FIRST INDIA’S HOSPITAL INDUSTRY ENJOYS HIGH INVESTMENT DEMAND INDIA
India’s hospitals
India’s hospital industry is witnessing a huge demand from both global and domestic investors, and there is a tremendous interest in tertiary care hospitals and specialty hospitals in particular, according to a report from NITI Aayog. The government’s plans to ramp up budgetary allocation for public health spending to 2.5% of the country’s gross domestic product by 2025 will benefit the hospital sector. Currently, there is a gap 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 population. Demand for health services is rising in Tier 2 and Tier 3 locations across the country. The per-capita income in these locations has risen rapidly over the past few years, the report noted. “Further, inputs such as land and labour are available at a lower cost in these cities. An added advantage is that these locations can also cater to the population in nearby villages and towns” the report added. There are nearly 600 investment opportunities worth $32b (INR2.3 lakh crore) in the hospital and medical infrastructure sub-sector on Indian Investment Grid, a platform maintained by Invest India. The hospital industry in India accounts for 80% of the country’s healthcare market. It was valued at $61.79b in the financial year 2017 and is expected to reach $132b by 2023, growing at a compound annual growth rate of 16-17%. NITI Aayog said that the long-term outlook for the hospital sector is stable, with annual revenues likely to rise over the next few years on account of rising domestic demand for healthcare and medical tourism. 4
HEALTHCARE ASIA
Chinese drugmakers to grow market share for pharma
China heightens pharma exports to SSA ASIA
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lthough India will remain a key pharmaceuticals supplier to sub-Saharan Africa (SSA), Chinese drugmakers are expected to ramp up the competition and grow their market share in the region over the coming years, according to a 2021 Fitch Solutions report. India has been the top supplier of pharma products in almost all SSA countries over the past years, supplying over 50% of total imports in major markets in 2020. It accounted for over 55% of total imports in Zimbabwe and over 20% of total imports in countries like South Africa and Nigeria. As such, the COVID-19 outbreak in India could impact the supply of medicine in SSA. Because of SSA’s high dependency on India, any disruptions in India’s pharmaceutical industry will pose downside risks to the region’s pharmaceutical market. “The coronavirus outbreak could create a supply chain gap, as we note that there are a number of
India remains a key supplier of medicines in SSA, but Chinese competition on the rise
travel restrictions imposed on India including temporary suspensions of flights, which could hinder supply to SSA markets,” Fitch added. Multinational drugmakers outside of India are expected to benefit from India’s slowdown, as other manufacturers of generic medicine could expand their import share in SSA as more countries seek alternative suppliers. Medicines manufactured in China have grown in importance across the region over the past 10 years, with pharmaceutical exports from China to Africa more than doubling from $5.4b in 2011 to $13.2b in 2020, Fitch noted. Still, SSA is expected to remain highly dependent on Indian medicines, driven by the country’s expertise in producing affordable generic drugs. Indian pharmaceutical companies are the largest providers of generic medicine in the world, and African markets benefit from these price competitive drugs, the report noted. India is also expected to continue assisting SSA in developing its healthcare sector. At the last IndiaAfrica Forum Summit held in New Delhi in 2015 that brought together representatives from all 54 African countries, the two parties disclosed plans for cooperation. One of the plans in the healthcare sector included enhancing joint efforts in health and pharma development, as well as in telemedicine and traditional medicine; in combating diseases; and in ramping up the efficiency of health institutes through training programs and coordination to harness modern scientific and medical technologies.
xxx Per ITCcapita - Tradetotal Map, expenditure Fitch Solutions on health
Source: ITC - Trade Map, Fitch Solutions
