In the past few years, the Healthcare Industry has made significant progress. Currently pegged at around $158 billion and projected to grow at a CAGR of 29%, the industry is expected to reach $280 billion by 2020. An increasing awareness for quality, more and forward-looking opportunities in medical technology and larger increase in inflow of international medical tourists will further boost the Indian Healthcare Industry in the future.
The Indian healthcare IT market is valued at $1 billion and projected to increase 1.5 times by 2020. The wide deployment of technology in healthcare will be unavoidable as the Industry is still facing several challenges such as unequal access, poor quality and rising costs. To reduce these challenges, the market trend is clear: India is forging ahead to the use of technology innovations such as mobile health devices, technology integration with healthcare data and telemedicine strategies. Multinational companies like Philips, Siemens and GE are focusing on Healthcare Technology in India with the use of big data for better symptoms diagnosis and problem prediction. By 2050, the market will be dominated by implants and sensors that track all the vital signs and health issues in every detail. This will not only result in the disappearance and cure of life threatening diseases, but might also raise the average life expectancy to 80+. With remarkable room for innovation, the possibilities for ensuring quality healthcare outcomes are enormous.
In 2015 more than 50,000 people visited India on medical visa – an increase 140% to 2013. In the first half of 2016, nearly 100,000 tourists visited India on medical visa. The Government has recognized the potential of medical tourism and has come up with supporting policies and recently approved the new liberalized medical visa regulations. This policy allows a 60-day stay (against 30 days earlier) and triple entry (against single entry earlier). The revenue from international patients has been growing at the rate of more than 20% and it is estimated to double its size by 2021.
In an effort to make Healthcare affordable to all by promoting local manufacturing in order to reduce the dependence on imported medical technology, the Ministry of Health and Family Welfare recently notified the Medical Devices Rules 2017. The Medical Device manufacturing sector in India is at a very nascent stage and industry experts estimate that approximately 80% of the medical devices in India are imported. The Commerce Minister Nirmala Sitharaman said: “We cannot afford to have $3.6 billion worth of import of medical devices; instead we have to manufacture them here. We need to tap the immediate potential that India has.” According to the new legislation, which will come into force from January 1, 2018, it is set to ease regulation of medical device manufacturing and development by liberating the industry from rules intended for the pharmaceutical sector. The rules will improve the Government’s ‘Make in India’ campaign by providing beneficial environment for domestic manufacturers that could lead to greater long-term investments. Plan for an exclusive zone for pharmaceuticals and medical technology manufacturing at Bengaluru is also in the pipeline.
In the move to promote domestic manufacture of medical devices, the Government recently removed anomalies in the duty structure as raw materials were taxed higher than the import duty on finished medical products which made domestic products expensive. The Government also urges the pharmaceutical industry to provide quality drugs at affordable prices to all and ensures a transparent and predictable drug price regime.
The Union Budget 2017-2018, released on 1st February 2017, shows the Government’s effort in the Healthcare Sector. The health allocations have increased to $7.5 billion, which represents an increase of 27% over the allocation made in the previous Budget. The Government has set targets to bring further down the Infant Mortality rate and the Maternal Mortality rate. Overall, the budget has provided some policy direction and replayed the Government’s aim to address some of the critical challenges India is still facing in the Health Sector.
With new rules in place, the Healthcare Industry gets ready to step into a stable and affordable future. The Government’s intent to match Indian Healthcare with global quality norms will create a dynamic system for the industry, boost domestic manufacturing and attract greater foreign investment in the sector.
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