India's pharmaceutical sector - A Complete Study

India's pharmaceutical sector is gaining its position as a global leader. The pharma market in India is expected to touch US$ 74 billion in sales by 2020 from the current US$ 11 billion, according to a PricewaterhouseCoopers (PwC) report.

Growth of Indian pharma companies will be driven by the fastest growing molecules in the diabetes, skincare and eye care segment, as per a report by research firm, Credit Suisse. The market share of a drug company is directly related to the number of fast growing molecules in the company's pipeline, the report highlighted.

The Indian pharmaceutical market is poised to grow to US$ 55 billion by 2020 from the 2009 levels of US$ 12.6 billion, as per a McKinsey & Company report titled "India Pharma 2020: Propelling access and acceptance realising true potential". The industry further holds potential to reach US$ 70 billion, at a compound annual growth rate (CAGR) of 17 per cent.

Sector Structure/ Market Size

The Indian pharmaceutical market is expected to grow at a CAGR of 15.3 per cent during 2011-12 to 2013-14, according to a Barclays Capital Equity Research report on India Healthcare & Pharmaceuticals.

The outlook on the Indian pharmaceutical industry remains favourable, according to a report by ICRA and Moody's. Domestic formulation market stood at Rs 58,300 crore (US$ 10.54 billion) and has been ranked third in terms of volume and tenth in terms of value, globally. From 2011, trends are changing, MNCs are focusing on chronics, branded generics and launching patented products, besides expanding their field force and focusing on tier-II as well as tier-IV towns. Domestic market grew at 15 per cent, while pharma multinational companies (MNCs) revenue grew at 18.7 per cent.

Exports

India's exports of drugs, pharmaceutical and fine chemicals grew by 27 per cent to Rs 60,000 crore (US$ 10.85 billion) for the year ended March 2012, according to data compiled by Pharmaceutical Exports Council of India (Pharmexcil). Moreover, the size of the Indian formulations market, which currently stands at around Rs 62,000 crore (US$ 11.21 billion), is growing at 15-20 per cent annually.

"India-Brazil health and pharmaceutical collaboration holds the potential of being key contributor for assuring affordable healthcare for our people," as per Mr Anand Sharma, Union Minister for Commerce, Industry and Textiles. Mr Sharma further called for better understanding between the pharmaceutical regulatory regimes in the two countries.

The Export-Import (Exim) Bank of India has agreed to provide loans to fund the setting up of common infrastructure facilities at Sriperumbudur, Tamil Nadu, which will help boost exports of medicine products from India.

Growth

India will see the largest number of merger and acquisitions (M&As) in the pharmaceutical and healthcare sector, according to consulting firm Grant Thornton. A survey conducted across 100 companies has revealed that one-fourth of the respondents were optimistic about acquisitions in the pharmaceutical sector.

The cumulative drugs and pharmaceuticals sector attracted foreign direct investments (FDI) worth US$ 9,596 million between April 2000 to May 2012, according to the latest data published by Department of Industrial Policy and Promotion (DIPP).

Generics

India tops the world in exporting generic medicines worth US$ 11 billion. Currently, the Indian pharmaceutical industry is one of the world's largest and most developed, according to Mr Srikant Kumar Jena, Union Minister of State for Chemicals and Fertilisers.

Generics will continue to dominate the market while patent-protected products are likely to constitute 10 per cent of the pie till 2015, according to McKinsey report 'India Pharma 2015 - Unlocking the potential of Indian Pharmaceuticals market'. Hyderabad-based generic drug maker, Natco Pharma Ltd has launched a cheaper generic version of Bristol Myers Squibb's blood cancer drug Sprycel at a fraction of the innovator pricing. Natco launched Dasatinib at a pricing of Rs 9,000 (US$ 162.75) for a month's supply against Bristol pricing of around Rs 160,000 (US$ 2,893.31).

Multinational drug companies are showing a healthy growth in the Indian market setting a new trend. Out of 25 top medicine brands by sales last year, 13 were global drug major such as Pfizer, GSK and Novartis. Brand-building exercise is fast becoming more evident in a predominantly generic Indian medicine market, as per a market research entity AIOCD AWACS' report.

