India’s healthcare innovation sector, currently valued at $30 billion, is projected to double by FY28, according to a recent report by Bain & Company and Health Quad. The overall healthcare market in India, valued at $180 billion in FY23, is anticipated to expand at a compound annual growth rate (CAGR) of 12 percent, reaching $320 billion by the same period.
The report, titled “Healthcare Innovation in India,” notes that innovation accounts for approximately 15 percent of the total healthcare market, with around 55 percent of this segment being export-led. Aarthi Rao, a partner at Bain & Company, forecasts significant growth, with the healthcare innovation market expected to hit $60 billion by 2028. This expansion is expected to be driven by value engineering and business innovation, particularly within the biotech, vaccines, and med-tech sectors.
Healthcare innovation has nearly doubled from $17 billion in FY20. The sector comprises four key segments: pharma services (including contract development and manufacturing organizations (CDMO), contract research organizations (CRO), pharma IT), vaccines, biotech, and MedTech.
Charles-Antoine Jannsen, Managing Partner of HealthQuad, highlighted India’s progress from a focus on chemistry and active pharmaceutical ingredient (API) production to becoming a leading exporter of Covid vaccines. He emphasized that India has developed significant capabilities in biological discovery and manufacturing, advancing up the value chain.
The Indian vaccines and biotech market, valued at $4 billion in FY23, has rapidly grown from $1.2 billion in FY20, with exports driving about half of this revenue. India remains a major global vaccine supplier, meeting around 60 percent of global demand.
Healthtech has also seen robust growth, accounting for approximately 25 percent of the healthcare innovation market in FY23. This segment has more than doubled from $3 billion in FY20 to $7 billion in FY23, driven by consumer-facing and enterprise-facing solutions. The pandemic has accelerated the adoption of healthtech, surpassing previous forecasts.
Pharma services, which constitute around 50 percent of the innovation market, were valued at about $16 billion in FY23, up from $11 billion in FY20. With a substantial portion of revenue from exports, India has strengthened its position as a leading global player in this sector, particularly as Big Pharma shifts supply chains away from China.
The report underscores India’s growing significance in healthcare innovation, driven by a strong research base, advanced manufacturing capabilities, and an expanding market for innovative products and services.
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