Healthcare Market in India 2023-2028

Within India, the healthcare infrastructure is systematically organized into primary, secondary, and tertiary healthcare tiers, each with its distinct role and responsibilities. These tiers of healthcare services are made available through a combination of public and private healthcare providers. Nevertheless, it is noteworthy that the current landscape of the healthcare market in India is predominantly under the influence of the private sector.

Market Insights:

The market size in 2023 is attributed to the flourishing health tech, especially the use of AI in the healthcare sector. The Indian healthcare industry is recognized for its massive production capacity and high-quality, low-cost generic medicines across the globe. The importance of this sector was also highlighted during COVID-19 pandemic. Many Indian companies exporting generic products have cleared the US Food & Drug Administration’s quality standards, allowing them entry into the global market for generic drugs, thus, creating more growth opportunities for the coming years.

The increasing share of government on health expenditure will eventually reduce the out-of-pocket healthcare expense for the population in India by 2050. The Indian government has promised to spend 2.5% of India's gross domestic product (GDP) on healthcare by FY 2025

Market Segments:

The share for the medical tourism and medical insurance market is expected to increase considering the increase in quality medical services. A market opportunity for players in travel insurance for medical tourists is also emerging. Outpatient care service is projected to increase by more than 2% considering the increased capital investments in outpatient facilities by hospitals and healthcare facilities. The increasing volume of consultation contributes to the current market growth. Among the specialties that boost high consultation include Dentists, Gynecologists, Pediatricians, General Medicine, Orthopedics, and Ophthalmology. Teleconsultations and the use of software to maintain patient records are among the few rising trends in this segment.

Market Drivers:

A key driver in recent years has been India's concerted effort to narrow the gap between the number of healthcare professionals and the surging healthcare needs at both state and central levels.

This drive has been significantly bolstered by various government initiatives including the reduction of benchmark percentiles for admissions into PG degree and diploma courses, an increase in the counseling rounds for All India Quota PG (Broad Specialty) seats, and extended to four rounds starting in 2021. Furthermore, in 2021, the enactment of the National Commission for Allied and Healthcare Professions (NCAHP) Act demonstrated a commitment to accelerating the growth of allied medical seats across the country.

Key deterrents to the growth of the market:

In India, public healthcare suffers from inadequate financing, particularly in rural areas. This leads to a reliance on expensive private healthcare facilities. While the private healthcare sector is growing, it remains fragmented and is lacking a presence in rural areas. This limitation hinders access to healthcare for both rural and low-income populations. The budgeted expenditure on the healthcare sector for FY 2023 stood at approximately 1.98 percent of the GDP, which falls significantly below the anticipated trajectory required to achieve the public health expenditure target of 2.5 percent of the GDP by 2025, as outlined in the National Health Policy of 2017
A substantial increase in public healthcare expenditure might help in generating adequate and efficient healthcare facilities for the rural and financially distressed population of the country. Given the country's high population, rising disease prevalence, and inflation, the allocation to public healthcare facilities is constraining the growth of the healthcare market during the forecast period.

Key market Trends:

The demand for advanced telemedicine is gaining traction in the Indian market. The concept of telemedicine integrates CRM (Customer relationship management) software to allow the healthcare provider to perform audio/video consultations, send E-prescriptions, and access patient EMR/EHR records. Telemedicine is also expected to push the market for medical tourism by providing consultation to international patients as well.

The trend is also supported by the government with the launch of the ‘eSanjeevani telemedicine’ service of the Union Health Ministry in 2020. In March 2022, the portal completed 30 Mn teleconsultations. Considering the revenue opportunities, several private players have also invested in the trend. For instance, Apollo Group provides services such as TeleConsultations, TeleRadiology, Tele Cardiology, Tele Condition Management