HEALTHCARE

For updated information, please visit www.ibef.org January 2019

Table of Content

Executive Summary................................... 3

Advantage India ........................................ 4

Market Overview and Trends.....................6

Notable Strategies and Trends Adopted...11

.
Growth Drivers ........................................ 15

Opportunities ........................................... 26

Key Industry Organisations ...................... 29

Useful information.................................... 31
 EXECUTIVE SUMMARY

 India is expected to rank amongst the top three healthcare markets in terms of incremental growth by 2020.

 In FY17, Indian healthcare sector stood as the fourth largest employer as the sector employed a total of
319,780 people. The sector is expected to generate 40 million jobs in India by 2020.
Fourth Largest Employer
 In May 2017, the Asian Research and Training Institute for Skill Transfer (ARTIST) announced plans to
create around one million skilled healthcare providers by 2022.

 100,000 jobs are expected to be created from Ayushman Bharat, the National Health Protection Scheme.

 Indian healthcare sector, is expected to record a threefold rise, at a CAGR of 22 per cent during 2016-2022
to reach US$ 372 billion in 2022 from US$ 110 billion in 2016.
Impressive Growth
 India ranks 145th among 195 countries in terms of quality and accessibility of healthcare. There is immense
Prospects
scope for enhancing healthcare services penetration in India, thus presenting ample opportunity for
development of the healthcare industry.

 Rising income levels, ageing population, growing health awareness and changing attitude towards preventive
healthcare is expected to boost healthcare services demand in future.
Strong Fundamentals and
 The low cost of medical services has resulted in a rise in the country’s medical tourism, attracting patients
Cost Advantage
from across the world. Moreover, India has emerged as a hub for R&D activities for international players due
to its relatively low cost of clinical research.

Favourable Investment  Conducive policies for encouraging FDI, tax benefits, favourable government policies coupled with promising
Environment growth prospects have helped the industry attract private equity, venture capitals and foreign players.

Source: Business Standard, Ministry of External Affairs, Ministry of External Affairs (Investment and Technology Promotion Division), ASSOCHAM-RNCOS joint paper, Lancet study

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 HEALTHCARE

ADVANTAGE INDIA
 ADVANTAGE INDIA

 Investment in healthcare infrastructure is

 Healthcare market in India is expected to
set to rise, benefiting both ‘hard’
reach US$ 372 billion by 2022 , while (hospitals) and ‘soft’ (R&D, education)
medical devices market is expected to cross infrastructure.
US$ 11 billion by 2022.
 The hospital industry in India is expected
 Rising incomes, greater health awareness, to grow CAGR of 16-17 per cent to reach
lifestyle diseases and increasing access to Rs 8.6 trillion (US$ 132.84 billion) by FY22
insurance will contribute to growth. from Rs 4 trillion (US$ 61.79 billion) in
FY17.
 It is estimated that India will require 2.07
million more doctors by 2030 in order to  The Government of India aims to increase
achieve a doctor-to-population ratio of healthcare spending to three percent of
the Gross Domestic Product (GDP) by
1:1,000.
2022.
ADVANTAGE
INDIA

 Availability of a large pool of well-trained  The government aims to develop India as

medical professionals in the country. a global healthcare hub.
 The number of doctors possessing  Creation of new drug testing laboratories
recognised medical qualifications (Under and further strengthening of the 31
I.M.C Act) registered with state medical existing state laboratories.
councils/medical council of India increased
 The world’s largest government funded
to 841,104 in 2017 from 827,006 in 2010.
healthcare scheme, Ayushman Bharat
was launched on September 23, 2018.

Note: R&D – Research and Development

Source: KPMG, Deloitte, Hospital Market – India by Research on India, Frost and Sullivan, LSI Financial Services, ‘Report on Healthcare, Telemedicine and Medical Tourism in India’- ASA
and Associates LLP, Aranca Research, Indian Journal of Public Health

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 HEALTHCARE

MARKET
OVERVIEW AND
TRENDS
 THE HEALTHCARE MARKET FUNCTIONS THROUGH
FIVE SEGMENTS

Government hospitals – It includes healthcare centres, district hospitals and

general hospitals.
Hospitals
Private hospitals – It includes nursing homes and mid-tier and top-tier
private hospitals.

