The immediate impact was caused by the closure of borders between the two countries and the halting of passenger movements. The Indian government also shut down its visa centres in Bangladesh. Sporadic violence in the neighbouring country continues to affect India’s medical tourism sector.
Market research agency CareEdge estimated that while medical tourist inflow dropped by about 80% in August 2024, there would be a 10-15% decline for the entire year compared to 2023.
The latest figures from the Indian tourism ministry highlight the impact of this adverse development on the industry. During January-August, foreign tourist arrivals from Bangladesh accounted for 20.77% of the overall tourists in India. However, when the Bangladesh crisis started in August, the figure dropped to 15.59%.
Similarly, medical tourists accounted for 7.72% of the overall tourism inflow pie during January-August, but the share fell to 6.85% in August. Bangladesh has been the leading country in foreign tourist arrivals in the last few years, and any decline in the number of Bangladeshi tourists in the country will have a broader effect on the overall tourism industry.
Apart from Bangladesh, medical tourists have come from Yemen, Iraq, Oman, the Maldives, Sudan, Kenya, Nigeria, Tanzania, and Myanmar in recent years. Nations like Yemen, Iraq, Sudan, and Myanmar have seen escalating internal and regional armed conflicts. Additionally, relations between the Maldives and India have not been their best since Mohamed Muizzu took over as its president in November 2023.
This situation contrasts with what was anticipated for the medical tourism sector just a year ago. The outlook had been very promising, with a significant number of medical tourists visiting hospitals like Apollo Hospitals, Fortis Healthcare, and Max Healthcare in the national capital, CMC Vellore in the south and other hospitals in Chennai and West Bengal.
An India Brand Equity Foundation (IBEF) analysis in May suggested that medical tourism, which typically contributed about 10-12% to the overall revenue of these hospitals, was expected to grow at a compound annual growth rate (CAGR) of about 25%.
The driving factors for medical tourism in India have been international-standard infrastructure, superior service compared to the home countries, and relatively affordable healthcare. For example, a bypass surgery that could cost up to $100,000 in the US is available in India for around $5,000.
A growing number of medical tourists also come for alternative medical therapies like ayurveda, homeopathy, unani, yoga and siddha. High-profile visitors like King Charles III and Queen Camilla, who made a four-day private visit last month to the Bengaluru-based Soukya International Holistic Health Centre, exemplified this trend. India had attracted an estimated 6.1 million medical tourists in calendar year 2023, as per Crisil.
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Rethink. diversify
The current challenges necessitate a rethink of India’s medical tourism strategies and the National Strategy and Roadmap for Medical and Wellness Tourism, which the tourism ministry formulated in 2022. So, what could be the potential measures to revive the sector?
India needs to diversify its source countries from the current less-developed economies to developed countries, which accounted for a mere 1.4% of medical tourists in 2022. Countries like the US, the UK, Canada, Australia, and Switzerland have long wait lists for medical care through their public healthcare systems. A focused and robust marketing campaign by the Indian government and hospitals in these countries will help diversify our source countries and attract higher-paying medical tourists.
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The issue of e-visas also needs a relook. Although India offers e-visas to 170 countries, this facility is not available in five countries in the current top ten list of source countries, per a November 2024 paper from economic think-tank ICRIER. These nations include Iraq, Yemen, Maldives, Sudan and Nigeria. The facility, even for Bangladesh, was formalised only as late as June 2024. While broad-basing the source countries would be a medium-term plan, approving e-visas for the above countries would greatly help bring some immediate relief to the sector.
Many unregistered agents in the sector act as a bridge between hospitals and patients, short-changing patients. Strengthening oversight and regulation of these agents is essential to protecting patients and upholding the industry’s reputation. Implementing these strategies can help the industry get its mojo back.
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