India’s Healthtech Sector Growing Faster Than Global Peers, But There’s A Catch

India’s healthtech sector has been attracting eyeballs from all over the globe, as its vast and diverse population and government focus on technology and infrastructure development hyped hopes for growth in the sector.

However, according to healthcare majors and professionals, delivering healthcare services to nearly 70% of Indians digitally remains a “big” challenge.

According to industry participants, healthtech service providers, which aim to make healthcare services easily accessible through technology across locations, are still finding it difficult to penetrate the rural belt, posing a wider gap between growth of telehealth services in urban and rural areas.

“Adoption of telehealth is growing in both rural and urban areas, but at different paces. The lack of healthcare infrastructure in rural areas is a major driver for telehealth adoption,” Kapil Tyagi, chief technology officer at Gurugram-based healthcare chain Artemis Hospitals, said in response to a questionnaire sent by NDTV Profit.

The adoption of telehealth and telemedicine in rural India remains a challenge due to a significant portion of the rural population being uninformed about telemedicine services, reflecting broader issues of digital literacy and accessibility, according to Vikram Thaploo, chief executive officer-telehealth at Apollo Hospitals Enterprises Ltd. 

“The heavy dependence on government-led healthcare services, combined with this lack of awareness, underscores the need for targeted education and training programs to facilitate telemedicine adoption,” Thaploo said.

In line with Thaploo’s view, MedLern, a leading digital health education provider flags slower growth of telehealth in the rural space as the biggest concern, citing lack of awareness and digital divide as the key reasons.

So far, telehealth and telemedicine services such as e-Sanjeevani, Practo and other private offerings cover about 20–30% of the Indian population, mostly residing in metropolitan areas, districts and cities, according to the data shared by Practo.

Practo further revealed that it saw robust sales growth of 50% in tier-2 and tier-3 cities, and 20% in metropolitan areas during the last fiscal. However, growth across rural region remained muted.

Hence, growth in telemedicine is largely concentrated to cities and metropolitan regions, even for over a decade-old companies like Practo and NetMeds. Apart from lack of awareness, literacy, and technological barriers, supply of poor quality drugs is another key concern, especially in the rural market.

“...there are risks associated with the dispensing of counterfeit or substandard medications, especially when prescriptions are fulfilled remotely,” said Deepak Sharma, co-founder and CEO at MedLern Pvt., a leading digital learning solution provider for hospitals and healthcare professionals.

According to Artemis Hospitals, there are many unregulated pharmacies and drug stores, and lack of proper storage and transportation facilities causing quality degradation, which lead to further hindrance towards growth in remote areas. The need for regulatory clarity and standardisation of telehealth practices is also important.

“While government initiatives like the National Health Digital Mission are a step in the right direction, the implementation of standardised regulations and guidelines across states remains inconsistent,” said Thaploo. There are also concerns around breach of data privacy and lack of skilled medical professionals, he said.

The Bright Future

However, growth prospects in India’s overall healthtech space look impressive, attracting more funds in the segment. According to the latest report by market intelligence platform Tracxn, total funding for Indian healthtech firms stood at $9.9 billion as of July 2024, sharply higher than $566 million in the US, and $130 million in Singapore.

Funds raised by Indian healthtech firms so far in 2024 were $707 million, higher than $362 million in 2023. However, the funds are substantially lower than the Covid-levels, from where the segment started gaining traction.

Medibuddy, Curefit, PharmEasy, HealthifyME and Practo are among the top-funded companies in the domain. The telemedicine market in India is expected to reach $5.5 billion by 2025, while the telehealth market may cross $9.5 billion by 2029.

According to industry participants, focus on digitisation and growing awareness about telehealth in cities, especially since the Covid-19 pandemic are key factors attracting more investors towards the overall healthtech space.

“...we saw a staggering 5 times growth in consultations (during pandemic), with thousands of patients seeking care daily, demonstrated a profound shift in patient behaviour,” said Practo’s spokesperson. “We've seen a 15% uptick in weekend appointments post Covid.”

Healthtech majors find the possibilities for telehealth in India truly exhilarating. According to industry participants, patients have already started using healthtech applications increasingly for consultations on varied health ailments, for better accessibility, and cost-effectiveness. Customers prefer online consultations in disciplines such as psychiatry, sexology, and dermatology.

“Looking ahead, the possibilities for telehealth in India are truly exhilarating. With the market poised for significant growth, we anticipate a surge in specialised telemedicine services, from chronic disease management to mental health care,” said Practo.

Moreover, according to industry leaders, the advent of artificial intelligence and advanced machine learning in the healthcare space is likely to “revolutionise” India’s healthtech space, from providing efficient treatment through AI-backed machines and tools, to providing virtual assistants through chatbots for timely response.

Healthcare majors are of the view that more awareness about healthtech, digital literacy, improved internet connectivity in rural areas, and advanced skill training for medical professionals is required to mitigate concerns around growth in healthtech.

“Addressing these challenges requires a multi-faceted approach, involving increased investment in digital infrastructure, comprehensive policy frameworks, enhanced cybersecurity measures, and continuous education and training for both healthcare providers and patients,” said Thaploo.