Health Tourism : An Emerging Industry In India

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Health tourism or medical tourism relates to travel associated with medical treatment, rejuvenation and undergoing wellness therapies. Although, the term is used largely in the context of cross-border travel, it could also be used to signify domestic travel especially where cities/towns have emerged as healthcare hubs.

Many are uncomfortable with the use of the word ‘tourism’ along with ‘health’. They question whether a patient travelling to avail of treatment can at all be termed a ‘ tourist’ . As a tourism expert puts it, ‘I wonder if an ill person or a patient can ever become a tourist. Tourism is not always about money but it is definitely about joy, peace and leisure. Imagine a person whose sole focus is on treatment or better health- would he hop on from one place to another exploring and discovering a destination? Those who actually come to the country with health problems concentrate on that aspect alone. So, it might be a gainful proposition for the healthcare industry but certainly not for the tourism industry.’

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Origin of Health Tourism

The history of medical tourism dates back to remote past. In ancient Greece, patients and pilgrims used to come from the Mediterranean to visit the sanctuary of the healing God, Asklepios, situated at Epidaurus. In Roman Britain, at a shrine at bath, patients took water and the practice was on for nearly 2,000 years. Egypt was a centre for medical tourism, particularly for the wealthy Europeans, who used to visit spas at Nile, traveling a long way from Germany. In the earlier days, particularly, early 19th century, free

mobility helped people to roam around to the neighboring countries for health improvement. Besides, at that point of time, traveling was considered as an important mental as well as physical therapy. The picture changed at the end of 20th century. The concept of liberalization and globalization opened the floodgate of mobility for people to different countries. In the 21st century, the lower cost of air travel helped the medical tourism business to flourish, as it became reachable to the middle class, the so called unwealthy section of the population. Still it was the cup of tea for the wealthy people who used to visit tourist spots such as Alps, Swiss Lakes and also at the same time special tuberculosis sanatoriums, particularly for medical check-up by the specialized persons and professionals. In the modern age, countries like Thailand, Singapore, Malaysia, India, Argentina, Cuba and Puerto-Rico have emerged as popular destinations for medical tourism. These places are famous for varuious healthcare treatments like organ transplantation, dental care, eye surgery, heart treatment, sex change and many more. The medical tourism industry is growing at a rapid pace and it can be visible from the fact that in 2002, almost six hundred thousand patients visited the medical centers in cities like Bangkok Phuket and Thailand. Approximately, hundred and fify thousand patients from various foreign countries visited India in the same year .

Current Scenario of Health Tourism in India

According to the world tourism indicators , number of international tourists reached the mark of 700 million where the arrival was particularly limited to Asia and Pacific which is about 18.7 percent of the total. Europe experienced the highest number of tourists and India was not in the picture at the time.Medical tourism industry started to boom in India from the starting of the 21St century .It was approximately that about 1,50,000 patients visited India in 2004.

The study conducted by Confederation of Indian Industry (ClI) and McKinsey shows that by 2012, the medical tourism business in India will reach the height of $ 1billion per annum. ClI has predicted that India has the potential ro attract 2 million foreign patients every year that could generate an earning of $ 5 billion per year.

It has been envisaged by the Government of India that Indian healthcare industry can achieve the double-digit growth rate for the next few years. This projection was based upon an assumption that around six hundred thousand foreign patients will travel to the country for medical treatment from European region, Australia and USA. The study conducted by Cll also reveals the fact that the medical tourism industry in India has grown at a pace of 15 percent per annum.

Indía as Health Tourism Destination – Advantages

India has been an area of tourist destination for the people around the world for a prolonged period of time. The scenic beauty, rich spiritual and cultural heritage were the reasons which attracted foreign tourists to India to know its people, its rich culture, to get an idea about the society and its long history. India, was a well- known destination for all these since a long time, but recently, has captured a space on the world map for its improvement in medical care, both in terms of cost effectiveness and in terms of quality healthcare. Usually, healthcare system is complicated and costly in the developed countries like USA, UK and in other European countries. In such a situation, patients from these countries and also from many other Asian countries move towards countries like Thailand, Singapore and India, particularly for the cost effective quality treatment. Compared to the developed countries, in India complicated surgical procedures can be completed at one-tenth cost. Besides, well-equipped hospitals and procedural price advantages are supported by itlower medication cost.

