A joint study of industry body Associated Chambers of Commerce and Industry of India (Assocham) and research firm RNCOS has stated that Indian healthcare sector is likely to witness threefold jump as its size in value terms may to reach $372 billion by the year 2022 from $110 billion in 2016. Thus, it noted that the healthcare sector will clock a compounded annual growth rate (CAGR) of 22 percent. As per the report, growing lifestyle diseases, rising demand for affordable healthcare delivery systems due to increasing healthcare costs, emergence of telemedicine, rapid health insurance penetration, mergers and acquisitions helping to reach untapped markets and government initiatives are driving healthcare market in India.
The Assocham-RNCOS study further stated that the medical devices market in India, which was valued at $4 billion as of 2016, is likely to cross $11 billion mark by 2022 on the back of factors such as growing geriatric population, uptick in medical tourism and gradual decline in cost of medical services. However, it noted that imports make up about 75 percent of Indian medical devices market.
With regards to the Goods and Services Tax (GST) impact on pharma industry, the report said the new tax regime will streamline taxation structure as also lead to ease of doing business by minimising cascading effect of many taxes applied to a product, rationalise supply chain, enable flow of seamless tax credit, lower manufacturing cost and cost of technology and make healthcare affordable. It also highlighted that increasing expenditure on research and development (R&D), rising collaborations between Indian and foreign companies, reduction in product approval time and other such factors are driving the growth of Indian pharmaceutical market.