HealthcareAn Unprecedented

Opportunity

March 2005

Healthcare

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

India - An Introduction

Population

States/UTs

Geographical Area

Languages recognised

Business language

Per Capita Income**

GDP**

Over 1 bn

35

3.3 mn sq kms

22

English

US$ 534

US$ 650 bn**(at factor cost & at current prices)

1USD=43.54 INR (as on July 4, 2005)

Source:CSO Statistics

India - Fast pace Growth

Largest democracy

4th largest economy by PPP index

6th largest energy consumer

ForEx reserves skyrocket from US$ 42 bn (2001) to

US$ 133 bn (February, 2005)

GDP growth to continue between 6-8%

3rd largest economy by 2050: Goldman Sachs

Leading in IT & BPO

Oil & Gas & Biotechnology sunrise industries

India - Leading the world

Hero Honda - largest manufacturer of motorcycles

Moser Baer - 3rd largest optical media

manufacturer in world

Pharmaceutical Industry - 4th largest in world

Walmart, GAP, Hilfiger source more than

USD 1bn worth apparel from India

100 Fortune 500 have set R&D facilities in India

including GE, Delphi, Eli Lilly, HP, Heinz and Daimler

Chrysler

Healthcare

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

Million, 2000-2001 Per cent, 2000-2001

4.0

5.3

1.0

1.2

1.6

0.8

1.7

0.4

5.2

4.8

3.5

3.0

1.8

1.4

0.9

1.7

Healthcare

Education

Retail banking

Power

Railways

Telecom

Hotels, restaurants

IT

Healthcare Delivery Market

Revenues Largest service industry Employment Second largest after education

Sector Direct employment Revenues/GDP

Source: National Accounts Statistics, 2001; Manpower profile; CBHI; McKinsey analysis

March 2005

Growing at 13% p.aExpected to grow at 15% over next 4-5 years

Healthcare Delivery Market Size

2000-01US$ 18.7 bn

5.2% of GDP

US$ 45 bn

8.5% of GDP

2012 (projected)*

* Source: CII – McKinseyMarch 2005

2,437 12,327

14,760

5.2% of GDP

Total Healthcare

market

Pharma market

Healthcare delivery market

India spent US$ 22.4 billion on healthcare (2001)

Rising Healthcare Spending

March 2005

Out-of-pocket

Prepayment

Two-thirds of healthcare spending is out-of-pocket

Household - Major Consumer

100% = USD 1,830 million

20

15 1

64

Government’s spend

Private/social/ community insuranceEmployer’s

spend

Direct household

spend

2000-01

Source:NSSO;CMIE;NCAER;Annual Reports;Govt Budgets;Economic Survey 2000-01

March 2005

Government & public employersPrivate providers

100% = USD 1,830 million

6337

In terms of delivery, private providers capture 63% of US$ 1,830 million spend

Healthcare - Private sector Dominates

Source: CII -McKinsey

March 2005

Health Insurance in India

Liberalising insurance sector

Multinationals building local partnerships

March 2005

Health Insurance in India

Growth of insurance cover 100% in last 2 years

Health insurance cover 3 - 4 % of

1 billion population

March 2005

Healthcare

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

MNCs in India

Philips emerging as number two in Indian medical systems market

Siemens leading manufacturer of medical equipment

Proton Health entering India with digital health Care monitoring devices

Drager Medical joint venture between Dragerwerk AG AG and Siemens AG

Wipro GE largest medical systems sales &Medical Systems service provider in India

March 2005

Healthcare

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

Invest in India

India requires

US$ 25 billion

in fresh investments

over the next 8-10 years

Source: Indian Healthcare Federation, CII

March 2005

Service providers

Manpower training

Infrastructure

Insurance

Materials

Curative and preventive in

primary, secondary and

tertiary care; rehabilitative-

geriartric and others

Doctors, managers, nurses,

technicians

Medical equipments &

service equipments

Hospitalisation

Medicines disposables

Invest in India

March 2005

Preventive and curative care

Rising demand for multi and super-speciality services

Shift from infectious to lifestyle diseases

85% of inpatient spend on five categories Cardiology, Oncology, Trauma, Acute Infections

and Maternity

March 2005

Share of Health in Total Private Final Consumption Expenditure

3.50%

5.30%

1993-94 2001-02

In ten years between

1993-94 and 2001-02,

aggregate household

expenditure on health

services increased by an

annual compounded rate

of 9.3%

Rising demand for quality healthcare

March 2005

Corporatisation of Indian healthcare

Corporate hospitals 150

Private hospital beds 32% of total hospital beds

March 2005

Only 2.5 million or .25%

of population insured

315 million people in India can afford

insurance

Health Insurance - A vast untapped market

March 2005

Projected insured base in India (mn)

30

160

2005 2010

Projected insurance base2005 30 million

2010 160 million

Health Insurance - A vast untapped market

Source: India Country Commercial Guide 2002

March 2005

Addressable population for preventive

healthcare check-ups 160 million

Year - on - year growth more than 20-25%

over 2001-2003

Preventive healthcare

March 2005

By 2008 USD 4.5 billion opportunity employing 200,000 people*

Forms processing

Medical billing

Disease coding

Claims adjudication

Healthcare BPO - Promising dynamism

*Source: NASSCOM

March 2005

Rural population of 650 million people

Telemedicine - Diversifying opportunity

Tap the large Indian landscape

March 2005

The Indian Biomedical Devices Market

Size US$ 1.5 billion

Growing demand for medical equipment

March 2005

Healthcare

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

Growingpopulation

2.5%annually

Expandingworking

population group65%

by 2020

Improvinglife

expectancy

Age 15-542001 55%2010 59%

Demographic Advantage

March 2005

23,000 Primary Health Centres132,000 Sub-centres

2,400 Community Health Centres

1500 urban health posts

1,200 ESI and PSU hospitals

117 tertiary medical colleges and hospitals

4,400 district hospitals

Urban

TertiaryCare

SecondaryCare

PrimaryCare

Rural

Infrastructure

March 2005

Healthcare facilities - high quality at low cost

Edge in surgical treatment

Potential to earn USD 1 billion from medical travel

Medical Tourism

Cost of advanced surgeriesin India is attractively low compared to US

Cost Advantage

2,50,00030,000Bone Marrow Transplant

30,0005,000 - 7,000Heart surgery

5,00,00040,000Liver Transplant

IndiaTreatment

All figures in USD

US

March 2005

Low in cost

High on quality

Quality Advantage

Services and facilities in India

March 2005

Increase in 5% of GDP by 2010health spend

Increasing budgetary Over 20 % per annumallocation 2005

Union Budget Infrastructure status not conferred2005-06

Custom Tariff on Rates reduced from20% to 15%medical equipment

Policy Advantage

March 2005

Healthcare

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

Indian Healthcare Federationc/o Confederation of Indian Industry

23, Institutional AreaLodi RoadNew Delhi - 110 003.

Tel 00 91 11 2462 9994-97Fax 00 91 11 2462 6149/2461 5693E mail zakariah.ahmed@ciionline.org

Contact in India

March 2005