India's healthcare innovation market poised to double by 2028

It is projected to reach $60b within five years.

India’s healthcare innovation market is expected to reach $60b by 2028, doubling from the around $30b industry value in 2023, according to a report by Bain & Company.

Pharma services will lead the sector, comprising around 45% to 50% of the innovation markets, followed by healthtech at around 30% to 35%.

Meanwhile, vaccine and biotech will have a share of around 10% to 12%, whilst medtech will be at 8% to 10%.

In 2023, the innovation industry accounted for 15% of the $180b overall healthcare Indian market with pharma services comparing around half of the sector’s contribution.

Key drivers for the innovation market’s growth are India being the second largest contract development and manufacturing organisation after China, the increasing expertise of Indian players, and global pharma firms strengthening their omnichannel presence.

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Bain noted that the growth of the sectors will be accompanied by other structural changes such as the consolidation across segments, particularly the rationalisation of smaller underfunded businesses or those with no clear profitability roadmap.

There will also be a shift in profit pools focused on companies that use technology to 

boost their efficiencies instead of those that rely on expensive customer acquisition. This will be coupled with a new set of companies that rely on artificial intelligence and machine learning technologies to provide solutions.

The report added that there will be a rise in integration and partnerships amongst incumbents and digital-first players, resulting in “broader ecosystem plays” that aim to provide a seamless healthcare journey to consumers.

Tier 2 and 3 markets’ relevance for growth will also increase, leading to a growth in access and affordability of health services for underserved populations.