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A burgeoning rural population, growing chronic and lifestyle diseases, in conjuction with the Covid-19 crisis have all led to a rise in India’s healthcare sector.
Healthcare has become one of the largest sectors of the Indian economy, in terms of both revenue and employment. The advent of medical technology and the demand generated by the Covid-19 pandemic have further spurred the sector towards greater growth. In fact, the healthcare industry in India is growing at a CAGR of 22 per cent and is projected to reach USD 372 billion by 2022, according to latest report submitted by NITI Aayog. According to Invest India, the diagnostics market alone is expected to grow at a CAGR of 20.4% by 2022 to reach $32 bn from $5 bn in 2012.
A burgeoning population and vast inequalities in healthcare distribution alongside the lack of trained healthcare clinicians and related infrastructure gaps have always been challenges within India’s healthcare sector. However, growing investment in telemedicine, training programmes and medical the technology over the years had resulted in more diversification and investments within the healthcare sector. In addition, non-metros (Tier-II and III cities) are now emerging as growing markets. These cities have also been the first to recover compared to the metropolitan areas, as they were less badly hit by the COVID-19 outbreak, as per the report.
And while the Covid crisis has brought with it a sense of urgency to develop and improve healthcare and health infrastructure, there have also been several other contributing factors that hastened the growth within the Indian healthcare sector.
In a statement from the report, NITI Aayog CEO Amitabh Kant said “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.”
The hospital industry was valued at USD 61.79 billion in 2016-17 and is expected to reach USD 132 billion by 2023, growing at a CAGR of 16 -17 per cent.
Given the acute shortage of hospital beds and equipment such as ventilators, it should come as little surprise that the subsector has been the developing fast, attracting more and more investments. According to the report around 65 per cent of hospital beds in India cater to almost 50 per cent of the population concentrated in Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, Telangana, West Bengal and Kerala. 'The other 50 per cent of the country's population living in the remaining 21 states and 8 Union Territories has access to only 35 per cent of hospital beds.
'Simple arithmetic indicates that there is tremendous potential to grow hospitals beds, by at least 30 per cent, for ensuring equitable access to healthcare for citizens in all parts of the country,' the report noted.
The adoption of home healthcare solutions, while still in its early stages in India, it has primed for huge growth, particularly given its application to India’s burgeoning rural population, growing chronic and lifestyle diseases and a rise in the country’s ageing population in the country. Home healthcare solutions also offer a solution to addressing the low doctor to patient ratio within India.
The report by NITI Aayog also pointed out that technology advancements such as artificial intelligence, wearables and other mobile technologies, along with the internet of things, offer several avenues for investment in key segments. These market segments are expected to diversify as an ageing population with a growing middle class increasingly favours preventative healthcare.