Medical Device Market in India

Healthcare market in India has a clear two clusters - high-end and low-cost – both significant in size and further expanding.

High-end

Even 74% of all hospitals in India are private. The number of so called 5-stars private hospitals is increasing. One of the reason is the growing number of population that opt-for high-end private healthcare. The number of affluent Indians that earn more than 3000 USD per months has reached 16m. However, the main reason are trends in medical tourism. The size of medical tourism is $3bn with the annual growth of 30%. The number of offshore medical tourists is 1.3 m annually. Thus, the current private hospital chains are building new hospitals or adding more beds to increase their capacity to meet the demand.

Moreover, 70% of medical tourism is concentrated in a few states. The implication for foreign high-end medical device importers is that high penetration can be reached with small coverage. One of these states set Vision 2023 to aggressively expand medical tourism. They will set up 2 medical cities.

According to KPMG, 40% of medical tourism go to take advantage of advanced technology, 32% for better quality care, and only 8% for lower price. Thus, no surprise that hospitals are in urge to adopt the newest technology quickly in order to remain competitive. For example, one of the private hospital in India was the second in the world to get Computer Integrated Navigation System for Joint Replacement Surgery.

Low-cost

Primary healthcare care (PHC) segment accounts for the 60% of the healthcare delivery system. The current market size is $30 billion and it is estimated to grow to $200-250 billion by 2025.

The reason of steep growth of PHC is the recent introduction of State Government funded Health Insurance schemes. This means that people living below the poverty line got access to healthcare. In total more than 200m people are insured under these schemes in the first phase of the project. Low insurance penetration had limited the private healthcare providers entry but with the introduction of these Government funded Insurance schemes more and more private healthcare providers tap into PHC market. This means that primary medical devices could be imported for the private sector bypassing difficult tender processes in governmental hospitals.

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