It includes manufacturing, extraction, processing, purification and packaging

Pharmaceutical of chemical materials for use as medications for humans or animals.

It comprises businesses and laboratories that offer analytical or diagnostic

services, including body fluid analysis.
Healthcare Diagnostics
It includes establishments primarily manufacturing medical equipment and
supplies, e.g. surgical, dental, orthopaedic, ophthalmologic, laboratory
Medical Equipment instruments, etc.
and Supplies
It includes health insurance and medical reimbursement facility, covering an
individual’s hospitalisation expenses incurred due to sickness.
Medical Insurance
Telemedicine has enormous potential in meeting the challenges of
healthcare delivery to rural and remote areas besides several other
applications in education, training and management in health sector.
Telemedicine

Source: Hospital Market – India by Research on India, Aranca Research

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 STRONG GROWTH IN HEALTHCARE EXPENDITURE
OVER THE YEARS

 Healthcare has become one of India's largest sectors both in terms Healthcare
Visakhapatnam
Sectorport
Growth
traffic
Trend
(million
(US$tonnes)
Billion)
of revenue and employment. The industry is growing at a
tremendous pace owing to its strengthening coverage, services and
400 CAGR: 16.28%
increasing expenditure by public as well private players.

 During 2008-22, the market is expected to record a CAGR of 16.28

372
350
per cent.

 The total industry size is estimated to touch US$ 160 billion by 2017 300
and US$ 372 billion by 2022.

280
 The hospital industry in India stood at Rs 4 trillion (US$ 61.79 billion) 250
in FY17 and is expected to increase at a Compound Annual Growth
Rate (CAGR) of 16-17 per cent to reach Rs 8.6 trillion (US$ 132.84 200
billion) by FY22.
150

160
140
100

104
81
73
68
50

60
52
45
0

2017E

2020F

2022F
2008

2009

2010

2011

2012

2014

2015

2016
Note: F – Forecast, E - Estimate
Source: Frost and Sullivan, LSI Financial Services, Deloitte, Aranca Research

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 PER CAPITA HEALTHCARE EXPENDITURE HAS RISEN
AT A FAST PACE

 This is due to rising incomes, easier access to high-quality Government

Visakhapatnam
Healthcare Expenditure
port traffic (million
as a percentage
tonnes) of GDP
healthcare facilities and greater awareness of personal health and
hygiene.
1.6
 Greater penetration of health insurance aided the rise in healthcare
spending, a trend likely to intensify in the coming decade. 1.5
1.4
 Economic prosperity is driving the improvement in affordability for 1.4

generic drugs in the market. 1.3

1.2
1.2 1.2
 The government’s expenditure on the health sector has grown to 1.4
per cent of GDP in FY18E from 1.2 per cent of GDP in FY14. 1.1
1

 The Government of India is planning to increase public health

spending to 2.5 per cent of the country's GDP by 2025. 0.8

0.6

0.4

0.2

0
FY13 FY14 FY15 FY16 FY17 FY18E

Note: E- Estimated, Actual data of FY18 expected to be available by March 2019 from Economic Survey FY19
Source: World Bank, Economic Survey FY18

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 HEALTHCARE INFRASTRUCTURE HAS RISEN AT A
FAST PACE

Number of Medical Colleges Number of Doctors

500 845,000
450 476
462 840,000

841,104
400
412

839,087
398
350 381 381
835,000

837,071
356

835,056
300
314

833,042
250 830,000

831,029
829,017
200

827,006
825,000
150
100 820,000
50
0 815,000
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 2010 2011 2012 2013 2014 2015 2016 2017

 India’s medical educational infrastructure has grown rapidly in the last 26 years.

 The number medical colleges in India increased to 476 in FY18 from 314 in FY11.

 The number of doctors possessing recognised medical, qualifications (Under I.M.C Act) registered with state medical councils/medical council of
India increased to 841,104 in 2017 from 827,006 in 2010.