Diagnostics Outsourcing/ Clinical Trials

"The Indian healthcare devices market is part of our focus on emerging markets. The Hyderabad centre will enable us to improve product time to market and create valued-innovation," highlighted Robert Frechette, Vice-President (Engineering Services), Covidien. The value of the Indian medical devices market is estimated at US$ 4 billion, and is clocking a growth rate of 15 per cent annually, he added.

The Indian pharmaceutical companies can be of immense value in providing affordable healthcare, especially in countries such as Japan. India also has a vast pool of trained pharmaceutical scientists, doctors and researchers, which opens up avenues for joint collaborative research for new drug discoveries along with joint intellectual property rights (IPRs).

The clinical pharmacology unit of GVK Biosciences at Ahmedabad has cleared an audit conducted by US Food and Drug Administration (FDA). The facility carries out important scientific studies related to drug development for pharma customers (drug companies, research institutes, etc).

Investments

• Suven Life Sciences Ltd has got four product patents one each from Australia, Canada, Korea and New Zealand for their new drug molecules (New Chemical Entities). The new drug molecules are used for disorder treatment related to Neuro-degenerative diseases
• Aurobindo Pharma has received USFDA approval to manufacture and market montelukast sodium tablets and montelukast sodium chewable tablets for treatment of asthma in the US market
• US-based drug development player, CritiTech Inc has joined hands with Hyderabad-based formulation development services company, Finoso Pharma Pvt Ltd to set up a 50:50 joint venture (JV) - Finotech Pharma. The JV company is being set up with an initial investment of US$ 1 million
• Venus Remedies has secured its third US patent for its novel antibiotic product Potentox. The new drug is an antibiotic adjuvant entity and is considered effective in case of hospital acquired pneumonia and febrile neutropenia infections
• Israel's Teva Pharmaceutical Industries and Procter & Gamble (P&G) plan to enter India through a joint venture (JV) by setting up their first manufacturing facility at Sanand, Gujarat, with an initial investment of Rs 250 crore (US$ 45.21 million)
• Onco Therapies, a wholly owned subsidiary of Strides Arcolab, has received two USFDA approvals for 'Fluorouracil Injection USP'. Fluorouracil is a chemotherapy drug which interferes with cells making DNA and RNA, and stops the growth of cancer cells
• Mankind Pharma Ltd is set for a major turnaround over the next two to three years. "We are planning to launch 15-16 products in the chronic therapy segment this financial year", as per R C Juneja, CEO and Chairman, Mankind Pharma
• Venus Remedies Ltd has launched a nanotechnology based 'ready-to-use' single vial Docetaxel in the domestic market. The medicine will be an important tool in the cancer drug industry

Government Initiatives

The Union Budget for 2012-13 was announced by Mr Pranab Mukherjee, the Union Finance Minister. Highlights of Union Budget 2012-13:

• It is proposed to extend concessional basic customs duty of 5 per cent with full exemption from excise duty/CVD to six specified life-saving drugs/ vaccines. These are used for the treatment or prevention of ailments such as HIV-AIDS, renal cancer, etc
• Probiotics are a cost-effective means of combating bacterial infections. It is proposed to reduce the basic customs duty on this item from 10 per cent to 5 per cent
• Basic customs duty and excise duty reduced on Soya products to address protein deficiency among women and children. Basic customs duty and excise duty reduced on Iodine

Furthermore, a 'Pharma Vision 2020' has been prepared by the Department of Pharmaceuticals, for making India one of the leading destinations for end-to-end drug discovery and innovation and for that purpose, the department will provide requisite support by way of world class infrastructure, internationally competitive scientific manpower for pharma research and development (R&D), venture fund for research in the public and private domain and such other measures.

Road Ahead

On the back of increasing middle-class population base, improvements in medical infrastructure and the establishment of IP rights, the Indian pharma industry is estimated to grow manifolds.

"India is a unique market, always very intriguing. India presents challenging paradigms and gives tremendous opportunities. I see the healthcare sector as one of the biggest business opportunities," as per Terri Bresenham, President and CEO, GE Healthcare India, and MD, Wipro GE Healthcare. India is the first country to have a large number of multinational healthcare providers, added Bresenham.

