India is the 2nd largest exporter of Ayurveda and traditional medicine globally
India’s current Ayush industry revenue stands at US$ 18.1 billion from over $ 3 bn in 2014, clocking a phenomenal growth of almost 6 times. Between 2014-2020, the Indian Ayush industry grew 17% year-on-year. Ayurveda market predicted to grow at 15% CAGR from 2021-2026.
India exports Ayush products to markets such as the USA, Nepal, Russia, Philippines, UAE, Kenya, Germany, Vietnam, China, Italy, The UK, Western Europe, Japan, Hong Kong etc. The herbal pharmaceutical or medicament sector constituted 35.2% of Ayush exports in 2020, while the extracts and nutraceuticals sector shared around 22% export share each in the total, whereas medicinal and aromatic plant recorded 19.9% export share in 2020.
According to the data available on the Udyam portal, there are about 38000 MSMEs (Micro – 31,775; Small – 6,034; Medium – 407) of Ayush sector. The size of the Ayush service sector in India (consisting of hospitals, day-care, clinics, and dispensaries) is projected to be $6 Bn in 2022. Within health services’ export earnings, Ayush ranks among the top five health services with Medical Value Travel (MVT) in India & is expected to grow to $13 Bn in 2022.
Ayush based Healthcare & Wellness economy is estimated to grow to $7 Tn by 2025. Rejuvenation is the fastest growing segment with a growth rate of about 25% within the Wellness market as of FY 2017 and the sector is likely to generate nearly 3 mn job opportunities. Medical Value Travel (MVT) in India is expected to grow to $13 Bn in 2022.
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Global Ayush market
- $ bn
Ayush Exports in 2020
- $ bn
Service Sector Size in 2022
Sector growth between 2014-2020 (YoY)
One of the fastest growing sectors in India (17% y-o-y growth from 2014-2020), and predicted to grow at 15% CAGR from 2021-2026
$1.54 bn size of Ayush Exports from India in 2020
As per a Botanical Survey of India estimation, more than 8,000 species of medicinal plants are found in India- this is the basis for a robust Ayush sector in India
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
Country’s exports in the sector expanded rapidly from $1.09 bn in 2014 to $1.54 bn in 2020, registering a robust growth rate of 5.9 % annually.
As per estimates of Global Wellness Tourism, India ranked at 7th position in 2017 with 56 mn trips in wellness tourism which accounted for a 45 per cent growth from 2015 and total revenue of $16.3 bn.
As estimated by IMARC (2021), the Ayurveda market is expected to grow by round 15 % during 2020-2025. Statistics from NMPB indicates two to three-fold increase in value of herbal raw materials (as per Née much Mandi rates) between January and September 2020.
The global market size of the herbal sector which was estimated at US$ 657.5 billion in 2020 and is likely to touch US$ 746.9 billion. The sector of herbal medicine grew at the rate of 7.4 % per annum during 2014-20. Various sub-sectors, particularly, herbal pharmaceutical sector expanded at the rate of 18.5 % during the same period with the market share of 14.1 % in 2020
Nutraceuticals is the dominant sector in the industry accounting for 42.3% of the domestic market. Pharmaceuticals are also coming up with a share of 30% follow by herbal plants of 13.8%. Share of sub-sectors in Ayush market size – Herbal Plants (43.35%), Nutraceuticals (24.65%), Pharmaceuticals (14.11%), Cosmeceuticals (8.37%), Plant Derivatives (5.14%) and Plant Extracts (4.39%).
The Government of India has already set a target of increasing spending on healthcare from the current 1.3% to 3% of GDP, which will positively impact Ayush. The number of patients treated with Ayush system of medicine through government hospitals and dispensaries has risen from 2.5 Crores (FY 2017-18) to 4.3 crore (FY 2020-21).
Under Ayushman Bharat scheme, Ayush would manage 12,500 HWCs to offer Ayush health services and wellness interventions as part of Comprehensive Primary Healthcare. As per estimates of Global Wellness Tourism, India ranked at 7th position in 2017 with 56 million trips in wellness tourism which accounted for a 45 per cent growth from 2015 and total revenue of $ 16.3 billion.
GCTM: The Ministry of Ayush and the World Health Organization (WHO) is establishing the world’s first and only Global Centre for Traditional Medicine (WHO GCTM). Constant attempts at building an investment friendly industry, strong academia partnerships for transfer of technology (ToT) through major research institutions like CCRAS (Central Council for Research in Ayurvedic Sciences) and CSIR (Council of Scientific & Industrial Research), digitization through e-Charak, e-Aushadi etc., are some of the initiatives of the Ministry of Ayush.
Ease of business is further encouraged through recently introduced perpetual licensing norms. Several states have industrial/investment policies along with industrial hubs/clusters for Ayush product manufacturing. States’ encouragement of raw material cultivation further facilitates value chain integration in the sector.
At the same time, some states have capitalised their advantage in Ayush service sector, as wellness destinations, to promote product manufacturing. The labour productivity, performance in both profits and exports for the Ayush manufacturing industry is at par with the pharmaceutical industry with the growth rate of total output surpassing that of major industries such as electronics and food beverage.
Increased government spending
Ayush Ministry’s budget allocation stands up at INR 3,050 Cr, 4-fold increase over 7 years.
Developing standards on Ayush Systems
Promotion of Ayush products over 165 countries through ISO standards route
WHO Global Centre for Traditional Medicine
Will promote collaborative efforts in research, regulation, & trade and connect the global value chain leading to improved ease of business & governance
Policy support & Incentives
100% FDI allowed in Greenfield & Brownfield projects, Ayush Visa, Ayush Parks & Ayush Mark to improve EoDB are being undertaken
Rise in Medical Value Travel
Due to the relatively low cost of medical care in India, is expected to grow at a CAGR of 21.1% from 2020 to 2027, reaching a valuation of $6 bn