Fdi in Indian Health Sector
FDI IN INDIAN HEALTH SECTOR
Healthcare sector has a great potential in the present globalized world. It is one of the world's largest industries with total revenues of approximately US$ 2.8 Trillion. Healthcare sector has been emerging as one of the largest service sector in India. Indian healthcare sector has estimated revenue of around $ 30 billion constituting 5% of GDP and offering employment to around 4 million people (CII Report 2011). According to Investment Commission of India, the sector has witnessed a phenomenal expansion in the last few years growing at over 12% per annum. As per a recent CII-McKinsey report, the growth of healthcare sector can contribute to 6-7% of GDP and increase employment by at least 2.5 million by 2012.
Since January 2000, FDI is permitted up to 100 percent under the automatic route in hospitals in
India. Thus no government approval is required as long as the Indian company files with the regional office of the RBI within 30 days of receipt of inward remittances and file the required documents along with form FC-GPR with that Office within 30 days of issue of shares to the non-resident investors.6 Controlling stake is also permitted in hospitals for foreign investors.
FIPB (Foreign Investment Promotion Board) approval is currently only required for foreign investors with prior technical collaboration,but is allowed up to 100 percent.
In recent years, there is growing interest among foreign players to enter India’s healthcare sector through capital investments, technology tie-ups, and collaborative ventures across various segments, including diagnostics, medical equipment, hospitals, and education and training.
Some of the reasons for it are as under:
* According to a report by PriceWaterhouseCoopers, an estimated 189 million people in the country will be more than 60 years of age by 2025, needing higher healthcare spends. * The Indian healthcare sector is expected to reach US$ 100 billion by 2015
Healthcare sector has a great potential in the present globalized world. It is one of the world's largest industries with total revenues of approximately US$ 2.8 Trillion. Healthcare sector has been emerging as one of the largest service sector in India. Indian healthcare sector has estimated revenue of around $ 30 billion constituting 5% of GDP and offering employment to around 4 million people (CII Report 2011). According to Investment Commission of India, the sector has witnessed a phenomenal expansion in the last few years growing at over 12% per annum. As per a recent CII-McKinsey report, the growth of healthcare sector can contribute to 6-7% of GDP and increase employment by at least 2.5 million by 2012.
Since January 2000, FDI is permitted up to 100 percent under the automatic route in hospitals in
India. Thus no government approval is required as long as the Indian company files with the regional office of the RBI within 30 days of receipt of inward remittances and file the required documents along with form FC-GPR with that Office within 30 days of issue of shares to the non-resident investors.6 Controlling stake is also permitted in hospitals for foreign investors.
FIPB (Foreign Investment Promotion Board) approval is currently only required for foreign investors with prior technical collaboration,but is allowed up to 100 percent.
In recent years, there is growing interest among foreign players to enter India’s healthcare sector through capital investments, technology tie-ups, and collaborative ventures across various segments, including diagnostics, medical equipment, hospitals, and education and training.
Some of the reasons for it are as under:
* According to a report by PriceWaterhouseCoopers, an estimated 189 million people in the country will be more than 60 years of age by 2025, needing higher healthcare spends. * The Indian healthcare sector is expected to reach US$ 100 billion by 2015