Healthcare has become one of the largest sectors in the Indian economy

income and employment. It has grown at a compound annual growth rate of 22% since 2016, employing 47,000 people. The industry has the potential to create 2.7 million additional jobs in the U.S.

India in 2017-22 - more than 500,000 new jobs per year.

Several factors are driving the growth of the healthcare industry in India, including an aging population, growing middle class, rising rates of lifestyle diseases, increased emphasis on public-private partnerships, and accelerated adoption of digital technologies. Including telemedicine, in addition to heightened investor interest and increased FDI inflows

over the past two decades. The Indian government has undertaken deep structural and ongoing reforms to strengthen the healthcare sector and announced favorable policies to encourage foreign direct investment.

Aatmanirbhar Bharat Abhiyaan package includes several short-term and long-term plans

Health system measures, including the Production-Linked Incentive (PLI) scheme to promote domestic production of medicines and medical devices.

The COVID-19 pandemic has not only brought challenges but also some opportunities for the development of India. The crisis has opened the floodgates for Indian start-ups, many of which have sprung up to speed up the development of low-cost, scalable, and fast solutions.

Additionally, the pandemic is boosting the telemedicine and home healthcare market in the country. All these factors combined make India's healthcare sector ripe for investment. Segmentation, with private players expanding into Tier 2 and Tier 3 locations beyond metropolitan areas

The city offers an attractive investment opportunity.

India's medical device industry, with relatively low barriers to entry, is a booming industry expected to reach $50 billion by 2025. Four categories (A, B, C, and D) of medical devices are manufactured in India as per the Global Harmonization Working Group rules.

Manufacturing of high-end medical devices (Class C and D) is dominated by multinational companies with extensive service networks in India. This high-end market is more than 90% dependent on imports and offers ample investment opportunities. On the other hand, Class A and Class B, which are relatively backward in technology, are mainly produced by domestic manufacturers. Most of these Indian manufacturers are micro, small and medium enterprises (MSMEs) with an average turnover of $45-500 million.

As a net importer of medical equipment, India is particularly dependent on importing high-tech medical products such as cancer diagnostics, medical imaging tools, ultrasound scans and PCR technology. The main challenge facing the Indian medical device industry remains the high cost of local manufacturing relative to competing economies due to lack of adequate infrastructure, inadequate domestic supply chain and logistics, high financing costs, shortage of quality human capital, limited design capabilities, and Gaps in research and development (R&D).

With huge demand and rather tight supply, the medical devices market presents great investment opportunities for investors. India allows 100% FDI in the medical device sector through the automatic route. The diagnostics market in India is expected to grow at a CAGR of 20.4% to reach USD 32 billion by 2022, a considerable increase from the valuation of USD 4 billion in 2019. The organized sector has a share of approximately 25% in the field of diagnostics (15% in laboratories and 10% in radiology).

Although the segment is currently largely fragmented, large investors are building a hub-and-spoke structure, thereby consolidating the industry. In addition, the new Clinical Establishment (Central Government) Rules in 2019 will also bring standardization and better quality. Over the next few years, this segment is expected to witness growth, presenting significant opportunities for investors.

In addition, new concepts of micro-diagnostics are gaining popularity. With advances in technology, many diseases can now be diagnosed more cheaply with the help of small handheld devices or smartphone attachments. The capabilities of such devices have grown exponentially, as has their potential to diagnose a large number of diseases at once and at low cost.

Medical Internship

Medical tourism is rapidly growing as an attractive segment of the Indian healthcare industry. India's medical tourism industry was worth about $9 billion in 2020, before the pandemic hit, and is expected to grow to $13 billion by 2022. In fact, in 2017, India ranked seventh among the top 20 wellness travel markets globally and top ten wellness travel markets in the Asia-Pacific region. The number of Foreign Tourists (FTAs) arriving in India on medical visas increased from 184,298 in 2014 to an estimated 697,000 in 2019.

