The Indian healthcare system has experienced significant growth in the past two decades, making it one of the largest sectors of the country’s economy. Several changes have increased the investment opportunities in the Indian healthcare system and contributed to its growth. The changes include a growing middle class, increased foreign direct investments (FDI) inflows, and accelerated adoption of digital technologies such as telemedicine. The country’s government has also announced conducive policies for encouraging FDI through deep structural and sustained reforms to the healthcare sector, including permitting it up to 100%. Consequently, India has emerged as one of the fastest-growing emerging economies, with its FDI inflows growing from $2.5 billion in 2000-2001 to $50 billion in 2019-2020. Hospital groups, diagnostic chains, and home healthcare sections have also benefited from increased investments from private equity from overseas, while private healthcare providers have experienced oversubscription of IPOs. These factors portray the Indian healthcare system as one of the most lucrative investment options for local and foreign healthcare investors.
The most significant growth in the Indian healthcare system has been experienced in the past five years. The growth has been associated with increased technological adoption, with healthcare providers exploiting opportunities for enhanced care delivery offered by telehealth, AI, IoT, and big data. Statistics indicate that the sector has been growing at a CAGR of 22% since 2016 and currently employs 4.7 million people. There has also been increased adoption of medical devices and equipment, and investors can enhance the field by expanding diagnostic and pathology centers. Miniaturized diagnostics also offer a key opportunity for growth, and India’s inherent strengths in alternative medicine systems enhance this and other growth prospects.
Investors can exploit technological growth and expand the scope of wearable devices to track health conditions. This investment also includes an opportunity to develop patient-facing mobile health applications and greater integration of AI, robots, and blockchain technologies. Technology also offers investors an opportunity to boost domestic manufacturing of pharmaceuticals. The opportunity has been supported by recent government schemes with performance linked incentives. Notably, patents worth $251 billion are expected to expire globally between 2018 and 2024, presenting a lucrative investment opportunity for India’s pharmaceutical sector.
The Indian healthcare system has experienced demand and supply gaps, creating more investment opportunities in the hospital sector, assisted living, home healthcare, lab and diagnostics, among others. In the medical diagnostics area, the Indian healthcare sector has only 2,700 mammograms installed which are less than 5% of those available in the US. Similarly, India has approximately 120 PET-CT scanners, most of which are only available in metropolitan cities and only 30% of cancer centers have advanced imaging technologies. This shortage has been faced by increased demand for medical devices as the Indian government emphasizes early diagnosis of non-communicable diseases through initiatives such as health and wellness centers. Therefore, there is a need to implement comprehensive screening programs and target specific disease profiles relevant to the indigenous population and specific communities. Closing this gap will allow for early detection of diseases such as breast, cervix and prostate cancers. In addition to these opportunities in the hospital sector, investors can utilize gaps in assisted living and home healthcare sections, whose demand has been rising. Since the elderly population is at a higher risk of chronic illnesses, investors need to venture into the Indian healthcare system and close the demand and supply gap in home healthcare and assisted living devices.
There are also demand and supply gaps in the Indian healthcare sector associated with the availability of treatment services. The gap is associated with the fact that up to 60% of health facilities are concentrated in a few large cities across India. Currently, 30-35% of patients in India undergo surgery compared to the global 60-65%, and 15-20% of patients in India undergo radiotherapy compared to the global 40-50%. Therefore, there is a need to reduce the gap in overall cancer care by correcting the skewed spread and density of radiotherapy installations and encouraging the installation of linear accelerators in private institutions. Further, India currently has 1.3 hospital beds per 1,000 people, and an additional 3 million beds will be needed to achieve the target of 3 beds per 1,000 people by 2025.
In conclusion, India’s healthcare system is in its earlier developmental stages and still has extensive scope left unexplored. For instance, tier three and tier two cities need better access to healthcare facilities, and the government has ensured a conducive environment for investors. There are demand and supply gaps that investors can fill and become part of the fastest-growing sector in India. Notably, more investment opportunities are expected to continue emerging in the Indian healthcare sector as it continues to grow.