Pharmaceutical companies such as Cipla, Ranbaxy, Dr Reddy's Labs and Lupin might soon be part of the government's ambitious 'Jan Aushadhi' project. In an attempt to commercialise the project, the government is likely to rope in the private sector to bulk-procure generic drugs from them. There are 117 Jan Aushadhi stores across the country and the plan is to expand to at least 600 in the next two years and 3,000 by 2016.

Exchange rate used INR 1= US$ 0.01808 as on August, 2012

References: Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP), Press Information Bureau (PIB), Media Reports, McKinsey Report, Pharmaceuticals Export Promotion Council

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T20 Global MBA PROGRAMMES 2011: ECONOMIST SURVEY

Media and Entertainment

Media and Entertainment

Media and Entertainment (M&E) is one of the fastest growing sectors in India. The sector consists of creation, aggregation and distribution of content, products and services, news and information, advertising and entertainment through various channels and platforms.

The industry is taking initiatives like regional content and distribution platforms (digital, non-digital and mobile) to enhance customer experience as well as monetize content. New technologies such as 3G, broadband and mobile infrastructure are also helping in propelling the growth rate.

The Indian economy grew at a faster pace in 2010 compared to 2009, which translated into more advertising as well consumer spending. This high growth rate will continue to remain in 2011 as well. The Indian advertising industry will grow by 17 per cent in calendar year 2011 and is expected to add about US$ 889 million to the existing ad pie worth US$ 5248 million, according to Pitch Madison Media Advertising Outlook 2011. This robust growth in advertising industry will benefit the M&E industry in 2011 as well.

The entertainment industry in India is estimated at about US$ 9.4 billion in revenues in year 2010, which is expected to grow at a rate of 14.1 per cent to reach revenues of US$ 10.7 billion in 2011.

Television

The television industry is expected to grow by 12.9 per cent cumulatively over 2009-14. The maximum growth is slated to occur in 2010 (15.6 per cent), followed by 2012 (13 per cent), according to a report by PricewaterhouseCoopers (PwC).

The television industry is expected to grow above 20 per cent in 2011. Two important cricket events - World Cup and the Indian Premier League (IPL) - are expected to boost the television advertising revenue. Cricket is expected to earn advertising revenue of US$ 405 million from its television telecast this year, up from US$ 337 million in 2010.

The direct-to-home (DTH) market in India had 23.1 million active subscribers by the end of 2010, as per Media Partners Asia. This amounts to 16 per cent penetration of television homes in India.

With advertisement revenues strengthening, M&E players are aggressively entering the television (TV) broadcasting space. Broadcasters have added 444 television channels in the last five years with over 100 channels getting added in 2010 alone. Last year saw the second highest additions of television channels in the decade after 2008 which saw a record permission for 152 channels.

The Ministry of Information and Broadcasting has granted permission to 39 channels including nine high definition (HD) channels from Star India, ESPN and Sun TV network in December 2010 and January 2011.

In the next twelve months, television's ad revenue is slated to grow by 20 per cent to add. The TV ad revenues will touch a total of US$ 2804.3 million) in 2011, according to Pitch Madison Media Advertising Outlook 2011. (as on March 2011).

The report also projects that TV will remain the highest grosser of revenues in 2011 too. It is expected to corner 45.7 per cent of the total ad pie this year, a further rise from 44.5 per cent in 2010.

Times Network, Sahara Group, Colors and newspaper company Matrubhumi are planning the launch of their new TV channels. AETN18 also received Foreign Investment Promotion Board (FIPB) approval for the launch of specialized channels in India. Reliance Broadcast has initiated a buyout of Turner-controlled Bollywood music channel Imagine Showbiz.

Music

The music industry in India has always been dominated by film music, which contributes to 15 per cent of a film’s earning. The industry is expected to grow at a CAGR of 28.6 per cent over 2010-14, reaching US$ 567.6 million in 2014, reports PwC.

With the advent of new technologies such as 2G and 3G, and incresing mobile penetration India’s music industry is scaling on a high note. Handset major Nokia launched its music store in India; Hungama announced the launch of two portals - Hungama.com and Artistaloud and Saregama too launched its music portal.

Radio

The Radio industry is now in the Phase III licensing stage which will take its station numbers to 700 from the current 250.

