“In addition to these demographic and epidemiological trends, covid-19 is likely to catalyse 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. Further, there is a growing emphasis on and emergence of Public-Private Partnership models in India’s healthcare sector,” the report said, adding that the country’s relative cost competitiveness and availability of skilled labour are also making it an increasingly favoured destination for medical value travel.

In the hospital segment, the expansion of private players to tier-2 and tier-3 locations, beyond metropolitan cities, offers an attractive investment opportunity. “With respect to pharmaceuticals, India can boost domestic manufacturing, supported by recent Government schemes with performance-linked incentives, as part of the Aatmanirbhar Bharat initiative,” the report said.

In the medical devices and equipment segment, expansion of diagnostic and pathology centres as well as miniaturized diagnostics have high potential for growth. Further, medical value travel, especially wellness tourism, has bright prospects, given India’s inherent strengths in alternative systems of medicine. Technology advancements such as artificial intelligence (AI), wearables and other mobile technologies, along with Internet of Things, also offer numerous avenues for investment, the report pointed out.

Healthcare has become one of the largest sectors of the Indian economy, in terms of both revenue and employment. “Several factors are driving the growth of the Indian healthcare sector, including an aging population, a growing middle class, the rising proportion of lifestyle diseases, an increased emphasis on public-private partnerships as well as accelerated adoption of digital technologies,” wrote Amitabh Kant, NITI Aayog CEO, in the foreword.

“The Covid-19 pandemic has not only presented challenges but also several opportunities for India to grow. All these factors, together make India’s healthcare industry ripe for investment,” he said.

In the first section, the report provided an overview of India’s healthcare sector, including insights about its employment generation potential, the prevailing business and investment climate as well as the overarching policy landscape.

The second section highlighted the key drivers of growth for the sector and the third elaborated upon the enabling policies and investment opportunities in seven key segments—hospitals and infrastructure, health insurance, pharmaceuticals and biotechnology, medical devices, medical tourism, home healthcare as well as telemedicine and other technology-related health services.