In their latest report, global real estate consultancy Knight Frank and their U.S. partners Berkadia, note that India is currently facing a deficit of 2 billion square feet of healthcare space to cater to its current population base of 1.42 billion people. The estimated need for additional beds to reach the recommended ratio of 3 beds per 1000 people is stands at 2.4 million beds. India has a considerable gap between the number of hospital beds available in the country and the number of hospital beds required. India’s existing bed to population ratio is 1.3/1000 population (both private and public hospitals included), and there is a deficit of 1.7/1000 population.
To cater to the existing population, there is an additional requirement of 2.4 mn beds. This disparity provides an opportunity for public and private players, to expand their footprint in the healthcare industry in India. As per Indian government estimates, there are about 582 investment opportunities in medical infrastructure including hospitals valued at US$ 32bn. The hospital industry accounts for 80% of the healthcare market in India. Currently, India has an estimated 70,000 hospitals of which the private sector constitutes 63% of the total share.
India’s healthcare market was estimated to be at US$ 372 bn in 2022, a significant growth from US$ 73 bn a decade ago, in 2012. At this level and pace, India’s health care industry has grown at an annual average rate of 18% and got accelerated with pandemic as it challenged the healthcare sector by stretching the need for infrastructure and service delivery, therefore making it a trigger for transformation. Global investments in healthcare related real estate has reached US$38 bn, accounting to 4.3% of total global real estate investments
As part of the Sustainable Development Goals, India is committed to achieving Universal Healthcare Coverage. To achieve its goals, the policy makers in India have introduced schemes over the years pertaining to insurance as well as access to affordable healthcare services. India’s National Healthcare Policy (2017) aims to achieve government spending on healthcare upto 2.5% of the GDP. The Central Government’s budgetary allocation to healthcare so far has increased from 1.2% of the GDP in FY 2014 to 2.1% of the GDP in FY 2023.
As per Knight Frank’s analysis, India is one of the fastest growing economies with high personal spending potential of individuals of which healthcare comprises as major share. Factors such as the gradual rise in an ageing population, increasing per capita incomes, growing health awareness and the penetration of health insurance drive the demand for the healthcare industry in India. Additionally, there has been a growing incidence of lifestyle diseases in India led by cardiovascular diseases, which will heighten the demand for specialized healthcare.
India is emerging as one of the most affordable healthcare destinations in the world providing quality medical procedures at a relatively cheap cost. In the pre-pandemic years between 2014-2019, the inflow of foreign tourist arrivals on medical visa grew at a CAGR of 30%. It is noteworthy that despite the deficit in healthcare infrastructure in India, the country is an attractive market for healthcare tourism. As per Medical Tourism Index (2020-21), India ranked 10th out of 46 destinations in the world. With an aim to improve medical tourism, India’s tourism ministry formulated a national strategy and roadmap for medical and wellness tourism in 2022 under the ‘Heal in India’ initiative with the primary objective to strengthen the healthcare ecosystem in the country.
