessitating the provision of specialized healthcare services and establishment of super specialty hospital networks.
In this issue of India Briefing magazine, we provide readers with an overview of India’s healthcare ecosystem, major trends in the domestic healthcare market, and scope for medical tourism. This is followed by a spotlight on the role played by technological innovation in overcoming long-term challenges plaguing the country’s healthcare infrastructure. Finally, we identify the tax incentives available to the sector and major enabling policies.
The Indian healthcare market is projected to reach US$367 billion by 2023 and US$638 billion by 2025 – supported by improvements in healthcare coverage, services, and increasing expenditure by public as well as private players.
While the outbreak of COVID-19 exposed major gaps in India’s healthcare capabilities, it created massive investment opportunities for hospital infrastructure, insurance, pharmaceutical manufacturing and R&D, technology-enabled service industries, and human capital growth.
Restrictions to general mobility, including visits to the hospital, during the pandemic-linked lockdowns jumpstarted the availability of a wide range of fitness and wellness-oriented platforms and patient-centric solutions via digital disruptors. Underlying the digitally-driven innovation has been the emergence of several successful healthtech start-ups like Cult.fit, HealthifyMe, Pharmeasy, Innovaccer, Pristyn Care, etc. 
While the traditional healthcare system is fraught with constraints due to lack of equitable access to quality care, the digitized healthcare system, albeit at a nascent development stage, has begun offering convenient, accessible, and low-cost services. Consequently, India’s healthtech market has recorded tremendous growth over the last 12 years, growing from US$500 million in 2010 to an estimated market size of US$10.6 billion in 2022, peaking during the pandemic. The segment is expected to reach a market size of US$21.3 billion by 2025, acquiring a 3.2 percent share in the global healthtech market as per estimates by INC42.
Moreover, in addition to infrastructure and accessibility issues, medical supply shortages during the pandemic have reminded India that it must become self-reliant when catering to its public healthcare needs.
Since 2020, the central government has announced various policies and incentive schemes to redress long-standing obstacles to the development of the country’s healthcare sector. Meanwhile. industry players have begun to diversify their investments to expand on existing business models. Obviously, the two have worked in tandem – the government’s facilitative policy environment promoting private sector participation. Examples include the Telemedicine Guidelines 2020, Production-Linked Incentive (PLI) schemes for medical devices, and various sub-schemes for the promotion of pharmaceutical segments. 
Above and beyond the pandemic-driven trends, a general focus on health and wellness has gained prominence worldwide, including in India. Such focus has shifted interest towards alternative systems of medicine, in turn creating potential for R&D and investment in services and professional training. The Indian government has been keen to capitalize on this trend and has put in place a policy framework under the Ministry
of AYUSH. AYUSH refers to the Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy systems of alternative medicine, which have a long tradition of practice in India.
As India’s healthcare sector matures in its scope of services and sub-sector specialization, while offering comparatively affordable and high quality care, foreign investors will benefit from the vast domestic market and the business value of the medical tourism segment. 
Major segments in India's healthcare sector
India digital health and fitness industry
FDI India Healthcare sector
For assistance in doing business in India or queries about entering the country’s healthcare market, please feel free to mail us at [email protected].
About Us
India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may write to [email protected] for more support on doing business in in India.
We also maintain offices or have alliance partners assisting foreign investors in Indonesia, Singapore, Vietnam, Philippines, Malaysia, Thailand, Italy, Germany, and the United States, in addition to practices in Bangladesh and Russia.
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