In the post-COVID period, the health-tech sector in India has exploded, with the country emerging as one of the fastest growing sectors in the world. The state of Maharashtra has been at the forefront of this growth, with the health-tech ecosystem benefiting significantly from Free Trade Agreements (FTAs) and a liberalized Foreign Direct Investment (FDI) regime.
The health-tech sector in India comprises hospitals, medical devices and equipment, health insurance, clinical trials, telemedicine, and medical tourism. In the late 90s, these sub sectors were still in their infancy, but the FTAs and FDI have provided a major boost, resulting in growing revenues and rising domestic demand for a better health-tech ecosystem. Mumbai, the capital of Maharashtra, has naturally emerged as a hub for health-tech, but smaller cities such as Nagpur, Pune, Aurangabad, and Nashik are also set to see significant growth.
The 100% allowance for FDI in construction has been a major factor in the growth of allied and ancillary units such as pharmaceuticals, diagnostics, medical equipment, medical insurance, and telemedicine. India has signed deals with the US, UK, Japan, and the European Union, and has seen strong growth in the biotechnology, medical devices and equipment, and diagnostics sectors. The presence of multinational companies and small and medium enterprises (MSMEs) in these sectors is a testament to the success of the FTAs.
According to a NITI Ayog 2021 industry report, the Indian health-tech market is valued at $6.2 billion and is estimated to reach $21.3 billion by 2027, with a compound annual growth rate (CAGR) of 19.2%. This growth is being driven by factors such as a rising elderly population, an increase in chronic diseases requiring long-term care, growing demand for personalized care, and the increasing number of nuclear families in rapidly urbanizing areas.
The FTAs serve as a case study for how India has prospered in the global economy and the potential for the country to sign more such agreements in the future. While domestic production in India has historically been a barrier to success in global trade, the government is working to reform strategies and find a way forward on the global stage.
It is worth noting that other countries have also faced challenges in the health-tech sector, but have managed to recover and outperform their pre-pandemic levels. Mr. Anand Madia, Officer of Special Duty to the Chief Minister of Maharashtra, believes that the key to success in the health-tech sector is a combination of good policy and strong partnerships. “We have seen the positive impact of FTAs and FDI on the health-tech sector in Maharashtra, and we are committed to continuing to work with our partners to drive growth and innovation,” he said.
