Healthcare Resource Guide: India

 

India Statistics

Summary
Market Entry

Current Market Trends

Market Research

Current Demand

Barriers
Registration Process

Trade Events

Web Resources

CS Contact

Capital: New Delhi

Population: 1.25 billion
GDP*:
USD 7.996 trillion (PPP)
Currency:
Indian National Rupee (INR)
Language
: Hindi, English

Summary

The Indian healthcare sector is experiencing a rapid change. Though this change has been under way for many years it has become significantly visible in the last decade, with a renewed thrust from both the government and a growing market for healthcare services and products. Rapid economic growth, rising middle class incomes and a surge in lifestyle diseases have created a booming life science market. According to the World Health Organization (WHO), Indian per capita health spending stands at just $132 (on a PPP-adjusted basis), ranking 145th amongst WHO nations and less than 2% of the $8,632 spent in the United States. India’s annual healthcare expenditure stands at just $77 billion, against $300 billion in China, despite the fact that India is expected to surpass China as the most populous nation in the next 20 years.

The Indian Healthcare industry which comprises hospitals, medical infrastructure, medical devices, clinical trials, outsourcing, telemedicine, health insurance and medical equipment is amounted to $96 billion in 2013 and expected to reach US$ 280 billion by 2020, due to increase demand for specialized and quality healthcare facilities. The market is dominated by private players. The industry is rapidly developing and is being fueled by large investments from existing corporate hospital chains and new entrants backed by private equity investors. This growth will be driven by healthcare facilities, private-public projects, medical diagnostic and pathological laboratories, and the health insurance sector. In addition, changing demographics, disease profiles and the shift from chronic to lifestyle diseases in the country has led to increased spending on healthcare delivery.

Market Entry

In India, healthcare is delivered through both the public sector and private sector. The private sector’s contribution to healthcare has been growing at a faster pace than government. There are no restrictions on foreign direct investment in healthcare services. Import of medical equipment is allowed under the “Open General” category of the Import regulations, except for nuclear medicine. Customs duty levied on imported products depends on the product classification, for some devices the duty has been brought down from 25 to 5 percent. Products classified as “life saving equipment” have reduced duty applicable on them to encourage hospitals to import latest equipment.

Price, quality and after-sales service support are major factors in medical equipment purchase decisions. Letter of credit is usual the mode of payment for imports. Purchase decision in government follow a tendering process and is time consuming, while it is faster in the private hospitals.


Current Market Trends

Indian population of over one billion people is growing at a rate of 1.6 percent per year. An aging population of over 100 million, with rising incidence of lifestyle diseases, which combined with rising incomes and increased penetration of health insurance are fueling growth of the industry. Considerable challenges exist in terms of service accessibility and patient care quality. As such Government support would inherently play a significant role in the overall development and growth of the sector.

High upfront investments, long gestation periods, and rising real estate costs are compelling private players to innovate with business models and expand into under penetrated tier II & III cities. As a result, these private players can capitalize on the opportunity to expand. The private sector is likely to contribute 80-85 percent of the USD 86 billion healthcare investment required till 2025.

The Indian medical device market is worth an estimated $3.2 billion (without the inclusion of the rural market potential) and expected to reach $5 billion by 2016. The medical device industry is a very attractive export sector for U.S. firms, which account for one quarter of exports to India. India imports nearly 80 percent of its medical devices and barriers to entry are low compared to other industries, despite a 4 percent additive import tax placed on most categories of devices in 2007. India remains highly dependent on imports for many types of medical devices, particularly higher end products that include cancer diagnostics, medical imaging, ultrasonic scans, PCR technologies. Imports are growing rapidly as world-class hospital groups such as Fortis and Apollo build high-end infrastructure and open India to medical tourism, which now adds $2 billion to the Indian healthcare market.

Health insurance is gaining high momentum in India. Currently 15 percent of the population is covered by government health insurance companies and 2 percent by private health insurance. For the purpose of regulation, health insurance companies are classified as non-life companies. General Insurance companies are called as Non-Life companies in India. This penetration of health insurance will significantly increase the affordability of healthcare services for the population. Several private insurance companies have entered the market and have empanelled hospitals to provide cashless treatment to subscribers of insurance companies.

