Arpan Gupta, IDC (India)

The Indian economy, buoyed by the growth in GDP exceeding 8% year on year since 2003--04 has entered the phase of “India 8.0.” To the accord, the Indian healthcare sector-estimated to be US$ 34,000 million in 2007-is estimated to grow at a CAGR of 19.0% for 2007--12 to be US$ 81,000 million by 2012. The sector's growth would be primarily driven by the country's growing middle class, which can afford quality healthcare.

In India, more than 50% of the total health expenditure comes from individuals as against a state level contribution of 30%. The govt funds allocated to the healthcare sector have always been low in relation to the population of the country. Thus the opportunities presented by the healthcare sector have made it a major draw for potential investors. The healthcare sector attracted US$ 379 million in 2006. With private healthcare driving a large chunk of healthcare services in India, the stage is set for private healthcare players to take-off from their current positioning and offerings. Of late, India is becoming a preferred healthcare destination for neighboring countries and the West due to low cost and high-quality of treatment available giving rise to opportunity for medical tourism. The no. of patients visiting India for medical treatment has risen from 10,000 in 2000 to about 100,000 in 2005. India is already inching closer to attract 150,000 medical tourists a year. Medical tourism, currently pegged at US$ 350 million, has the potential to grow into a US$ 2,000 million industry by 2012. However, it is not only the cost advantage that keeps the sector ticking. It has a high success rate and a growing credibility

Indian specialists have performed over 500,000 major surgeries and over a million other surgical procedures including cardio-thoracic, neurological and cancer surgeries, with success rates at par with international standards.

India's success in 110 bone marrow transplants is more than 80%

The success rate in 6,000 renal transplants is 95%

NHS of the UK has indicated that India is a favored destination for surgeries

Also, with less than 10% of the population having some form of health insurance, the potential market for health insurance is huge. Indian health insurance business is fast growing at 50% and is projected to grow to US$ 5,750 million by 2010. The IRDA has eliminated tariffs on general insurance from Jan 1, 2007, a move driving the additional growth of private insurance products in the Indian healthcare arena. With the potential of the healthcare sector being so positive, ancillary industries such as healthcare equipment and IT in healthcare are also witnessing a spurt. The soaring growth projections have prompted foreign medical equipment makers to float Indian subsidiaries, 30 of them received import clearances in 2007 alone. Investments into the medical and surgical instruments segment amounted to US$ 115.29 million over the period August 1991 to April 2007. The same is projected to grow at 15--20% and reach around US$ 5,000 million by 2012.

Riding on rapid technology adoption by domestic players, coupled with an impressive showing by the foreign players foraying into Indian healthcare, the IT adoption in healthcare is all set to reach new heights. It is estimated to grow at a CAGR of 20.1% for 2007--12, from the current level of US$ 313 millions. The growth is primarily being driven by software market growing at a CAGR of 35.8% for 2007--12 followed by services market with a CAGR of 29.3% for the same period.