The launch of India’s mass vaccination plan, combined with a recent dip in domestic COVID-19 cases, has resulted in a boost in consumer confidence and a gradual recovery of elective surgery volumes in local hospitals. However, this widespread optimism may be short-lived, as the vaccine drive begins slowly. This year, the central government will be challenged to both manage COVID-19 outbreaks effectively and boost economic growth through higher public infrastructure spending.  

India wagers on an ambitious vaccination plan while battling vaccine hesitancy and logistical challenges. Optimism over a recovery path for India’s healthcare sector has grown as a result of falling COVID-19 cases and the start of an ambitious vaccination program. However, vaccine hesitancy and logistical challenges remain for India, with a potential second COVID-19 wave possibly driving demand disruptions across states and regions. Companies should prepare to mitigate risks for demand planning in 2021. 

Budget promises long-term infrastructure investments but offers limited short-term fiscal boost. Even with government pronouncements of a massive infusion of government resources into the healthcare sector, the reality is that the Ministry of Health and Family Welfare budget will increase moderately this year and will actually have a lower share of the 2021–2022 budget. Actual expenditure growth will require a persistent recovery in COVID-19 infection rates and broad immunization, which will occur gradually through the first half of 2022.

Localization efforts will increasingly center on production incentives while boosting domestic demand. Despite repeated demands by industry associations to increase import taxes on medical devices and reduce the goods and services tax on local manufacturers, the central government did not roll out any tax relief. Rather, it continues implementing production-linked incentive programs and permitting several projects that will build local production capacity and reduce foreign dependence, particularly on active pharmaceutical ingredients (APIs) and medical devices. 

Our experts Antonio Martinez, Director of Global Healthcare Research and Sarah Gkonos, Managing Director of Client Services APAC, recently held a webinar focused on India and its healthcare outlook for 2021, including topics such as: 

  • COVID-19 healthcare strategies and outlook for herd immunity 
  • Prospects for the normalization of elective surgeries and outpatient treatment 
  • 2021-2022 Union Budget priorities for healthcare investments and financing 
  • Industrial policy and localization dynamics for the pharmaceutical and medical device sectors 
  • Outlook for the National Digital Health Mission initiatives 

Watch the full webinar presentation below: 

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