Apollo Hospitals Managing Director Suneeta Reddy has highlighted the potential of India's healthcare tourism sector to mitigate the effects of US tariffs on India. Speaking at the 52nd National Management Convention of AIMA, Reddy outlined a significant opportunity in the healthcare tourism market.

$100 Billion Opportunity in Healthcare Tourism

Reddy pointed to a substantial $100 billion opportunity in the healthcare tourism sector. She suggested that if India could capture 20% of this market, it could generate $20.00 billion by 2030, potentially offsetting losses incurred from US tariffs through medical value travel.

India's Competitive Edge in Healthcare

The Apollo Hospitals MD emphasized India's advantages in the global healthcare market:

• Premium healthcare infrastructure
• Clinical outcomes delivered at one-tenth of international costs
• Potential to attract patients from countries lacking advanced healthcare systems

Call for Better Connectivity

To fully leverage this opportunity, Reddy advocated for improved connectivity with countries that have less developed healthcare systems. This strategic move could position India as a preferred destination for medical tourism.

GST Reforms and Economic Impact

Reddy also touched upon several economic factors affecting the healthcare sector:

1. GST Input Cost Reforms: She called for reforms in GST input costs for the healthcare sector, similar to those implemented in the education sector.

2. Recent GST Rate Cuts: Reddy welcomed the recent reductions in GST rates, linking them to increased consumer spending on insurance, education, and health.

3. Personal Income Tax Reductions: She noted that cuts in personal income tax have contributed to higher consumer spending in key areas, including healthcare.

4. Infrastructure Cost Reduction: Reddy pointed out that GST cuts on construction materials such as bricks, granite, and marble would help reduce healthcare infrastructure costs.

These economic measures, according to Reddy, could further boost India's competitiveness in the global healthcare market and support the growth of medical tourism.

As India's healthcare sector continues to evolve, Apollo Hospitals' strategic vision aims to position the country as a global healthcare destination, potentially creating a new avenue for economic growth and offsetting challenges in other sectors.

The Goods and Services Tax (GST) Council has made a significant decision that could reshape the landscape of healthcare accessibility in India. The council has exempted health insurance premiums from indirect tax, a move that industry leaders believe will make insurance more affordable and expand coverage across the country.

Impact on Health Insurance

Apollo Hospitals Managing Director Suneeta Reddy commented on the development, stating that the exemption of health insurance premiums from GST would likely make insurance more affordable. This change is expected to lead to wider coverage, potentially improving access to healthcare for a larger segment of the population.

Broader GST Reforms

The health insurance exemption is part of a broader set of GST reforms announced by the council. These reforms include:

• Scrapping the 12% and 28% tax slabs
• Introducing 5% and 18% rates
• Implementing a 40% rate for sin goods

Changes in Healthcare-Related Taxes

Several changes in the GST structure are set to impact the healthcare sector:

• Life-saving cancer and chronic care drugs: GST reduced from 12% to 0%
• Most other medications: 5% GST
• Hospital consumables, diagnostics, reagents, and bandages: Moved to 5% GST

Potential Impact on Hospital Infrastructure

The GST Council's decisions may also indirectly benefit hospital infrastructure:

• Construction materials like cement, fly ash, and granite will see rate cuts
• This could potentially lower hospital infrastructure costs
• May encourage capacity expansion in the healthcare sector

Long-term Effects on Healthcare Costs

While immediate reductions in hospital bills are not expected due to the lack of input tax credit for hospitals, Reddy noted that the rationalization of input costs should gradually make healthcare more affordable. Cancer care, in particular, is expected to see significant benefits from these changes.

Conclusion

The GST Council's decision to exempt health insurance premiums from indirect tax, along with other healthcare-related tax adjustments, marks a significant step towards making healthcare more accessible and affordable in India. While the full impact of these changes may take time to materialize, the healthcare sector is likely to see positive transformations in terms of insurance coverage, drug affordability, and potentially, infrastructure development.