Major contributing factors include the presence of world-class hospitals and skilled medical professionals, quality healthcare, low cost of treatment compared to other countries, credibility of alternative medicine systems, and global appreciation for wellness services such as yoga and meditation Increase in demand.

India has around 37 Joint Commission International (JCI) accredited hospitals and 513 National Board of Hospitals and Healthcare Providers (NABH) accredited hospitals.

India's healthcare ecosystem is one of the fastest growing industries, benefiting from government policies that have made the country a global health hub. Due to the relaxation of foreign direct investment policies in various segments such as hospitals, medical equipment, and health insurance, there is huge room for foreign investment in this field.

India's healthcare market has been expanding at a compound annual growth rate (CAGR) of 22%, driven by factors such as demographics, growing middle class, rising incomes, rising health awareness and rising lifestyle diseases promotion. According to INC42, the Indian healthcare market was valued at $86 billion in 2016 and is currently projected to reach $367 billion by 2023 and $638 billion by 2025. That estimate will reach $372 billion by 2022, up from $160 billion in 2016, according to Statista.

Improving healthcare coverage, services, and increasing spending by both public and private players have fueled the rapid growth of the industry. Indeed, in the wake of the Covid-19 pandemic, calls for self-reliance in the Indian healthcare system are growing, with focus shifting to innovation and research, pharmaceutical and device manufacturing, digital transformation of healthcare delivery, equitable access to healthcare solutions, mental health and healthcare.

An Overview of the Indian Healthcare Ecosystem

India's healthcare industry is one of the major contributors to the Indian economy in terms of income and employment. The industry has grown rapidly over the past five years due to digitization, innovation and new hybrid business models and the consolidation of traditional and technological players.

Additionally, the Covid-19 pandemic has prompted long-term behavioral shifts in personal health and hygiene, health insurance, fitness and nutrition, and health monitoring and screening. The pandemic has also boosted the adoption of digital technologies, including telemedicine.

Moreover, rising incidence of lifestyle diseases in urban areas due to rise in high cholesterol, high blood pressure, obesity, poor diet is also driving the demand for skilled nursing services.

An important part of the Indian healthcare industry

India's healthcare industry includes hospital infrastructure, medical devices and equipment, health insurance, clinical trials, telemedicine, and medical tourism. These segments are expected to diversify as the population ages and the growing middle class increasingly favors preventive healthcare.

The current market size of the Indian medical device industry is estimated at USD 11 billion. India is the fastest growing medical device market among emerging markets

India's medical device industry consists of large multinational corporations and unprecedented growth of small and medium enterprises (SMEs)

The medical device industry is projected to grow at a CAGR of 15%, 2.5 times the global growth rate

India's medical device industry is expected to witness significant growth and is expected to reach a market size of USD 50 billion by 2030

For brownfield and greenfield settings, the automatic path allows 100% FDI. Strong FDI inflows reflect global players' confidence in Indian market

Over the past 5 years, the Indian government has taken several steps to ensure the prosperity of the medical device manufacturing ecosystem in India:

Medical Device Rules (MDR) 2017: The Medical Device Rules (MDR) 2017 regulate the clinical investigation, manufacture, importation, sale and distribution of medical devices. These devices are classified into Class 4 and comply with international guidelines

Production Linked Incentive Scheme: To boost domestic manufacturing, the government has launched a Production Linked Incentive Scheme (PLI 1.0 and PLI 2.0) for 4 key target areas and in vitro diagnostic medical devices

Medical device park promotion plan: The Indian government approved the establishment of 4 medical device parks to provide common infrastructure, create a strong medical device manufacturing ecosystem, and significantly reduce manufacturing costs

Public Procurement Order (PPO): Pharmaceutical Ministry to issue Public Procurement Order (PPO) in March 2021 to include 19 devices in revised guidelines to enhance Indian manufacturing

At the same time, in order to accelerate the national medical device development plan, in April 2021, the Indian government invested 230 million US dollars and signed a 10-year contract with the Indian Medical Device Industry Association and the German advanced medical device company Fresenius. This plan is called【 United Medical Development].