NITI Aayog forecasts healthcare sector to reach $372 bn by 2022

India’s healthcare sector is expected to reach $372 billion in 2022, registering a compounded annual growth rate (CAGR) of around 22% since 2016, more so with the pandemic opening up several opportunities, NITI Aayog said in a report on Tuesday.

In its report, Investment opportunities in India’s healthcare sector, the think tank outlined the range of investment opportunities in segments such as hospitals, medical devices and equipment, health insurance, clinical trials, telemedicine and medical tourism. The segments are expected to diversify as an ageing population with a growing middle class increasingly favouring preventative healthcare, it said.

Rising instances of lifestyle diseases, such as high cholesterol, high blood pressure, obesity, poor diet and alcohol consumption in urban areas is boosting demand for specialized care services, it said.

“In addition to these demographic and epidemiological trends, covid-19 is likely to catalyze long-term changes in attitudes towards personal health and hygiene, health insurance, fitness and nutrition, as well as health monitoring and medical check-ups. The pandemic has also accelerated the adoption of digital technologies, including telemedicine. Furthermore, there is a growing emphasis on the emergence of public-private partnership models in India’s healthcare sector,” it said.

According to the report, India’s relative cost competitiveness and availability of skilled labour are also making it an increasingly favoured destination for medical value travel. It said the hospital segment offers attractive investment opportunities for private players in tier-2 and 3 cities. “With respect to pharmaceuticals, India can boost domestic manufacturing, supported by recent government schemes with performance-linked sops,” it said.

It said manufacturing of medical devices and equipment, expansion of diagnostic and pathology centres and miniaturized diagnostics have high growth potential. Besides, medical value travel has bright prospects, given India’s inherent strengths in alternative systems of medicine. Tech advancements such as AI, wearables and other mobile tech, along with Internet of Things, also offer numerous avenues for investment, it said.