India’s Advantages -First World Healthcare at Third-world Prices

In the beginning of the 21st century, India was oné of the leading countries to attract a large pool of medical tourists. In the international market, it lagged behind Thailand, which had attracted about one million medical tourists during the same period. In the late 1980s and early 1990s, most medical travellers coming to India were from the Arab countries, Africa and Southeast Asia. However, by 2003, India had attracted tourists from all over the world. Most of the medical tourists to India were Indians living in UK and US, residents of neighbouring countries like Pakistan, Nepal, Bangladesh, Mauritius and the Maldives and citizens of African and West Asian countries. Analysts opined that private hospitals in India were equipped with state-of-the-art medical infrastructure and a talented group of highly qualified doctors, which made it possible to offer world-class treatment at reasonable prices. As the treatment and the infrastructure at these hospitals were comparable with leading hospitals in the Western countries and the cost of medical treatment was much lower compared to the western countries, India emerged as a world-class healthcare destination with the added lure of a holiday.

Government Patronage and Subsidy -:

The National Health Policy, 2002, makes it clear that government policy supports medical tourism: ‘To capitalize on the comparative cost advantage enjoyed by the domestic health facilities in the secondary and tertiary sector, the policy will encourage the supply of services to patients of foreign origin on payment. The rendering of such services on payment in foreign exchange will be treated as ‘deemed exports ‘ and will be made eligible for all fiscal incentives extended to export earnings.’ Interestingly , this formulation draws from recommendations in the Policy framework for reforms in health care, drafed by the Prime Minister’s Advisory Council on Trade and Industry headed by Mukesh Ambani and Kumaramangalam Birla.

According to the industry estimates, the medical tourism market in India was valued at over $310 million in 2005-06 with 1 million foreign medical tourists visiting the country every year. The market is predicted to grow to $2 billion by 2012. These figures are significant when seen in the context of the total healthcare expenditure in the country today-$10 billion in the public sector and $50 billion in the private sector (calculated as approximately one per cent and five per cent of the country’s current GDP respectively). Visitors from 55 countries come to India for treatment but the biggest growth in business is from the UK and the US. The Taj Medical Group receives 200 inquiries a day from around the world and arranges packages for 20-40 Britons a month to have operations in India. It also offers follow-up appointments with a consultant in the UK. Apollo Hospital Enterprises treated an estimated 60,000 patients between 2001 and 2004. Apollo now has 46 hospitals with over 7,000 beds and is in partnership with hospitals in Kuwait, Sri Lanka and Nigeria. The government predicts that India’s healthcare industry could grow 13 per cent in each of the next six years, boosted by medical tourism which, industry watchers say, is growing at 30 per cent annually . Since 2006, the government has also started isuing M (medical) visas to patients and MX uvisas to the accompanying spouse.

In order to allay suspicions regarding the quality of care in a developing country , Indian corporate hospitals are getting certified by international accreditation schemes. Corporate chains such as Apollo Hospitals and Wockhardt Hospital Group are working through agencies like IndUShealth, Planet Hospital and the Medical Tourist Company in Britain to build business across the west.

India -Strategic Thrusts for the Future

The folowing section lays down the strategy for India to achieve leader position in +medical tourism.

A) The Role of Government:-

The role of the Indian Government for success in medical tourism is two-fold

  1. Acting as a Regulator to institute a uniform grading and accreditation system for hospitals to build consumers’ trust.
  2. Acting as a Facilitator for encouraging private investment in medical infrastructure and policy-making for improving medical tourism. For facilitating investment the policy recommendations include:
  • Recognize healthcare as an infrastructure sector and extend the benefits under section 80-IA of the IT Act. Benefits include tax holidays for five years and concessional taxation for the subsequent five years.
  • The government should actively promote FDI in healthcare sector.
  • Conducive fiscal policies – providing low-interest rate loans, reducing import/excise duty for medical equipment.
  • Facilitating clearances and certification like medical registration number, anti-pollution certificate etc.

