NATIONAL SEMINAR ON FDI IN SERVICE SECTOR in Services Sector in Emerging Economy Opportunities and Challenges

SWOT ANALYSIS OF FDI IN INDIAN HEALTH CARE SECTOR

B. Syamala DeviResearch Scholar

K L University

Introduction

• Why do services matter?

• Why do healthcare sector matter right now?

• What do we actually know about them?

This paper aims to address the Indian FDI, forms, Health

care sector and SWOT analysis.

Foreign Direct Investment:

Foreign investment was introduced in india in 1991 under Foreign exchange

management act(FEMA) by Man Mohan Singh.

Take place for many reasons of cheaper wages, special investment privileges

offered by the country.

Forms may be like tax confessions, tariffs, research and development,

investment subsides, mergers, acquisition, land subsidies etc.,

Foreign direct investment (FDI) is a tool for economic growth through its

strengthening of domestic capital, productivity and employment. FDI also plays

a vital role in the up gradation of technology, skills and managerial capabilities

in various sectors of the economy.

After independence in India 1947, FDI gained attention of the

policy makers for acquiring advanced technology and to mobilize foreign

exchange resources. In order to boost the FDI inflows in the country Indian

government allowing frequent equity participation to foreign enterprises

apart from provides many incentives such as tax concessions, simplification

of licensing procedures and de-reserving some industries like drugs,

fertilizers, aluminium etc.

The growth of FDI gives opportunities to Indian industry for

technological up gradation, gaining access to global managerial skills and

practices, optimizing utilization of human and natural resources and

competing internationally with higher efficiency

Fdi in india:

FDI in health care sector:

The Indian health sector rehabilitated and the liberalization policy

in India have created new opportunities in health care markets since the

1980s for organizations both national and international with profit

making motto. When the demand of the quality as well as quantity of the

hospitals is increased, the private sector as well as the public sector

hospital care providers could not fulfil the demand then a new pro-market

regulatory environment has helped Private Corporation to invest in the

hospital sector.

Types of FDI in Indian health care sector:

Foreign Direct Investment mostly from three different

forms as horizontal, vertical and platform based. In the Horizontal

Foreign direct investment method a firm copies its home country based

activities at the same value chain stage in a home country through FDI. In

the Vertical Foreign direct investment method when a firm performs

value added activities stage by stage in a vertical manner in a host

country. In the Platform Foreign direct investment method source country

to a destination country for the purpose of exporting to the other country

The forms of foreign direct investment are too many some of

them are tax confessions, tariffs, research and development, infrastructure

subsidies, investment subsides, special economic zones, land subsidies,

relocation facilities etc.,

Forms of FDI in health care sector:

Swot analysis of FDI in health care sector

Opportunities Strengths Weaknesses Result

High High High Reduce weakness and then take opportunities

High High Low Take the opportunity

High Low High Reduce weakness and increase strengths and take opportunity

High Low Low Increase strengths and then take opportunities

High High High Reduce weakness and create an own opportunity

High High Low Create your own opportunity

High Low High Reduce the weakness, increase strengths and create an

opportunity

High Low Low It takes more time

STRENGHTS

Potentially huge market with growing urban middle class populationGrowing private hospital sector aiming to attract health touristsGrowth in health care market past 20years

WEAKNESSES

o Low per capita expenditureo Untapped rural marketso Support system from R & D not availableo Lack of implementation of government policies and infrastructure o Excessive dependency on imports

OPPORTUNITIES

Overseas companies investing in India to set up research units and develop new products Increasing joint ventures and agreements Overseas aid assisted projects to improve healthcare infrastructure

THREATS

Regulation policies may slow down the development of the market Unorganized market for medical disposables Lack of regulations in Medical disposables and surgical items leading to spurious products

From the above SWOT Analysis it was clear that the strengths

are little and weakness are more implies that the weakness should be

minimized to then only strengths get be used properly. Opportunities are

there and also threats we have to rectify the threats and then take the

opportunity. The government should give a priority to the health care

sector and provide policies to them.

findings:

The healthcare sector which is the second largest recipient of

FDI inflows in India has significant growth potential and can contribute

significantly to India’s growth. One of the major impacts foreign investment

would have is the development of Human Resources in the Hospitals. In

addition to helping increase physical capacity in the health care sector, such

as increasing the number of hospital beds, diagnostic facilities, and

increasing the supply of specialty and super-specialty centres, foreign

investment also help in raising the standards and quality of healthcare, in

upgrading technology, and in providing training and development

programmes, career planning programmes, fringe benefits to employees

with potential benefits to the health sector and the economy at large.

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