In 2011, the radio industry is expected clock revenues of US$ 226 million, as per the Pitch Madison Media Advertising Outlook 2011.

The radio advertising industry is projected to grow at a CAGR of 12.2 per cent over 2010-14, reaching US$ 342.7 million in 2014 from the present US$ 192.8 million in 2009, as per PwC.

Cinema

India is the largest film producing market in the world with over 1,000 films released every year and 3.7 billion tickets sold annually.

The Indian film industry is set to top revenues of US$ 3.3 billion by 2010 as it rides new technologies and a booming economy set to expand at the rate of 18 percent per year. It is also one of the largest employment sectors in the country. The government of India gave the motion picture industry the status of an industry in 2001, making it easier for film producers to obtain institutional financing.

According to PwC, the industry is projected to grow at a CAGR of 12.4 per cent, reaching US$ 3.65 billion in 2014 from US$ 2.03 billion in 2009.

Advertising

The Indian advertising industry will grow at 17 per cent to clock US$ 6136.2 million in 2011, reported by Pitch Madison Media Advertising Outlook 2011.

The print media generated advertising revenue of US$ 2.2 billion, growing at 28 per cent compared to 2010; while television advertising generated US$ 2.34 billion, grabbing the biggest share of 44.5 per cent of the entire advertising pie. The Out Of Home (OOH) advertising medium grew by 27 per cent in 2010, commanding US$ 320 million of the total ad spends. Radio advertising too has grown by 30 per cent to become a US$ 199 million industry.

Internet penetration in India reached an all time high with 50 million plus connections in 2010. As per Internet and Mobile Association of India (IAMAI), the total Online Advertising market of India is estimated at US$174 million for the year FY2009-10 and is expected to grow to US$220 million in year FY2010-11. The internet market is currently dominated by display ads and is expected to remain so for the next year. Total Display advertising market of India in year 2009-10 is estimated at US$ 92.5 million and is expected to grow by 28 per cent to reach US$ 118 million in year 2010-11. Total text advertising market of India in year 2009-10 is estimated at US$ 81 million and is expected to grow by 25 per cent to reach US$ 102 million in year 2010-11. Banking, Financial Services and Insurance (BFSI), Travel and Online Publishers - the top three text advertisers of FY 10 are expected to continue to lead text based advertisers in FY11 as well.

Theatre

Midvalley Entertainment Ltd., a media and entertainment company, recently raised US 13.4 million through an IPO. The company has plans to invest US$ 3.3 million of the amount in screening agreements with 300 cinema theaters in Tamil Nadu, Andhra Pradesh and Karnataka, while US$ 5.8 million will be invested in the renovation and upgrade of cinema infrastructure with digital equipment and other related assets for select 100 screens in South India.

Multiplex chain Cinemax plans to add 30 digital screens to its existing 105 screens across India in the next six to eight months, most of which will be located in western and southern states. The investments for the 30 screens will be in the tune of US$ 10 million.

PVR Cinemas presently runs about 142 screens at 32 locations across 18 cities in India and plans to open another 80-100 screens in FY 12 in at least 27 cities, at an investment of US$ 22-26 million.

Digital Media

The Information and Broadcasting (I&B) Ministry has accepted a proposal by Telecom Regulatory Authority of India (TRAI) to make broadcasting operations completely digital. The timeline decided for closing the analog cable distribution has been decided for March 2015. A report by ICRA states that the industry requires an investment of US$ 3.37 billion to go for the digital system.

India is the third biggest Internet market, with over 100 million internet user base and the amount of time spent on the Internet for an average user in the country is 16 hours a week. According to Google estimates, 40 million users access Internet through mobile phones and download 30 million applications.

Print and Publishing

The newspaper market in India has grown at 13 per cent compound annual growth rate (CAGR) over the last five years to US$ 3.9 billion in 2010 will continue on its growth trajectory at an estimated CAGR of around 12 per cent between 2010 and 2013 to reach US$ 5.9 billion in 2013, according to Ernst & Young India,.

As per the Indian Readership Survey (IRS) for the third quarter of 2010, conducted jointly by the Media Research Users Council (MRUC) along with research firm Hansa Research Group Pvt Ltd, Dainik Jagran, published by Jagran Prakashan, continues to be the most preferred newspaper in the country..

