1. “FOREIGN DIRECT INVESTMENT IN INDIAN
HEALTH CARE SECTOR: THE OPPORTUNITIES,
MAJOR ISSUES AND CHALLENGES.”
Dr. C.K. Buttan
Professor & H.O.D.
Dept. of Commerce
Saifia P.G. College, Bhopal
(Email:
drckbpeace@yahoo.com)
Ajay Mishra
Asst. Professor
JSSGIW Faculty of
Management
Bairagarh, Bhopal
(Email:
ajay2708@gmail.com)
Shweta A. Mishra
Asst. Professor
Sant Hirdaram Girls College
Bairagarh, Bhopal
(Email:samishra3009@gmail
.com)
2. INDIAN HEALTH SECTOR
The Indian healthcare industry, which comprises:
Hospitals
Medical infrastructure
Medical devices
Medical tourism
Clinical trials,
Outsourcing,
Telemedicine,
Health insurance and
Medical equipment
4. GROWTH
•Growing more than a growth rate of around 27% during the year 2009 to 2012.
•This market is valued for a worth of around Rs. 1.9 lakh crore and
•By the end of the year it is expected to rise by a yearly 30% growth.
• As this much high expectations also raise the requirements of up gradation in
the standards of services in comparison to global markets
5. ROLE OF PRIVATE SECTOR
Private sector’s share in hospitals and hospital beds is estimated at 74 per
cent and 40 per cent, respectively.
This sector is already predominantly privatized and accounts for more than
80% of the total expenditures on health care in our country.
This becomes more important when we find that almost 80% hospitals are
managed by private
6. MARKET SIZE
The hospital and diagnostics centre in India received
foreign direct investment (FDI) worth US$ 2,057.29
million,
Drugs & pharmaceutical registered FDI worth US$
11,391.03 million and
Medical & surgical appliances industry aUS$ 720.41
million, respectively during April 2000 to September
2013.
[According to data provided by Department of Industrial
Policy and Promotion (DIPP)]
7. MARKET SIZE
The Indian medical device and equipment market is
expected to grow to around US$ 5.8 billion by 2014
and US$ 7.8 billion by 2016.
Growth recorded at a CAGR of 15.5 per cent,
according to a report by Grant Thornton India.
India’s medical device market is currently the fourth
largest in Asia with 700 medical device makers, and
ranks among the top 20 in the world, as per the
data from India Semiconductor Association.
8. MARKET SIZE
On the back of continuously rising demand, the
hospital services industry is expected to be worth
US$ 81.2 billion by 2015.
In addition, the Indian hospital services sector
revenue is expected to increase at a CAGR of 20
per cent during the period 2012–17, generating
immense possibilities for players in the market,
according to a RNCOS report titled, ‘Indian Medical
Device Market Outlook to 2017’.
10. MEDICAL TOURISM
Health tourism is
gaining momentum in
India. It could become
a size US$ 5 billion
business by 2015.
11. MEDICAL TOURISM
With the finest and experienced specialists and
technological edge along with latest equipment and
state-of-the-art infrastructure, Indian health tourism
industry is gaining momentum.
The industry in India is also expected to record
revenue worth US$ 1 billion per annum, growing at
around 18 per cent and is expected to touch US$ 2
billion by 2015.
12. MEDICAL TOURISM
India has witnessed
an influx of patients
from Africa, CIS
countries, Gulf and
SAARC nations,
Pakistan, Bangladesh
and Myanmar, who
mainly come for organ
transplant,
orthopaedic, cardiac
and oncology
problems.
13. MEDICAL TOURISM
Kerala has the potential to become the hub and most
preferred destination for health tourism with highly
qualified doctors and some of the best hospitals and
resorts in the country,
14. MEDICAL TOURISM
Kerala is
the fastest
growing
tourism
destination
in India.
Last year, 1
million
foreign and
10 million
domestic
tourists
visited the
state.
15. GOVERNMENT INITIATIVES
According to the Department for Industrial Policy and
Promotion (DIPP) the total estimated FDI inflow into
India in the hospitals and diagnostics sector for the
period April 2000–April 2011 was around Rs. 6000 crore.
The Government of India has allocated Rs 3,000 crore
(US$ 482.32 million) in the 12th Five-Year Plan (2012–
17) for development of the medical device sector
Moreover, 100 per cent FDI is permitted for health and
medical services under the automatic route. Also, the
Department of Health Research has decided to set up a
Medical Technology Assessment Board to evaluate all
kinds of Medical Technologies.
16. MAJOR POLICY AND PROMOTION IMITATED BY
DIPP
National Rural Health Mission (NRHM):-NRHM have contributed to
reducing the maternal mortality rate (MMR), infant mortality rate (IMR)
Automatic FDI:- Allowed up to 100%.
Priority status:-Priority to proposals of greater social relevance such as
hospitals, life saving drugs and equipment.
National Urban Health Mission (NUHM):- To address the
healthcare needs of slum dwellers across urban India; there are nearly 4.26
crore slum dwellers spread across 640 towns and cities in India.