In India, healthcare is provided through primary, secondary and tertiary care hospitals. The first two categories are fully managed by the government. While the tertiary care hospitals are owned and managed by either government or private sector, the private sector’s contribution to healthcare has been growing at a faster pace than government. The medical infrastructure market is estimated to have a growth rate of 15 percent. Both the government and private sector are planning several new specialty and super-specialty hospital facilities, modernization of existing hospitals. India currently faces a chronic shortage of healthcare infrastructure, especially in rural areas and Tier II and Tier III cities, and it is expected that India will have potential requirement of 1.75 million new beds by the end of 2025. The opportunity also exists for overseas organizations to set up hospitals in India through the Foreign Direct Investments. The hospital services market, which represents one of the most important segments of the Indian healthcare industry, is expected to be worth $80 billion by 2015.

The new specialty and super-specialty hospital facilities depend on the import of high-end medical equipment, accounting for over 65 percent of the entire market. There is a need for sophisticated hospital equipment, especially operation theatre products and training through simulation labs. In view of the relatively low customs duty rates (9.2 – 15 percent) combined with an increasing number of healthcare centers specializing in advance surgery, India offers opportunities for the direct supply of high-technology, specialized medical equipment, products and systems.

Biotech is one of the fastest growing segments of the life sciences sector. The market currently stands at $3.2 billion and is growing over 20 percent per year. If the current trends continue, the biotech market could reach $8 billion by 2015. The biotech sector represents a diverse opportunity for international firms.

The boom in medical tourism in the Indian healthcare sector is encouraging hospitals and hoteliers to strike alliances with each other. Presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical tourism. According to the industry estimates, Medical tourism market is expected to expand at a CAGR of 27% to reach USD3.9 billion in 2014 from USD1.9 billion in 2011.

E-healthcare/Telemedicine, though in its infancy in India, is beginning to take root. Most public hospitals (funded by State governments) and private single and multi-super specialty hospitals have gone in for customized Hospital Management Systems and other medical based IT products. Given the poor availability of quality healthcare facilities outside the large and second tier cities, telemedicine is expected to become viable business proposition. Several major private players like Apollo, AIIMS, and Narayan Hrudalaya have adopted telemedicine services. With increased private participation, the healthcare sector has also witnessed rise in FDI inflows. The Government of India (GOI) has permitted 100% FDI for all health-related services under automatic route.


Available Market Research

The large private healthcare services providers are actively seeking growth by enhancing their reach across the country through the building new hospitals and acquiring and upgrading existing hospitals. There are several groups operating hospital chains including Apollo Group, Fortis Healthcare, Manipal Group, Max Healthcare, Medanta-Medicity, and Wockhardt Hospitals. In the medical equipment segment competition is from the imports from European companies and Japan. India being a price sensitive market there is competition from low priced Chinese products.


Current Demand and Opportunities

The growing demand for quality healthcare and the absence of matching delivery mechanisms pose a challenge and certainly a great opportunity. In Infrastructure – building, equipping, managing and financing the super specialty hospitals in India through the FDI route is another area for future growth. Some best sales prospects in the medical equipment market include medical and surgical instruments, medical imaging, electro medical equipment, orthopedic and prosthetic appliances, cancer diagnostic, orthodontic and dental implants equipment, ophthalmic instruments and appliances, Point of Care Testing (POCT) diagnostic devices.

A proper supply of equipment and medical consumables will also be an area with significant for American companies. Several leading U.S. purveyors of hospital equipment and supplies have opened Indian operations to cater to this growing market.

Health insurance and hospital administration is another area in which U.S. companies can make a difference. This opportunity includes introducing and maintaining industry standards, and also classifying and certifying healthcare centers.