Amar Ujala, which launched an NCR edition in February 2011, is the No 4 newspaper according to IRS Q4, 2010. It has lost a marginal 125 thousand readers and its total readership is down from 29.7 million to 29.6 million. The No 1 Bengali daily, Anandabazar Patrika is at No 10. The Times of India, India's No 1 English daily, continues to be at No 11 with a total readership of 13.8 million. It had gained 114 thousand readers in Q3, 2010, while in the Q4, it has added 204 thousand readers.

In Mumbai, the average issue readership (AIR) has grown from 6,06,000 to 6,27,000. Total Readership (TR) across all Hindustran Times editions have risen from 63,33,000 to 64,57,000. In Mumbai, the TR figures have increased to 9,73,000 from 9,43,000 in Q3.

Foreign investment, including foreign direct investments (FDI) and investment by non-resident Indians (NRIs)/person of Indian origin (PIO)/foreign institutional investor (FII), up to 26 per cent, is permitted for publishing of newspapers and periodicals dealing with news and current affairs under the Government route.

FDI policy for publication of Indian editions of foreign magazines dealing with news and current affairs is:

• Foreign investment, including FDI and investment by NRIs/PIOs/FII, up to 26 per cent, is permitted under the Government route.
• 'Magazine', for the purpose of these guidelines, will be defined as a periodical publication, brought out on non-daily basis, containing public news or comments on public news.
• Foreign investment would also be subject to the Guidelines for Publication of Indian editions of foreign magazines dealing with news and current affairs issued by the Ministry of Information and Broadcasting (I&B) on Publishing/printing of Scientific and Technical Magazines/specialty journals/ periodicals 100 per cent FDI is permitted under the Government route.

Publication of facsimile edition of foreign newspapers:

• FDI up to 100 per cent is permitted under Government route in publication of facsimile edition of foreign newspapers provided the FDI is by the owner of the original foreign newspapers whose facsimile edition is proposed to be brought out in India
• Publication of facsimile edition of foreign newspapers can be undertaken only by an entity incorporated or registered in India under the provisions of the Companies Act, 1956
• Publication of facsimile edition of foreign newspaper would also be subject to the Guidelines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile edition of foreign newspapers issued by Ministry of Information & Broadcasting on 31.3.2006, as amended from time to time.

Government Policies

The Ministry of Information and Broadcasting (MIB) has set up a committee to assess the current rating system for television rating points (TRP) of TV programs and has expressed concern over this current system of evaluation. The MIB has recommended increasing the sample size and switching to a more scientific approach for accurate data.

It has also proposed an increase in the sample size from 8,000 homes to 15,000 urban and rural households over a period of two years. It further recommends that this figure should increase to 30,000 over the next three years, covering urban areas, rural areas and small towns as well as Jammu and Kashmir and the North-Eastern States, to provide complete geographical coverage of the country.

Source: ibef

India lower than China

India lower than China in English proficiency ?

Now, this information has definitely taken everyone by surprise – Isn’t India known globally for its large English speaking population ? Infact, that is one of the main reasons why IT services has seen such tremendous growth in India over past decade or so.

However, when I came across recently released EF EPI [Education First – English Proficiency Index], I was literally stunned. According to the EF EPI rankings, India is ranked lower than China in English Proficiency. While China ranks at 29th, India is ranked at 30th in the world for English language proficiency!

What is even more surprising is that countries like South Korea and Japan are ranked much higher than India. Among all the Asian countries, Malaysia ranks the highest and is even amongst the Top 10 most English proficient countries in the world. I had visited Japan (ranked 14th) few months back and I was in Tokyo. In my nearly 4 day stay, the biggest hurdle I faced was English. I just could not converse with any locals in English…at all!

On the contrary, if you visit any city or large town in India, you will always find people who know English – even if it is broken (with a real big Indian accent!).

If you go through the entire report of EF EPI – you will find no real reasoning for why India ranks so low in proficiency. Here is what the report says:

Asia’s English proficiency scores show that reputations are not always accurate. Take for example the nearly equivalent scores of China and India. Despite its British colonial legacy and reputation as an English-speaking nation, India is today no more proficient in English than rapidly improving China.