Rise in funding for the sector:- The government has increased the
plan allocation for public health spending to USD 5.96 billion in 2011–12 from
USD 4.97 billion in 2010–11. Further, the Ministry of Health and Family
Welfare has decided to increase health expenditure to 2.5% of GDP by the
end of the 12th Five-Year Plan, from the current 1.4%.
Encouraging policies:- reduction in import duties , higher
depreciation and other tax incentives.
Reduction in customs duty:- Customs duty reduced to 5%
from 25%,
17. MAJOR CONTRIBUTORS
Trivitron Healthcare with India Value Fund Advisors (IVFA) to finance
its next phase of growth. IVFA has invested Rs 150 crore (US$ 24.12
million) for a minority stake in the company.
IDFC Alternatives has invested Rs 125 crore (US$ 20.10 million) in
Medi Assist Healthcare.
Cadila Pharmaceuticals Ltd (CPL) has decided to invest another Rs
100 crore (US$ 16.08 million) on expansion, upgradation and
modernisation of its manufacturing unit at Samba in Jammu district.
Apollo Hospitals and Medtronic Inc are to collaborate to bring an
innovative, affordable and portable haemodialysis system in India.
Medtronic intends to develop and manufacture key components of this
haemodialysis system in India which will be ready for commercial
launch in 2016
18. OPPORTUNITY IN THIS SECTOR
The growth rate of Medical tourism in India during the
course of 2009-2012, is remarkable and records around
27%.
India has a large population which is still not covered till
date under any sort of medical and health insurance
Presently there is a huge requirement and demand of
Hospitals both tertiary care and specialty care
India though a developing nation still prominently holds a
large rural and semi rural areas having deficiency of
Medical aids, doctors, physicians, medicines, nurses in
totality Medical and health care facilities.
20. Uncertainties regarding current
reforms, policies, rules and
regulations
Depth knowledge of local
market, culture, management
styles, financial and managerial
control
Privatization in health care
industry
other lucrative and competing
destinations
21. Post establishment related
operational issues
Missing Roadmap
High cost and long gestation
period
Deteriorating value of Rupee
Lesser Insurance cover
Division of actual availability
and requirement of facilities
Rural and Urban India Disparity
22. FINDINGS
Indian health care industry projects as a
great sector and attracts FDI as a huge
ocean of opportunities.
23. FINDINGS
•Best sector to invest money is Hospitals which
come under Indian health care industry offering
them huge and bulk profits.
24. HEALTHCARE INDUSTRY CATERS TO ONE OF THE MAJOR
FINANCE RELATED ISSUE OF RETURN ON INVESTMENT AS IT IS
MUCH BETTER AS COMPARED TO ANY OTHER NATION, WHICH
CAN ADD ‘A FEATHER IN THE CAP’.
25. SUGGESTIONS
THE LOCAL GOVERNMENT SHOULD SUPPORT THE FDI
TO HAVE A POSITIVE AND GOOD EFFECT.
26. FOREIGN INVESTORS MAY PLAN FOR JOINT VENTURES
AND THEY SHOULD BE SUPPORTED FOR THIS OPTION.
27. COST OF MEDICAL TREATMENT AND REGULAR CHECKUPS IN
INDIA IS MUCH LOWER AS COMPARED TO OTHER DEVELOPED
NATIONS WHICH DEFINITELY GIVES A POSITIVE APPEAL TO FDI.
28. OUR SYSTEM SUFFERS FROM POOR AND DELAYED TREATMENTS
WHICH CAN CAUSE SITUATIONS OF LIFE AND DEATH SO INVESTORS
HAVE AN GOLDEN OPPORTUNITY TO GUARD, HELP AND FACILITATE
THE MEDICAL AND HEALTH CARE INDUSTRY AND PROVE THEIR
WORTH AS RELIABLE, COST EFFECTIVE AND BEST FACILITATORS.
29. CONCLUSION
There are many factors present in our Medical and
health care sector serving as innumerable
opportunities
30. BASICALLY INCLUDING
Demand and supply,
Bridging the gap between demand and supply,
Increasing per capita income,
Increased rate of returns,
Changing Consumer Behaviour
31. CHALLENGES AHEAD
Non supportive attitude of local government,
Local or private players,
Typical environment,
Deteriorating value of rupee
32. DRIVING FORCE
Billions of population act as a driving force to FDI
in Indian Health care industry.
This huge population promises great opportunities
to all the FDI and investors abroad as well as
domestic thus need of the hour is
33. NEED OF THE HOUR
Focus on the Indian healthcare Industry and make
the best out of it and give the public right to healthy
living..
34. CLEARLY EVIDENT
Medical treatments in India are lower as compared
to other developed nations thus our people should
be given better treatment and medical facilities at
affordable prices within the boundaries of our
country.
35. TO END ON A POSITIVE NOTE
Economic development of our country would boost
up through the impact of increasing Foreign Direct
Investment in Indian health care sector.
