Mumbai, Nov 27 (NationPress) The Indian healthcare industry is witnessing significant growth and is anticipated to achieve $638 billion by 2025, according to a recent report. Valued at $110 billion in 2016, the market expanded to $372 billion in 2023, reflecting an impressive 22.5 percent CAGR during this timeframe, as detailed in the report by Bajaj Finserv AMC.
Over the last decade, the sector has achieved an overall 17.5 percent CAGR growth. The report attributes this expansion to major innovations across hospitals, pharmaceuticals, diagnostics, and other related industries.
“The sector saw a remarkable increase in private healthcare spending during and after the Covid-19 pandemic, with the hospital market size rising from $62 billion in 2020 to $132 billion in 2023. In the realm of pharmaceuticals, India has established itself as a global vaccine hub, led by entities such as the Serum Institute and Bharat Biotech,” stated Sorbh Gupta, Senior Fund Manager - Equities at Bajaj Finserv AMC.
“In diagnostics, there has been a fundamental shift towards digital diagnostics, while the demand for home testing kits surged post-pandemic. Additionally, the market for functional foods and personalized nutrition is projected to grow at a 16 percent CAGR, reaching $12 billion by 2027. Simultaneously, the fitness and wellness sector is expected to expand at an astonishing 27 percent CAGR, reaching $12 billion by 2025,” he further added.
Moreover, the report indicates that life expectancy in India is projected to reach 84 years by 2045, an increase from 67 years in 2021.
The country’s median age is also expected to rise by 1.3 times, from 28.8 in 2025 to 38.3 by 2050. This increase in life expectancy and an ageing population is likely to drive growth in the healthcare sector, subsequently increasing the demand for age-related healthcare services.
Enhanced investments in Tier 2-6 cities have led to substantial improvements in healthcare infrastructure across India. The expansion of medical education has been significant, with the number of medical colleges increasing 1.8 times, reaching 758 in FY24 (over the last 8 years).
In the past 4 years, the number of doctors has grown by 1.1 times, while the number of hospital beds is projected to increase by 12 times by 2045.
Nevertheless, the sector still has considerable potential for growth. There is a need for three million beds to meet the target of 3 per 1,000 by 2025, along with 1.54 million doctors and 2.4 million nurses to accommodate the rising demand.
The report highlights that health insurance remains underutilized in India. The out-of-pocket expenditure as a percentage of current healthcare spending in India is 54.8 percent, compared to 17.1 percent in the UK, 11.3 percent in the US, 35.2 percent in China, and 12.9 percent in Japan.
However, the health insurance market in India is projected to grow from Rs 0.91 trillion in 2024 to Rs 1.5 trillion in 2029. This trend is reflected in the health insurance premium collections, which rose to $13.07 billion in FY24 from $3.82 billion in FY16.