Note: Data expected to be updated by August 2019 from National Health Profile 2019
Source: National Health Profile 2018

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 HEALTHCARE

NOTABLE TRENDS AND

STRATEGIES ADOPTED
 NOTABLE TRENDS IN THE INDIAN HEALTHCARE
SECTOR … (1/2)

 With increasing urbanisation and problems related to modern-day living in urban settings, currently, about 50
Shift from communicable per cent of spending on in-patient beds is for lifestyle diseases; this has increased the demand for
specialised care. In India, lifestyle diseases have replaced traditional health problems.
to lifestyle diseases
 Most lifestyle diseases are caused by high cholesterol, high blood pressure, obesity, poor diet and alcohol.

 Vaatsalya Healthcare is one of the first hospital chains to start focus on Tier 2 and Tier 3 for expansion.
Expansion to tier-II and
 To encourage the private sector to establish hospitals in these cities, the government has relaxed the taxes
tier-III cities
on these hospitals for the first five years.

 Telemedicine is a fast-emerging sector in India; major hospitals (Apollo, AIIMS, Narayana Hrudayalaya)
have adopted telemedicine services and entered into a number of PPPs.
Emergence of  Telemedicine market in India is expected to rise at a CAGR of 20 per cent during FY16-20, reaching to US$
telemedicine 32 million by 2020.

 Telemedicine can bridge the rural-urban divide in terms of medical facilities, extending low-cost consultation
and diagnosis facilities to the remotest of areas via high-speed internet and telecommunication.

 Rising adoption of AI-based applications has enabled people to talk directly to doctors, physician, and
Artificial Intelligence(AI) expertise for the best treatment.

 It is also capable of solving problems of patients, doctors, hospitals as well as the overall healthcare industry.

 Developments in information technology (IT) and integration with medical electronics, has made it possible to
provide high quality medical care at home at affordable prices. It enables the customers to save upto 20-50
Home healthcare per cent of the cost.

 The home healthcare market is estimated to reach US$ 4.46 billion by the end of 2018 and US$ 6.21 billion
by 2020.
Note: PPP is Public – Private Partnerships, Management contracts - An arrangement under which operational control of an enterprise is given to a separate entity for a fee
Source: IRDA, CII, Grant Thornton, Gartner, Technopak, Aranca Research

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 NOTABLE TRENDS IN THE INDIAN HEALTHCARE
SECTOR … (2/2)

 In FY18, gross healthcare insurance stood at 25.2 per cent of overall gross direct premium income by non
life insurers segment.
Increasing penetration of
 Health insurance is gaining momentum in India. Gross direct premium income underwritten by non-life
health insurance
insurers grew 19.28 per cent y-o-y to Rs 278.96 billion (US$ 3.87 billion) between April-November 2018
(provisional).

 Strong mobile technology infrastructure and launch of 4G is expected to drive mobile health initiatives in the
Mobile-based health country.
delivery  Cycle tel Humsafar is a SMS based mobile service designed for women, it enables women to plan their
family in a better way.

 Digital Health Knowledge Resources, Electronic Medical Record, Mobile Healthcare, Electronic Health
Record, Hospital Information System, PRACTO, Technology-enabled care, telemedicine and Hospital
Technological initiatives Management Information Systems are some of the technologies gaining wide acceptance in the sector.

 India’s medical technology sector is forecasted to reach US$ 9.60 billion by 2022.

 A new trend is emerging as luxury offerings in healthcare sector. More than essential requirements,
Luxury offering healthcare providers are making offerings of luxurious services. For example: pick and drop services for
patient by private helicopters and luxurious arrangements for visitors to patient in hospital.

Source: Business Standard, Ministry of External Affairs, Ministry of External Affairs (Investment and Technology Promotion Division)

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 STRATEGIES ADOPTED

 Private players in the industry are making their supply chains efficient and leveraging economies of scope to
reduce cost. One such example is Narayan Hrudayalaya (NH) where health care is provided at affordable
Cost leadership
cost. NH reduces cost by high procurement of medical supplies, high-volume by high capacity utilisation and
staff productivity and good human capital management (i.e. training).

 Players in the industry are trying to differentiate themselves by providing multiple health care services under
Differentiation and
one roof.
diversified business
 Offering a range of healthcare and wellness services under a single brand has become a trend. Patients and
approach
healthcare services seekers find it convenient. Demand of such arrangements boosts the healthcare sector.