Indeed, although it is very difficult to measure the number of people who speak English in each country because of different definitions of proficiency, the British Council estimated in 2010 that India had anywhere between 55 and 350 million English speakers while a report published by Cambridge University Press estimates that China has 250 to 350 million English learners.

It appears that China is poised to surpass India in the number of English speakers in the coming years, if it has not already done so.

We always take such surveys and reports with a pinch of salt. Although the numbers are never accurate, they do tend to give the general representation of ground realities. However, this report seems to give the consensus is opposite direction.

The report also gives very vague idea of what methodology was used – The report simply says:

The index uses a unique set of test data from over two million adults who took free online English tests over a period of three years.

India probably has the most number of proficient English speaking people in Asia. There are many simple points which can prove that. Take for example the number of English Dailies in India and number of people who consume it. In Japan, you will not find more than 3-4 English dailies. I am not too sure of China, but I doubt if people read English dailies there. While in India, we have probably 15 – 20 major English Newspapers. Similarly, how many English TV channels does China or Japan have? We in India probably have more than 100 !

INDIA: Tourism and hospitality

Tourism and hospitality

As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country. India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

Contribution to the economy

Combining unparalleled growth prospects and unlimited business potential, the industry is certainly on the foyer towards being a key player in the nation's changing face. Furthermore, banking on the government’s initiative of upgrading and expanding the country’s infrastructure like airports, national highways etc, the tourism and hospitality industry is bound to get a bounce in its growth.

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.24 billion from April 2000 to November 2010, according to the Department of Industrial Policy and Promotion (DIPP).

India’s hotel pipeline is the second largest in the Asia-Pacific region according to Jan Smits, Regional Managing Director, InterContinental Hotels Group (IHG) Asia Australasia. He added that the Indian hospitality industry is projected to grow at a rate of 8.8 per cent during 2007-16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open-sky policies made by the government are all aimed at propelling growth in the hospitality sector.

Foreign Tourist Arrivals

Ministry of Tourism compiles monthly estimates of Foreign Tourist Arrivals (FTAs) in India and Foreign Exchange Earnings (FEE) from tourism on the basis of data received from major airports. Following are the important highlights, as regards these two important indicators of tourism sector for 2010 and December 2010.

• FTAs in India during 2010 were 5.58 million with a growth rate of 9.3 per cent as compared to the FTAs of 5.11 million during 2009.
• FTAs during the December 2010 was 6,55,000 as compared to FTAs of 6,46,000 in December 2009 and 5,34,000 in December 2008.
• FEE from tourism during 2010 were US$ 14,193 million as compared to US$ 11.39 billion during 2009 and US$ 11.74 billion during 2008. The growth rate in FEE in US$ terms during 2010 was 24.6 per cent.
• FEE from tourism during the month of December during 2010 were US$ 1.55 billion.

Government Initiatives/policy

According to the Consolidated FDI Policy, released by DIPP, Ministry of Commerce and Industry, Government of India, the government has allowed 100 per cent foreign investment under the automatic route in the hotel and tourism related industry. The terms hotel includes restaurants, beach resorts and other tourism complexes providing accommodation and /or catering and food facilities to tourists.

The term tourism related industry includes:

• Travel agencies, tour operating agencies and tourist transport operating agencies
• Units providing facilities for cultural, adventure and wildlife experience to tourists
• Surface, air and water transport facilities for tourists
• Convention/seminar units and organisations

T

he Government of India has announced a scheme of granting Tourist Visa on Arrival (T-VoA) for the citizens of Finland, Japan, Luxembourg, New Zealand and Singapore. The scheme is valid for citizens of the above mentioned countries planning to visit India on single entry strictly for the purpose of tourism and for a short period of up to a maximum of 30 days. During 2010, a total number of 6549 Visa on Arrivals (VoA) were issued under VoA Scheme.

The tourism master plan, the first for Karnataka, envisages initiatives to attract private investment ranging from US$ 2.2 billion to US$ 4.4 billion in the next three to five years. The plan is prepared based on the Vision 2020 document prepared and adopted by the Karnataka State Planning Board. The state government aims to generate 200,000 jobs in the tourism sector in the next five years. The master plan is aimed at making Karnataka the number one destination for tourism in the country by 2020.

