SAARC and India’s Healthcare Opportunities

Less than one fifth of all international tourists to India are from the SAARC countries. Yet, more than half of all foreigners who visit India for medical treatments are from SAARC countries. Together the two statistics imply that while India gains a lot more from rest of the world in the tourism sector, it gains significantly from SAARC countries in the healthcare sector. Therefore, an important opportunity for India within SAARC lies in the healthcare sector. India’s vision and policies for SAARC must build on this important opportunity.

Though India is yet to measure up to international standards of domestic healthcare, and majority of citizens – particularly in rural areas – still struggle for access to primary healthcare, most medical tourists come for tertiary care where India has emerged as a regional leader. Tertiary care involves specialized consultative care such as advanced diagnostic support services from specialized medical personnel. Healthcare as a sector in India is growing and so is India’s reputation for medical tourism and affordable drugs. The number of medical tourists in India grew by 30 percent between 2009 and 2011, and estimates suggest that India will receive nearly half a million medical tourists annually by 2015. These numbers reveal that the growing prospects of India’s medical tourism industry at the global level and the SAARC market, has definitely helped in enhancing India’s private medical infrastructure.

There are sixteen different medical procedures that attract tourists from SAARC countries to India, and a closer look at the data reveals that the maximum demand among these medical tourists is for eye care and cancer treatment. This is closely followed by neurology, plastic and cosmetic surgery, hair care and cardiology. With many nationally and internationally accredited healthcare facilities, India represents quality healthcare infrastructure within the SAARC region. While it is difficult for foreign patients with international referrals to access public healthcare system, several private sector hospitals have emerged as key service providers to this segment. These include Apollo Hospitals, Manipal Hospital, BM Birla Heart Research Centre, Sri Ganga Ram Hospital, Medanta, Narayan Hrudalaya and several others.

From the perspective of developing SAARC policies, there are several challenges that can be addressed while recognizing India’s contribution to medical services in the SAARC region. Some key areas for policy development must include a liberal visa regime, insurance and cross border payments, connectivity between countries and political relations between the SAARC countries.

The existing visa norms in India are arduous and impose tremendous pressure, particularly on people from neighboring countries. The medical visa has more restrictions and limited validity. This drives patients to destinations such as Thailand and Singapore, which have friendlier visa regimes. India can develop policies which make it easier for patients to receive medical treatment in India while contributing to the Indian economy beyond the health sector, for example the hospitality sector.

Insurance and cross border payments are a critical hindrance for international patients. Most Indian insurers do not cover international patients’ treatment within India, and several do not cover cross-border treatments. International insurers are prohibitively expensive even for the upwardly mobile population in the SAARC region. A solution to this can emerge though the creation of a regional insurance scheme which can cover treatment within the region. There are useful lessons from the experience of similar regional blocs such as Common Market of the South (MERCOSUR) in Latin America, which was created to promote regional payment arrangements including medical treatments across borders.

Strained political relations among some SAARC nations adversely affects their economies including the mobility of patients within the region. Improved relations with Pakistan will definitely result in a greater medical tourist flow into India, and patients in Pakistan greater access to quality healthcare. This would require a strong formal understanding between the governments of SAARC countries on the movement of patients and their escorts. This is fundamental to improving access to quality healthcare within the SAARC region and fulfilling the unexplored potential of medical tourism within the Indian economy.

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This chapter is a part of Brookings India’s briefing book, “Reinvigorating SAARC: India’s Opportunities and Challenges.” To view the preface and table of contents, click here.

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Shamika Ravi is a fellow with Brookings India in New Delhi and the Brookings Institution. She is also Visiting Associate Professor of Economics, Ashoka University and Research Affiliate, Financial Access Initiative, NYU. Her research is in the area of development economics with a focus on gender inequality and democracy, and financial inclusion, and health.

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