Other growth areas include diagnostic kits, reagents, hand-held equipment and stimulation for operation rooms. Imports constitute 50 percent of this market. Hand-held/portable diagnostic equipment (e.g. for blood sugar, blood pressure testing etc) is also a fast growing segment since India has around 46 million diabetics, which is expected to swell to 70 million by 2025.

Unit: USD millions

Medical Devices & Equipment

2013

2014

2015

(estimated)

Total Market Size

5812

6509

6942

Total Local Production

2767

2800

3619

Total Exports

91

151

148

Total Imports

3136

3860

3471

Imports from the U.S.

509

522

509

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources: Statistical data are unofficial estimates from trade sources and industry. As this industry has not been well documented in the Indian context, the estimates of industry size vary significantly across different sources. (The 2015 figures have been re-stated @ 1 USD/ INR63)

Imports from the U.S.: United States Census Bureau

Barriers

To ensure quality healthcare in October 2005, the Government of India (GOI) increased the list of medical devices covered under the Drugs and Cosmetics Act of 1940, bringing fourteen categories of implantable devices under regulatory control. These include hypodermic syringes and needles, cardiac stents, drug eluting stents, heart valves, catheters, intra-ocular lenses, hip and knee implants and bone cements, I.V. Cannulae, scalp vein set, in- vitro diagnostic devices. An improved central licensing authority must license these devices for manufacture, sale or distribution. Hospitals are also seeking quality accreditations like JCI, NABH and ISO.


Registration Process

The Central Drugs Standard Control Organization (CDSCO) is the key regulatory organization in India. Import of medical devices into India still remains largely unregulated though the Indian government has adopted some measures in recent years to change that. With the final procedures and guidelines not being laid down as yet, things are actually pretty confusing at this stage. Currently, Ministry of Health and Family Welfare, Government of India has notified only 14 devices that are regulated. Attached web link provides the list of the 14 regulated medical devices:

http://cdsco.nic.in/Medical_div/list%20of%20notified%20medical%20device.0001.pdf

Please review the web link http://www.cdsco.nic.in/forms/list.aspx?lid=1580&Id=1 for more information on import regulations and registration process for medical devices and diagnostic equipment.

The CDSCO drug controller contact information is provided below. Please write to CDSCO office for detailed information on medical device import regulations and registration requirements.

Dr. G.N. Singh– Drug Controller General India

Central Drug Standard Control Organization (CDSCO)

Ministry of Health & Family Welfare

FDA Bhavan, New Delhi - 110002

Phone: +91-11-2323 6965

Email: dci@nb.nic.in;

Website: www.cdsco.nic.in


Trade Events

Medical Fair India

March 11-13, 2016

Mumbai

This event will advance the goals of India Commercial Engagement Strategy (ICES) in the medical/healthcare sector. Companies will also have an option to participate in the U.S. pavilion at the Medical Fair India 2016.

http://www.mdna.com/trade-shows/details/medfairindia

Medicall 2016

Dates TBC

Chennai

This event will advance the goals of India Commercial Engagement Strategy (ICES) in the medical/healthcare sector. Companies will also have an option to participate in the U.S. pavilion at the Medicall 2016.

http://medicall.in/medicall/index.php

Web Resources

Ministry of Health and Family Welfare (MOHFW)

http://mohfw.nic.in/

Indian Medical Association

http://www.ima-india.org

The Medical Council of India (MCI)

http://mciindia.org

Medical Pharma Healthcare Tenders in India

http://www.medicaltenders.com/medical_tenders_india.htm

Health IT in India

http://hitconsultant.net/2014/11/11/health-it-in-india-providers-expected-to-spend-1-1b-in-2014/

http://www.forbes.com/sites/greatspeculations/2015/06/09/u-s-health-care-companies-enjoy-big-opening-in-india/


U.S. Commercial Service Contact Information

Name: Ruma Chatterjee
Position:
Commercial Specialist
Email:
ruma.chatterjee@trade.gov
Phone
: +91-22-26724136

Name: Camille Richardson
Position:
Senior Commercial Specialist
Email:
camille.richardson@trade.gov
Phone
: +91-22-26724215


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