 Certain players in industry focus only on providing one kind of health care service to its customers. This also
helps them to be the leader in that service. Many examples can be quoted for hospitals focusing on
Focus
treatment of cancer and providing leading cancer treatment and eye related problems and treatments in
India.

 In December 2018, Radiant Life Care Ltd and Max Healthcare Ltd agreed on a merger, which will result in
India’s third largest hospital and diagnostics company at a combined value of Rs 7,242 crore (US$ 1 billion).

Merger and  In October 2018, Zydus Wellness and Cadila Healthcare jointly acquired Heinz India for Rs 45.95 billion
(US$ 654.75 million).
Acquisitions
 As of September 2018, Radiant Hospital acquired 49.70 per cent stake in Max Health for US$ 293 million.

 Healthcare sector in India witnessed 23 deals worth US$ 679 million in H12018.

Source: Aranca Research, PE Roundup – 1H2018 & Jun’18 report by EY

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 HEALTHCARE

GROWTH DRIVERS
 INDIAN HEALTHCARE SECTOR IS POISED TO GROW

 Rising incomes and affordability.

 Growing elderly population, changing disease patterns.

Growing Demand
 Rise in medical tourism.

 Better awareness of wellness, preventive care and diagnosis.

 Encouraging policies for FDI and the private sector.

 Reduction in customs duty and other taxes on life-saving equipment.

Policy Support
 NRHM allocated US$ 10 billion for healthcare facilities.

 National Health Insurance Mission to cover entire population.

 Expanding research and development and distribution facilities in India.

Focus  Use of modern technology.

 Providing support to global projects from India.

 Rising FDI and private sector investments.

Merger and Acquisitions  Lucrative M and A opportunities.

 Foreign players setting R and D centres and hospitals.

Note: FDI – Foreign Direct Investment, M&A - Mergers and Acquisitions NRHM - National Rural Health Mission
Source: Ministry of Health and Family Welfare, Government of India, Aranca Research

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 RISING INCOME, AGEING POPULATION TO BE KEY
HEALTHCARE DEMAND DRIVER

 Rising incomes mean a steady growth in the ability to access Visakhapatnam

GDP Per Capitaport
at Current
traffic (million
Prices*tonnes)
(US$)
healthcare and related services.

 Per capita GDP of India is expected to reach US$ 3,273.85 in 2023 3,500
from US$ 1,481.56 in 2012.

3,273.85
 Moreover, changing demographics will also contribute to greater
3,000
healthcare spending; this is likely to continue with the size of the

3,006.54
elderly population set to rise from the current 98.9 million to about

2,762.31
168 million by 2026. 2,500

2,538.82
 Per capita GDP at current prices for 2018 was US$ 2,134.75.

2,334.14
2,134.75
2,000

1,982.70
1,749.16
1,638.76
1,500

1,610.36
1,485.60
1,481.56
1,000

500

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023
Note: * estimates after 2013
Source: International Monetary Fund, World Economic Outlook Database, April 2018

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 MEDICAL TOURISM: A NEW GROWTH FACTOR FOR
INDIA’S HEALTHCARE SECTOR

 Presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical
tourism.

 Superior quality healthcare, coupled with low treatment costs in comparison to other countries, is benefiting Indian medical tourism which has, in
turn, enhanced the prospects of the Indian healthcare market.

 Treatment for major surgeries in India costs approximately 20 per cent of that in developed countries.

 India also attracts medical tourists from developing nations due to lack of advanced medical facilities in many of these countries.

 Indian medical tourism market is growing at the rate of 22-25 per cent and is expected to reach US$ 6.0 billion by 2018 from US$ 3.0 billion in
2017.

 The number of Foreign Tourist Arrivals (FTAs) in India on medical visa grew 15.9 per cent year-on-year to an estimated 495,056 in 2017 from
427,014 in 2016.

 Yoga, meditation, ayurveda, allopathy and other traditional methods of treatment are major service offerings that attract medical tourists from
European nations and the Middle East to India.