As per the press release by Press Information Bureau (PIB) dated November 15, 2010, the Union Ministry of Tourism has included Medical Tourism under the Marketing Development Assistance (MDA) Scheme. The Ministry of Tourism has sanctioned US$ 27,742 as MDA to 10 Medical Tourism Service Providers during current year.

The Ministry of Tourism has sanctioned 781 projects in 34 States/ Union Territories (UTs) in the country amounting to US$ 511.82 million during the last three years up to June 2010, as per a press release dated October 18, 2010.

The Ministry of Tourism has won a PATA Grand Award and two PATA Gold Awards during the Pacific Asia Travel Association (PATA) Travel Mart 2010 in Macau. The PATA Grand Award was given under the Heritage category for the Rural Tourism Project at Hodka village in Kutch District of Gujarat.

Medical Tourism

As per a market research report ‘Booming Medical Tourism in India’ by RNCOS, India’s share in the global medical tourism industry will reach around 3 per cent by the end of 2013. Moreover, medical tourism is expected to generate revenue worth US$ 3 Billion by 2013, growing at a CAGR of around 26% per cent during 2011–2013. The number of medical tourists is anticipated to grow at a CAGR of over 19 per cent during the forecast period to reach 1.3 Million by 2013.

Factors such as, low cost, scale and range of treatments provided by India differentiate it from other medical tourism destinations. The growth in India’s medical tourism market will be a boon for several associated industries, including hospital industry, medical equipments industry and pharmaceutical industry.

Domestic medical tourism in the country has also seen growth in the recent years. As per the report ‘Domestic Tourism in India, 2008-09’ released by the National Sample Survey Office (NSSO), trips for ‘health and medical’ purposes formed 7 per cent of overnight trips in the rural population and about 3.5 per cent in the urban population. ‘Health and medical’ purposes accounted for 17 per cent of same-day trips in rural India and 8 per cent in urban India. Expenditure on medical trips accounted for 30 per cent of all overnight trip expenditure for rural India and 15 per cent for urban.

R

ecently, the Union Ministry of Tourism has included Medical Tourism under the Marketing Development Assistance (MDA) Scheme. The Ministry of Tourism has sanctioned US$ 27,400 as MDA to 10 Medical Tourism Service Providers during 2010.

Hospitality

The current count of hotel rooms is 130,000, and the country is expected to require an additional 50,000 rooms over the next two to three years, according to World Travel and Tourism Committee (WTCC) estimates

• US-based hotel chain, Marriott International, plans to expand its network in India to 100 hotels over the next five-years, stated Arnie Sorenson, Chief Operating Officer, Marriott International. At present, the group operates 11 properties across the country.
• Roots Corporation, a subsidiary of Indian Hotels Company (IHC), plans to open 60 to 70 budget hotels, known as Ginger Hotel, in 23 locations across the country.
• ITC, the Kolkata-based cigarette major, also projected its plan to open 25 new hotels under the Fortune brand over the course of next 12-18 months (or by 2011).

The Road Ahead

The Indian hospitality sector is certainly the most apt replication of the belief 'Atithi devo bhava'- touch of tenderness, a helping hand and a welcoming visage.

According to the Tourism Satellite Accounting (TSA) research, released by World Travel and Tourism Council (WTTC) and its strategic partner Oxford Economics in March 2010:

• The contribution of travel and tourism to Gross Domestic Product (GDP) is expected to increase from 8.6 per cent (US$ 117.9 billion) in 2010 to 9.0 per cent (US$ 330.1 billion) by 2020.
• Export earnings from international visitors and tourism goods are expected to increase from US$ 11.1 billion in 2010 to US$ 33.6 billion in 2020.
• Travel and tourism investment is estimated at US$ 34.7 billion or 7.2 per cent of total investment in 2010. By 2020, this should reach US$ 109.3 billion or 7.7 per cent of total investment.

Ministry of Tourism aims to create a comprehensive and coordinated framework for promoting golf tourism in India, capitalising on the existing work that is being carried out, and building upon the strength of India’s position as the fastest growing free market economy.

Exchange rate used: 1 USD = 45.46 INR (as on January 2011)

Disclaimer: This information has been collected through secondary research