India is emerging as a pivotal player in the Asia-Pacific healthcare sector, drawing substantial investments and propelling growth across various domains, according to Bain & Company's 13th annual Global Healthcare Private Equity and M&A report. The Asia-Pacific region witnessed deals totaling around $14 billion, with India capturing the largest share of the announced deal value. The nation continues to witness a sustained increase in biopharma-related activities.
In 2023, India is poised to host 22 healthcare deals, reaching a deal value of $4.6 billion, closely following the $4.7 billion recorded in 2022. This robust performance underscores India's economic resilience, business-friendly governmental policies, and a pharmaceutical manufacturing landscape that holds a top-three global position in small molecule and generic manufacturing, as highlighted in the report.
The burgeoning middle class in India plays a crucial role in catalyzing a significant surge in healthcare expenditure. This upward trend is fueled by increasing disposable incomes, the proliferation of insurtech platforms, and the active presence of private payers, according to the report. Projections suggest a sustained growth trajectory in healthcare spending, showcasing the sector's increasing importance in India's evolving economy.
India's pharmaceutical sector, supported by government policies and a skilled talent pool, stands at the forefront of global pharmaceutical manufacturing. The country caters to 50% of global vaccine needs and holds a strategic position in small molecule and generic manufacturing, the report notes.
Private equity investors, including Advent International, Carlyle, and PAG, have seized opportunities in this growth, expanding into pharma services such as Contract Development and Manufacturing Organizations (CDMOs) and Active Pharmaceutical Ingredients (APIs), the report further highlights.
The rise of biologics as impending generics indicates a potential shift in the sector. However, China's dominance in generics, leveraging expertise in microbiology, remains a competitive edge for the region.
Despite historically serving as the backend for US- and Europe-focused healthcare data and analytics companies, India has experienced a recent surge in direct-to-consumer digital health enterprises, particularly notable in fitness, wellness, telemedicine, and insurtech. Despite a temporary reduction in deal activity, Indian firms at the healthcare-tech nexus are benefiting from robust fundamentals driven by a digitally enthusiastic youthful population, according to the report.