 The Ministry of AYUSH, Government of India has been implementing various initiatives to promote ayurveda, yoga and other AYUSH systems of
medicine on an international level and was allocated Rs 15.28 crore (US$ 2.36 million) in 2017-18 for this purpose.

 The Government of India liberalised its policy by providing 100 per cent FDI in the AYUSH sector for wellness and medical tourism segment.

Source: Ministry of Health, RNCOS, KPMG, Deloitte, Medical Tourism Association, LSI Financial Services, Apollo Investor Presentation, Aranca Research

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 RE-EMERGENCE OF TRADITIONAL MEDICAL CARE

 The Indian ayurvedic industry is expected to reach US$ 9 billion by 2022.

Market size and Services  Ayurveda and Unani medicines consist of more than 90 per cent of plant based formulations.
Offered  The sector has broadened its offerings and now includes services on diet and nutrition, yoga, herbal
medicine, humour therapy and spa.

Leading brands and  Many big players such as Apollo, VLCC and Manipal Group are also setting up wellness centres across
players India, with traditional healthcare remedies as the focus of their offerings.

 The traditional medical sector is developing Traditional Knowledge Digital Library to prevent companies from
Notable trends claiming patents on such remedies. There is growing interest from numerous private equity firms in the
traditional healthcare sector in India.

 The country had 460 Ayurveda and homeopathy government recognised colleges in 2017-18. As of January
11, 2019, number of sub centres reached 168,157 and number of primary health centres (PHCs) increased
Developing infrastructure to 33,235.

 The total number of ayurveda practitioners in India increased to 428,884 in 2017 from 419,217 in 2016.

Notes: AYUSH - Ayurveda, Yoga, Naturopathy, Unani, Siddha and Homoeopathy

Source: Ministry of Health, Make in India, RNCOS, KPMG, Ayurveda Industry Market Size, Strength and Way Forward report by Confederation of Indian Industry (CII)

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 PHARMA MARKET TURNOVER TRENDING NORTH

 Indian pharmaceutical market grew 5.5 per cent in CY2017 in terms

Pharma Market Turnover (US$ Billion)
of moving annual turnover. With a turnover of Rs 1.16 trillion (US$
18.06 billion).
 In 2017, India’s pharma industry turnover reached US$ 14.97 billion 20
and US$ 3.08 billion of non-scheduled formulations and scheduled
formulations, respectively. 18
14.97
16 13.92

12.32
14

12

10

2 3.14 3.19 3.08

0
2015 2016 2017

Scheduled Formulations Non-Scheduled Formulations

Source: Department of Pharmaceuticals

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 POLICY SUPPORT AND GOVERNMENT INITIATIVES…
(1/4)

 On September 23, 2018, Government of India launched Pradhan Mantri Jan Arogya Yojana (PMJAY), to
Pradhan Mantri Jan provide health insurance worth Rs 500,000 (US$ 7,124.54) to over 100 million families every year.
Arogya Yojana  As of December 16,2018, 552,649 beneficiaries had been admitted in hospitals and the total number of claims
submitted were 421,474 which amounted to Rs 5.48 billion (US$ 75.95 billion) .

 All healthcare education and training services are exempted from service tax.

 Increase in tax holiday under section 80- IB for private healthcare providers in non metros for minimum of 50
bedded hospitals.

 250 per cent deduction for approved expenditure incurred on operating technology enables healthcare
Tax incentives services such as tele medicine , remote radiology. Artificial heart is exempted from basic custom duty of 5 per
cent.

 Income tax exemption for 15 years for domestically manufactured medical technology products.

 The benefit of section 80-IB has been extended to new hospitals with 100 beds or more that are set up in rural
areas; such hospitals are entitled to 100 per cent deduction on profits for 5 years.

 The Union Cabinet approved setting up of National Nutrition Mission (NNM) with a three year budget of Rs
85,217 crore (US$ 13.16 billion) to monitor, supervise, fix targets and guide the nutrition related interventions
across ministries.
National Nutrition  The programme is aimed at reducing the level of stunting, under-nutrition, aneamia and low birth babies.
Mission  Over 100 million people are expected to be benefited by this programme; and all states and districts will be
covered within the programme.
 In May 2018, the Government of India signed a US$ 200 million deal with the World Bank for 315 districts
across India, under National Nutrition Mission (POSHAN Abhiyaan).

