Outlining the wide array of investment opportunities in India’s healthcare sector, Niti Aayog has said investors should take advantage of the conducive environment to participate in the country’s healthcare industry, which is expected to rise to $372 billion by 2022.
The healthcare industry has been growing at a compound annual growth rate (CAGR) of around 22% since 2016. Healthcare has become one of the largest sectors of the Indian economy, in terms of both revenue and employment. In 2015, the sector became the fifth-largest employer, engaging 47 lakh people directly. According to estimates by the National Skill Development Corporation (NSDC), healthcare can generate 27 lakh additional jobs in India between 2017 and 22 — over 500,000 new jobs per year.
“The current market size for pharmaceuticals in India is $41 billion, which is expected to reach $130 billion by 2030. India’s biotechnology market is expected to grow at an average growth rate of around 30% per year to reach $100 billion by 2025,” according to a Niti Aayog report.
With respect to pharmaceuticals, India has the opportunity to boost domestic manufacturing, supported by recent government schemes with performance-linked incentives, as part of the Aatmanirbhar Bharat initiative. Further, between 2018 and 2024, patents worth $251 billion are expected to expire globally, presenting a lucrative opportunity for the country’s pharmaceutical sector.
In the hospital segment, the expansion of private players to Tier-II and Tier- III cities offers an attractive investment opportunity. According to Invest India’s Investment Grid, there are nearly 600 investment opportunities worth $32 billion (Rs 2.3 lakh crore) in the country’s hospital/medical infrastructure sub-sector.
The hospital industry is witnessing a huge demand from both global and domestic investors. The government’s plans to increase budgetary allocation for public health spending to 2.5% of the country’s GDP by 2025 will benefit the hospital sector as well. There is a tremendous demand for tertiary care hospitals and specialty hospitals, in particular. Currently, a considerable gap exists between the number of beds available and the number of beds required. India’s hospital bed density is less than half the global average of three hospital beds per 1,000 people — implying that an estimated 2.2 million beds will be required over the next 15 years.
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