As India recovers from the second wave of COVID-19, its government released a second COVID-19 response package to strengthen healthcare infrastructure and expand hospital capacities. In the short term, states will continue to invest in public healthcare infrastructure to prevent future outbreaks. In private hospitals, stronger-than-expected revenue growth indicates greater spending power, as many will continue investing to transition into an endemic environment. Pent-up demand for elective surgeries will return quickly as the country normalizes to COVID-19. However, the public healthcare sector will face a slower recovery due to manpower shortages and structural limitations. Overall healthcare expenditures will remain conservative throughout this year. 

Our analysts are constantly evaluating changing market trends to ensure you have the most updated and relevant information for your strategic decisions. Keep reading for our analysis of the key trends in India that you need to pay attention to.

India issues a second emergency response package as the country recovers from its second wave

The new health minister has demonstrated a clear agenda to strengthen the country’s public health infrastructure and COVID-19 response. India will invest in its public healthcare facilities in the short term. The second COVID-19 response package will help public hospitals alleviate budget constraints and improve spending power in the medium term. However, weaker Southern states did not emerge as the higher receivers of this budget package.

Private hospital groups are experiencing strong demand and revenue recoveries

In the short term, private hospitals will have greater spending power compared to public hospitals because of revenue from COVID-19 treatments, pent-up demand, and normalization of COVID-19. Baseline demand levels will continue to improve as the population normalizes to COVID-19. Spending is likely to concentrate on hospital equipment and expanding infrastructure to meet a changing healthcare demand landscape.

Healthcare landscape continues to face medical equipment shortages in the short term

Manufacturing constraints in India will limit its ability to match growing demand for medical equipment in the short term. The government’s execution of production-linked incentive (PLI) investment outlays shows India’s long term commitment to building its local manufacturing capacity and drawing in foreign technology know-how. However, firms should also consider the growing localization pressure when investing in India.

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