Source: Aranca Research, News Articles

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 POLICY SUPPORT AND GOVERNMENT INITIATIVES …
(2/4)
 In June 2018, Government of India launched a registry with standardised, authentic and updated geo-spatial
data of all public and private healthcare called National Health Resource Repository (NHRR).

Recent Initiatives  India has bilateral relations with 53 countries in the healthcare sector, as of August 2018. This international
cooperation will encourage joint initiatives in health manpower development, training, exchange of experts,
exchange of information, capacity building, and technical support in establishing laboratories / hospitals and
research.

 An in-principle approval for a new category of over the counter (OTC) medicine has been given by the Drug
OTC medicines
Consultative Committee (DCC), Government of India, to help save patients' time and money.

 Incentives and tax holidays are being offered to hospitals and dispensaries providing health travel facilities.
Incentives in the medical Senior citizens above 80 years of age will be allowed deduction of US$ 491 towards medical expenditure if they
travel industry are not covered under health insurance.

National Health  In March 2018, the Union Cabinet of India approved the continuation of National Health Mission with a budget
Mission(NHS) of Rs 85,217 crore (US$ 13.16 billion) from 1st April 2017 to 31st March 2020.

 State Telemedicine Network (STN): The states and union territories have been provided support under the
Tele-medicine initiatives National Health Mission (NHM) under Program Implementation Plan (PIP) to create reliable, ubiquitous and
high speed network backbone.

 India's first ever 'Air Dispensary', which is based in a helicopter, will be launched in the Northeast and the
Innovation Ministry of Development of Northeast Region (DONER) has already contributed Rs 25 crore (US$ 3.82
million) for its funding.

 Drug Controller General of India (DCGI) has proposed to set up a single window system for start-ups and
Single Window System innovators seeking approvals , consents, and information regarding regulatory requirement.

Source: Aranca Research, News Articles

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 POLICY SUPPORT AND GOVERNMENT INITIATIVES …
(3/4)

 The doctor-population ratio is way ahead of 1:1,000 the prescribed ratio by World Health Organisation
(WHO) as for every 921 people in the country there is one doctor^, as of December 2018.

 Under the Union Budget 2018-19, the government has allocated Rs 452.25 crore (US$ 69.86 million) for the
Medical institutions upgradation of state government medical colleges (PG seats) at the district hospitals and Rs 794.07 crore
(US$ 122.66 million) for government medical colleges (UG seats) and government health institutions.

 During FY17-FY19 the Government of India permitted start of 86 new colleges, which included 51 in FY17,
14 in FY18 and 21 in FY19.

 Under the Union Budget 2018-19, the allocation to the Ministry of Health and Family Welfare has increased
by 11.5 per cent year-on-year to Rs 52,800 crore (US$ 8.16 billion).

 In August 2018, the Government of India approved Ayushman Bharat-National Health Protection Mission as
a centrally Sponsored Scheme contributed by both center and state government at a ratio of 60:40 for all
States, 90:10 for hilly North Eastern States and 60:40 for Union Territories with legislature. The center will
Union Budget 2018-19 contribute 100 per cent for Union Territories without legislature.

 The National Health Protection Scheme is largest government funded healthcare programme in the world,
which is expected to benefit 100 million poor families in the country by providing a cover of up to Rs 5 lakh
(US$ 7,723.2) per family per year for secondary and tertiary care hospitalisation.

 The government has allocated Rs 1,200 crore (US$ 185.36 million) towards the National Health Policy 2017
under which 150,000 health and wellness centres, will provide healthcare closer to homes of the people.

 As of January 2018, Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA), a programme launched in 2016 to
Pradhan Mantri Surakshit
ensure comprehensive and quality antenatal check-ups to pregnant women across India, has crossed the 10
Matritva Abhiyan (PMSMA) million mark.

