| The Indian healthcare industry is projected to grow 23 per cent to reach US$ 77 billion by 2012—with healthcare facilities accounting for US$ 6.7 billion—doubling from the current estimated size of US$ 35 billion, according to a Yes Bank and an industry body report. Similar to the above predictions, the Investment Commission of India also stated that the sector is expected to grow by 15 per cent per annum to reach US$ 79 billion by 2012. |
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| SECTOR FACTS |
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| According to the Department of Industrial Policy and Promotion (DIPP), |
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FDI inflow in hospital and diagnostic centres was US$ 786.14 million during April 2000 and April 2010 |
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FDI inflow in medical and surgical appliances stood at US$ 351.05 million during the same period |
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| Investment Opportunities |
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| According to a report by PriceWaterhouseCoopers, an estimated 189 million people in the country will be more than 60 years of age by 2025, needing higher healthcare spends. |
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| A combined study by an industry body and Ernst & Young suggests that India will need as many as 1.75 million additional beds by the end of 2025. Further, an investment of US$ 86 billion is required to achieve 1 doctor, 2 beds and 2.3 nurses per 1000 population by 2025. |
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| As per a recent CII-McKinsey report, the growth of the healthcare sector can contribute 6 to 7 per cent of gross domestic product (GDP) and increase employment by at least 2.5 million by 2012. McKinsey-CII report also estimates the number of potential insurable lives at 315 million with a potential of US$ 7.7 billion in health insurance premium by 2015. |
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| Medical tourism in India has also received a boost with the arrival of patients from countries with advanced medical systems. This underlines the fact that India has good infrastructure and talent. |
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| According to a report from McKinsey and CII, medical tourism in India will grow to US$ 2 billion by 2012. As per the report, medical tourism market is valued to be worth over US$ 310 million with 100,000 foreign patients coming in every year. |
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| Hospital trade is a growing business opportunity for other sectors such as food retail as some large hospitals are getting almost 1,000-1,500 outpatients per day and visitors for inpatients who are also potential customers. Food retail has about 15 per cent of its business coming from hospitals. Au Bon Pain has one outlet at Cradle, a maternity hospital in Bengaluru, and is likely to set up four more in one year through this format. The US-based bakery chain is now looking at West Asia and India as potential growth markets for this format. |
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| The rural healthcare sector is also witnessing considerable growth, with the sector adding around 15,000 health sub-centres and employing 28,000 nurses and midwives during the last five years, as per the Rural Health Survey Report 2009 of the Ministry of Health. As per the report, the primary health centres in the country has reached 20,107, growing by 84 per cent. |
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| The Andhra Pradesh government has successfully implemented the US$ 59.68 million Health Management Project funded by the Department for International Development (DFID) of the UK. Other states as well are considering implementing similar models. |
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| With 3G there are possibilities of remote treatment and diagnosis of patients through mobile phones. Also, with the number of cell phone users currently at 600 million and rapidly increasing by 20 million every month, some telecom operators and value-added service developers such as Nokia and BlackBerry are considering usage of mobile phones for diagnostic and treatment support, remote disease monitoring, health awareness and communication. Narayana Hrudalaya is currently investing heavily into telemedicine. |
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| One national and eight regional institutes of paramedical sciences will be established across the country along with the redevelopment of the existing Regional Institute of Paramedical and Nursing Sciences (RIPANS) in Aizawl. For the establishment of one National Institute of Paramedical Sciences, the total cost proposed is US$ 23.36 million and amount required for regional institutes will be US$ 150.17 million. |
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| Investment Policy Updates |
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| Government initiatives in the public health sector have recorded some noteworthy successes over time with focus on investments related to better medical infrastructure, rural health facilities etc. |
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100 per cent FDI is permitted for health and medical services under the automatic route |
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| Source: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP) |
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 PPP (Public Private Partnership) must be seen in the context of viewing the medical sector as a national asset with health promotion as a goal for all health providers, private or public. |
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Ghulam Nabi Azad
Union Minister for Health and Family Welfare |
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| WHAT'S NEW |
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| Private equity firm (PE) Warburg Pincus has planned to invest US$ 85 million in diagnostic-laboratories chain Metropolis Healthcare Ltd. |
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| Sahara Group is planning to set up several multi-speciality hospitals and 217 secondary care hospitals at Sahara City Home townships, of which nine will come up at Ahmedabad, Aurangabad, Coimbatore, Indore, Gwalior, Jaipur, Lucknow, Nagpur and Solapur with an investment of about US$ 641.7 million-US$ 855.6 million. |
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| At the recent global investors meet, the Karnataka state government signed a memorandum of understanding (MOU) with a city developer Ozonegroup to promote the State's first private sector pharma SEZ in Bengaluru with the project cost estimated at US$ 434.25 million, of which the company plans to invest about US$ 130.27 million. |
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| Reliance Foundation headed by Mukesh Ambani is planning to set up a world-class hospital facility in India at Sir Hurkisondas Nurrotumdas Hospital (HNH). |
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| Anil Dhirubhai Ambani Group is setting up the Kokilaben Dhirubhai Ambani Hospital and Research Institute in Mumbai, a 750-bed tertiary care hospital with one of the largest healthcare infrastructure facilities in the country. |
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| PARTICIPANTS IN VALUE CHAIN |
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| Fortis |
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| Columbia Asia |
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| Indraprastha Apollo |
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| Apollo Hospitals |
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| Narayana Hrudalaya |
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