Private hospitals on foreign forays may get a helping hand

Several Indian private firms, including Apollo Hospitals Enterprise, maintain a presence abroad, particularly in Africa.
Several Indian private firms, including Apollo Hospitals Enterprise, maintain a presence abroad, particularly in Africa.

Summary

  • The government can utilize its lines of credit (LoCs) to assist the construction of health facilities in foreign countries.

NEW DELHI : The central government is considering tapping private Indian healthcare majors to develop and operate hospitals and healthcare facilities in foreign countries, particularly in Africa, two people aware of the matter said on the condition of anonymity.

Under the proposal, the government can utilize its lines of credit (LoCs) to assist the construction of health facilities in foreign countries, said the first of the two people. The second person said that once built, these facilities can then be turned over to private Indian healthcare providers to run on commercial terms.

Such efforts in strategically important developing countries have been a key part of India’s diplomacy, and the current proposal to involve private healthcare entities is expected to improve the effectiveness of these efforts. In addition, private companies will acquire a better foothold in developing country markets.

Queries mailed to the external affairs ministry and health ministry remained unanswered till press time.

Earlier, LoCs provided by government agencies like EXIM Bank would be used by partner countries to contract Indian service providers for construction of hospitals and other health infrastructure. The hospitals would then be operated by the host country, but this model hasn’t worked very well.

“In the past, when India has built hospitals in neighbouring and developing countries, there have been problems. We can build and hand over a hospital but then the host government is unable to do much with it," said the first of the two people cited earlier.

However, there are some challenges facing such a proposal for private Indian hospitals. These include a lack of understanding about local laws and regulations, finding the right partner with knowledge of hospital operations and familiarity with licensing requirements, liaising with government officials of the partner country, and even attracting talent to countries in the developing world, including Africa.

“Having a robust contract is imperative to safeguard our interests and investments, especially in the face of a change in Indian government," said Dr. Aashish Chaudhry, the managing director of Delhi-headquartered Aakash Healthcare Hospital, which opened its own unit in 2023 in Uzbekistan. “Even if discrepancies arise, having a neutral third party (the foreign government) to protect the investor’s interests becomes crucial."

In the past, India has funded the development of hospitals in countries such as the Maldives and Nepal, which are then handed over to the host government to run. However, the government is now keen to share the burden of management and operations with private Indian firms.

“Establishment cost is quite high, and not a cakewalk; measures should be taken on tax rebates to make it more attractive for hospital chains to invest outside India," said Dr Chaudhry. “If we go for PPP (public-private partnership) projects, then it would be beneficial for both sides, and we have been asking the government to consider it."

Some key examples of India’s health diplomacy include the India-Africa Health Fund, launched in 2015, which provided $10 million for health projects in Africa. India also announced plans to develop a new super- specialty hospital in Fiji in 2023 during Prime Minister Narendra Modi’s visit to the country. Reportedly, a site in the town of Nasinu has been identified for further development of the hospital.

Like Aakash, several other Indian private firms maintain a presence abroad, particularly in Africa. These include Apollo Hospitals, Dr. Agarwal’s Eye Hospital and Fortis in countries like Nigeria, Tanzania, Mozambique, Rwanda and Uganda.

Apollo has announced plans to move into the healthcare sector in Indonesia as well, a key southeast Asian market.

However, these are private initiatives and do not involve the government of India.

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