Note: ^ - includes ayurveda, homeopathy and unani practitioners, along with allopathy doctors
Source: Union Budget 2018-19

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 POLICY SUPPORT AND GOVERNMENT INITIATIVES …
(4/4)

 In May 2018, the Government of India approved financial outlay of Rs 14,832 crores (US$ 2.30 billion) for
Pradhan Mantri FY2017-18 to FY2019-20.
Swasthya Suraksha
 In May 2018, the Government of India approved Rs 1,103 crore (US$ 170.14 million) for setting up All India
Yojana(PMSSY)
Institute of Medical Sciences (AIIMS) in Deoghar, Jharkhand.

 The Government of India launched Mission Indradhanush with the aim of improving coverage of
immunisation in the country and reach every child under two years of age and all the pregnant women who
Mission Indradhanush have not been part of the routine immunisation programme.

 Mission Indradhanush aims to achieve atleast 90 per cent immunization coverage by December 2018 which
will cover unvaccinated and partially vaccinated children in rural and urban areas of India.

 In August 2018, the Ministry of Health and Family Welfare released Rs 4 crore (US$ 5.97 lakh) to Centre for
National Resource Centre Development of Advanced Computing (C-DAC), Pune for developing National Resource Centre for EHR
for EHR Standards Standards (NRCeS) from a total estimated cost of Rs 23.59 crore (US$ 3.52 million) to enable adaptation of
notified EHR standards.

Rashtriya Swasthya Bima  The Government of India released Rs 436.66 crore (US$ 66.71 million) and Rs 675.10 crore (US$ 100.63
Yojna million) in FY16-17 and FY15-16 respectively.

 The world’s largest government funded healthcare scheme, Ayushman Bharat was launched on September
23, 2018.
Ayushman Bharat
 As of December 2018, about 3,000,000 beneficiaries had generated e-cards and 685,000 poor patients
were provided with free hospital treatment in the first 100 days since its launch.

Source: News Articles, Press Information Bureau

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 FDI INFLOWS

 100 per cent FDI is allowed under the automatic route for greenfield Cumulative FDI inflows From April 2000 Up to June 2018 into
Visakhapatnam port traffic (million tonnes)
projects. the healthcare sector (US$ billion)

 For brownfield project investments, up to 100 per cent FDI is

permitted under the government route.
1.67
 Demand growth, cost advantages and policy support have been
instrumental in attracting FDI.

 During April 2000–June 2018, FDI inflows for drugs and

5.25
pharmaceuticals sector stood at US$ 15.83 billion.

 Inflows into sectors such as hospitals and diagnostic centers and US$ 22.75 billion
medical appliances stood at US$ 5.25 billion and US$ 1.67 billion,
respectively, during the same period.

15.83

Drug and Pharmaceuticals

Hospital and Diagnostic Centers

Medical and Surgical Appliances

Note: FDI – Foreign Direct Investment, data expected to be updated by March 2019 from FDI Statistics report
Source: Department of Industrial Policy and Promotion

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 HEALTHCARE

OPPORTUNITIES
 OPPORTUNITIES IN HEALTHCARE

 Additional three million beds needed for India to achieve the target of 3 beds per 1,000 people
by 2025.

 Additional 1.54 million doctors and 2.4 million nurses required to meet the growing demand for healthcare;
Healthcare Infrastructure 58,000 job opportunities are expected to be generated in the healthcare sector by the year 2025.

 Over US$ 200 billion is expected to be spent on medical infrastructure by 2024.

 Over the years, India has made strategic interventions in National Health Mission and the national disease
control programmes to ensure quality and affordable healthcare for all.

 Contract research is a fast growing segment in the Indian healthcare industry.

 Cost of developing new drugs is as low as 60 per cent of the testing cost in the US.
Research
 The number of clinical trials approved by the Drug Controller General of India (DCGI) recorded a 400 per
cent increase to 97 in 2017 from 17 in 2013.

 The market size of medical tourism market amounted to Rs 195 billion (US$ 3 billion) in 2017. In 2018-19 the
medical tourism market is expected to double due to the easier norms for medical visa approvals. The value
of medical tourism is forecasted to reach US$ 9 billion by 2020.
Medical Tourism
 Cost of surgery in India is nearly one-tenth of the cost in developed countries.

 There are 21 Joint Commission International (JCI) - accredited hospitals in India and growing.