The above measures will kick-start hospital financing, which is struggling now due to capital intensive and low-efficiency nature of the healthcare business.

For facilitating tourism the government should:

  1. Reduce hassles in visa process and institute visa-on-arrival for patients.
  2. Follow an Open-Sky policy to increase inflow of fights into India
  3. Create Medical Attachés to Indian embassies that promote health services to prospective Indian visitors.

Formation of National Association of Health Tourism (NAHT)-:

The promotion of medical tourism has so far been very fragmented with initiatives by few states and private hospitals. The earlier discussions clearly underline the need for presence of an apex body that can coordinate the promotion of medical tourim abroad. In the Indian context too, this has been successfully demonstrated in the software industry by NASSCOM. It is therefore essential to form an apex body for health tourism – NAHT. The NAHT should be formed as an association of the private hospitals operating in the industry.

A Win-Win Situation-:

This is a winning ticket for the corporate medical sector and for a section of medical professionals in the country .However, if we look at the public health implications, we see an entirely different picture. The government would have us believe that revenues earned by the industry will strengthen healthcare in the country. But We do not see any mechanism by which this can happen. On the contrary , corporate hospitals have repeatedly dishonoured the conditions for receiving government subsidies by refusing to treat poor patients free of cost – and they escape without punishment . Moreover , reserving a few beds for the poor in elite institutions does not address the necessity to increase public investment in health to three to five times the present level .

The extra revenue from medical tourism could benefit healthcare in India if it were taxed adequately to support public health. Instead, the medical tourism industry is provided tax concessions; the government gives private hospitals treating foreign patients benefits such as lower import duties and an increasingly rare of depreciation ( from 25 per cent to 40 per cent ) for life-saving medical equipment. Prime land is provided at subsidised rates. The industry also gets a pool of medical professionals who train in public institutions for fees of Rs . 500 a month and then move to work in private hospitals – an internal brain drain , and an indirect subsidy for the private sector of an estimated Rs. 500 crore per year. Thus, the price advantage of the medical tourism industry is paid for by the Indian tax payers who receive nothing in return.

Conclusion -:

The medical tourism industry offers high potential for India primarily because of its inherent advantages in terms of cost and quality. However, the competition is getting heated up and the success in future will largely be determined by the development and implementation of a joint strategy by various players in the industry. The government should step in the role of a regulator and facilitator of private investment in healthcare. An apex body for the industry needs to be formed to promote the India brand abroad and aid inter-sectoral coordination. Joint ventures with overseas partners and establishment of Medicities will help in India build a significant advantage and leadership position in the industry.


  1. Koul Jyoti, ‘Medical Tourism: The Perfect Cure’, Express Travel and Tourism.
  2. Rupa Chanda, ‘ Trade-in Health Services’ , Bulletin of the World Health Organization 2002.
  3. Health, Nutrition, Population Sector Unit India South Asia Region. Raising the sir heir health prems for Indias poor. Washington : World Bank; 2001.
  4. Sengupta A, Nundy S; The private health sector in India ( editorial ) BMJ2005.
  5. Dindayal Swain and Suprava Sahu; Opportunities and Challenges of Health Tours’ World Health Indicators , 2007 .
  6. Phil Zinkewicz; Medical Tourism on the Rise; Insurance Chronicle.
  7. Renu Verma; Medical Tourism : Opportunities and Challenges for India ; Marketing Mastermind, 2008.
  8. Benavides, Trade Policie and Export of Health Service – A Development Repeat odd Health Organization Publication, 2016.
  9. Kimm Ross; Health Tourism: An Overview.
  10. Gowri Shankar Nagarajan; Medical Tourism in India: Strategy for its Development, IIM, Bangalore, 2oo4


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