Indian Healthcare Industry: A Promising Bet For Investor

India’s healthcare industry is rapidly growing. Analysing the trends of growth in living standards and economic status of the citizens, one can easily deduce that this growth is here to stay.

One of the largest healthcare industries in the world, India’s healthcare industry grew at around 22 per cent CAGR every year since 2016. The country is seeing a healthcare revolution that is rapidly spreading beyond the big cities. New technologies, new players and new investments are rapidly coming to the sector every day. The sector is being seen as a sunrise sector and the investors are seeing it as the sector for the near future. The government of India expects the sector to grow to approximately 372 billion USD in 2022 from 194 billion USD in 2020. This phenomenal growth rate is being powered by enthusiastic investors and attracting more investors to the sector. Let’s decipher why this sector has seen such exceptional growth and what is making the investors so positive about it.

Rise of disposable income and demand for healthcare: The Indian middle class has been on a constant rise. As the living standards of people rise, their demand for better facilities also rises. The healthcare market of the country has largely benefitted and will continue to see fast-paced growth because of this rise.

Low penetration of healthcare services: Although India’s big cities have excellent healthcare infrastructure and facilities both from the government and the private players, things are not the same as we move to smaller towns and villages. There is a huge untapped potential for healthcare services in Tier 2 and Tier 3 cities as well as the rural areas in the country. Investment in healthcare in these cities provides a quick and healthy return on investment.

Huge medical tourism industry: The medical tourism industry in India is around USD 9 billion. People across the globe travel to India for world-class and comparatively affordable medical services. This industry has also shown impressive growth over the years and has caught the attention of investors.

Government initiatives: The government of India has been continuously taking revolutionary steps to make quality healthcare accessible and affordable for every Indian. To realise its goal, the government has been partnering with various private parties and incentivising the investors to invest in the smaller towns and rural areas.

The advent of new technologies: New technologies are arriving in healthcare every day. These technologies are not only making healthcare more effective and affordable but also opening up new avenues for investments. Digital health, telemedicine, application of AI, ML, AR etc, robotics and several other new fields have emerged in recent years. The success and acceptance of these technologies have pumped positive sentiments into the investors and they want to ride the wave of success as it grows bigger.

The burden of new diseases: Unfortunately, various new diseases have raised their heads in recent years. Besides COVID-19, India has seen cases of Nipah Virus and Zika virus among others. COVID-19 has shown the world the vulnerability of the current health care services. The government of India is partnering with private players for preparedness against any future COVID-19 like situation. It is incentivising the investors to invest in technologies and facilities for the prevention of any future catastrophe like COVID-19. Many investors are seeing this as an opportunity to partner with the government and widen their portfolio, while others are showing interest to take advantage of the government incentives. This is the silver lining in the cloud for the investors.

India’s healthcare industry is rapidly growing. Analysing the trends of growth in living standards and economic status of the citizens, one can easily deduce that this growth is here to stay. This growth coupled with the favourable investment climate created by the government has been driving the sentiments of the investor in the healthcare sector in India. The growth of the sector and the bullishness of the investors are powering each other and generating great synergies for the Indian healthcare system.

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