 The medical devices market size, valued at US$ 4.9 billion in 2017, is expected to reach US$ 11 billion by
Medical devices
2022, backed by rising geriatric population, growth in medical tourism and declining cost of medical services.

Source: Aranca Research, News articles

27 Healthcare For updated information, please visit www.ibef.org

 OPPORTUNITIES IN HEALTH INSURANCE

 As of 2017, less than 27 per cent of the Indian population is covered Health Insurance Premium Collection (US$ Billion)
through health insurance.
7.00 ^CAGR: 21.36%
 Increasing healthcare cost and burden of new diseases along with
low government funding is raising demand for health insurance
coverage.
6.00
 Many companies offer health insurance coverage to employees, 5.88
driving market penetration of insurance players.
5.00
 With increasing demand for affordable and quality healthcare,
penetration of health insurance is poised to grow exponentially in the 4.78
coming years.
4.00
4.08
 In FY18, Gross Direct Premiums at Rs 378.97 billion (US$ 5.88 3.87
billion) in FY18, the health segment has a 25.20 per cent share in 3.60
gross direct premiums earned in the country. 3.00
 With Gross Direct Premiums at Rs 278.96 billion (US$ 3.87 billion) 2.85 2.90
2.79
the health segment has a 25.66 per cent share in the gross direct 2.42
premiums earned in the country between April-November 2.00

2018(provisional).

1.00

0.00
FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19*
Note: * - provisional between April-November 2018, ^CAGR till FY18
Source: GIC

28 Healthcare For updated information, please visit www.ibef.org

 HEALTHCARE

KEY INDUSTRY
ORGANISATIONS
 INDUSTRY ORGANISATIONS

The Federation of Obstetric and Gynaecological Societies of

Indian Medical Association
India

I.M.A. House Model Residency, 605,

Indraprastha Marg, Bapurao Jagtap Marg,
New Delhi – 110 002, India Jacob Circle, Mahalaxmi East,
Telephone: 91 11 2337 0009, 2337 8819 Mumbai – 400 011, India
Fax: 91 11 2337 9470, 2337 9178 Fax: 23021383
Website: www.ima-india.org Website: www.fogsi.org
E-mail: [email protected] E-mail: [email protected]

30 Healthcare For updated information, please visit www.ibef.org

 HEALTHCARE

USEFUL
INFORMATION
 GLOSSARY

 CAGR: Compound Annual Growth Rate

 EPA: Externally Aided Projects

 FDI: Foreign Direct Investment

 FY: Indian Financial Year (April to March)

 So FY10 implies April 2009 to March 2010

 GOI: Government of India

 ICT: Information and Communications Technology

 IMF: International Monetary Fund

 INR: Indian Rupee

 MandA: Mergers and Acquisitions

 NHRM: National Rural Health Mission

 PPP: Public Private Partnerships

 RandD: Research and Development

 US$: US dollar

 WHO: World Health Statistics

 Where applicable, numbers have been rounded off to the nearest whole number

32 Healthcare For updated information, please visit www.ibef.org

 EXCHANGE RATES

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year INR Equivalent of one US$ Year INR Equivalent of one US$
2004–05 44.95
2005 44.11
2005–06 44.28
2006 45.33
2006–07 45.29
2007–08 40.24 2007 41.29

2008–09 45.91 2008 43.42

2009–10 47.42
2009 48.35
2010–11 45.58
2011–12 47.95 2010 45.74

2012–13 54.45 2011 46.67

2013–14 60.50
2012 53.49
2014-15 61.15
2013 58.63
2015-16 65.46
2016-17 67.09 2014 61.03
2017-18 64.45 2015 64.15
Q1 2018-19 67.04
2016 67.21
Q2 2018-19 70.18
Q3 2018-19 72.15 2017 65.12

Source: Reserve Bank of India, Average for the year

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 DISCLAIMER

India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation
with IBEF.

All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced,
wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or
incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval
of IBEF.

This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the
information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a
substitute for professional advice.

Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do
they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.

Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any
reliance placed or guidance taken from any portion of this presentation.

34 Healthcare For updated information, please visit www.ibef.org