Market Review
and Outlook
of trained medical personnel, healthcare
infrastructure and services to meet the
demands of the industry.
In order to encourage the development of
the healthcare sector, the India government
adopts a liberal and supportive foreign
investment policy. This has played a key
role in driving the growth of the healthcare
sector in the last decade.
s
Tax incentives and tax holidays are
offered to hospitals providing health
travel facilities.
s
Foreign Direct Investments (“FDI”)
are permitted up to 100% under the
automatic route for the hospital sector
in India
3
.
s
Brownfield projects are given permission
for up to 100% under the government
route
3
.
s
Certain tax benefits provided for by
Section 10 (23G) of the Income Tax
Act have been extended to financial
institutions that provide long-term capital
to hospitals with 100 beds or more
3
.
INDIA’S PRIVATE HEALTHCARE
SECTOR
The growing demand for healthcare
in India, together with the government’s
aim to develop India into a global healthcare
hub places India as an attractive destination
for foreign private investments. The Asia
Pacific region saw a USD0.6 billion increase
in private investments in the healthcare
industry, with the majority of the activities
taking place in India and China
7
. Between
April 2000 and March 2015, the hospital
and diagnostic centres in India attracted
USD2.9 billion in FDI
8
.
The private sector has a strong presence
in the Indian healthcare sector, playing
a key role in driving its growth. Private
healthcare accounts for almost 72%
of India’s total healthcare expenditure,
with the private sector holding a 40%share in
hospital beds
3
.
The majority of private investments in
secondary, tertiary and quaternary healthcare
INDIA'S KEY PLAYERS IN HEALTHCARE
3
Company
No. of beds
Fortis Healthcare Ltd
12,000
^
Apollo Hospitals Enterprise Ltd
8,717
Narayana Health
7,500
Manipal Group of Hospitals
4,900
Aravind Eye Hospitals
3,649
Max Hospitals
1,973
CARE Hospitals
1,912
^
Since the IBEF March 2015 report was issued, Fortis Healthcare Limited, has since reduced its number of beds from 12,000 to 10,000.
1
Deloitte (2014) Global Healthcare Outlook – Shared Challenges, Shared Opportunities.
2
The Economic Times (2015). Healthcare sector likely to hit $155 billion revenue by 2017: Report.
3
India Brand Equity Foundation (2015). IBEF Healthcare Report March 2015.
4
5
Reuters (2015). Exclusive: Modi govt puts brakes on India health plan.
6
Deloitte (2015). 2015 Healthcare Outlook – India
7
Bain & Company, Inc. (2014) Global Healthcare Private Equity Report 2014.
8
Department of Industrial Policy and Promotion India (“DIPP”) (2015). Factsheet on Foreign Direct Investment – From April 2000 to March 2015.
institutions are concentrated in metros,
Tier-I and Tier-II cities. In recent years,
India has also seen an increasing number
of hospitals in Tier-II and Tier-III cities,
fuelling the growth of the healthcare
sector
3
. Investors have begun to explore
the opportunities presented in primary and
specialty care (e.g. oncology, pediatrics,
maternity, dental, etc) and support services
(e.g. diagnostic labs) while remaining active
in providing tertiary care
7
.
The outlook in the Indian healthcare
industry remains positive with sustainable
growth factors. The government initiatives
to encourage growth in the sector
will help propel the progress, with
the private sector expected to play
a dominant role in this growth.
ANNUAL REPORT FY2015
11
