Indian Healthcare Today - New Opportunities and Access to Growth

This webinar aims to talk about the opportunities and challenges in the Indian healthcare industry from a U.S. investor's perspective.

The discussion began by mentioning the fierce growth potential that the Indian healthcare industry holds, making it an attractive market to invest in.

The panelists first discussed the opportunities for growth in the Indian healthcare industry. Being a developing country, India is in a great position for investments in the healthcare industry. A major reason is that, like any developing country, the Indian middle class is growing rapidly, meaning more spending power. Further, attributing to an improvement in lifestyle, the number of people above the age of 60 is expected to become 20% from the current 8-10%, meaning a requirement for high-quality medical services. This, along with technological advancement, can lead to potential growth for Medical Industry.

The panelists then discussed the increasing government attention for the healthcare industry in India. India is now in a stage where the government recognizes the importance of healthcare and is inclined towards providing financial aid to the sector by doubling the current spending. This investment will improve the infrastructure of the country's Tier 2 and Tier 3 cities, which will create many opportunities for foreign investors.

As India is not shy of resources, it is poised to be a huge center for medical tourism. With improved infrastructure, there comes an opportunity to accommodate citizens from Tier 1 cities. This automatically adds to the need for revolutionary ideas, foreign investment towards cutting-edge technologies, and quality care for patients, adding to the reasons to invest in the Indian healthcare sector.

According to Mandan R. Krishnan - Vice President and Managing Director, Medtronic India, India is blessed with a bountiful workforce and is a hub of high-quality engineers. This positions the country to have a great arbitrage for foreign businesses to conduct research and development activities.

Then, the panelists addressed the challenges faced by the healthcare industry in India. According to Meenakshi Nevatia - Vice President and Managing Director at Stryker India, there are a few challenges that foreign investors may face when planning to do business in the private sector. One such challenge is the custom duties are charged on imported products, with the additional 5% Health CESS applicable from the Budget of 2020. It is believed to encourage manufacturing within the country.

Adding to the above point, even though 70% of the healthcare industry in India is comprised of Private players, the government is the entity behind controlling prices, resulting in sudden overnight cuts in the range of 60-70%. Investors must be aware of this unpredictability and lack of transparency. As for the public sector, one major requirement for the Public Procurement Order (PPO) is that 20% of the content must be sourced from India. This becomes a hindrance as today, 86% of the content in this industry is imported. The alternative to this is to go for an exceptional approval, which is a very tedious process by itself. However, since this field is so dynamic, there remains optimism that the right push could lead things in the desired direction. Post addressing the challenges this industry faces, the panelists touched on India's main regulating body for medical devices. These categories require registration, the risk-based categorization of the devices, labeling rules, and a brief on the registration process itself.

Lastly, the panelists spoke about the digitization of healthcare services and the impact on the delivery of said services and the medical device industry. The webinar concluded with Aileen Nandi - Minister Counselor for Commercial Affairs at the U.S. Embassy in India, highlighting the importance of investors partnering with domestic businesses.