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The domestic medical diagnostic industry is expected to grow in the range of 12-14 per cent over the medium term, driven by both organic and inorganic expansion of the players and a shift in the consumers towards preventive healthcare, according to a report of CareEdge.
The Indian diagnostic services market was valued at $14.57 billion in 2022 and $16.23 billion in 2023. It is projected to reach $43.57 billion by FY32, as per a report published by Polaris Market Research in March 2023.
Diagnostic services are classified into pathology testing services and imaging diagnostic services, wherein the former accounts for about 60 per cent of the market share, while imaging tests account for the rest. The radiology market is growing rapidly due to the increasing demand for imaging services, while the pathology testing services market is also expanding due to the growing number of people undergoing preventive health check-ups.
Fragmented segment
The diagnostic industry is highly fragmented with organised players contributing only 17 per cent of the market share. Of this share of 17 per cent, PAN-India diagnostic chains have a market share of about 35 per cent and the regional chains the rest.
The four largest players such as Dr Lal PathLabs, Metropolis Healthcare, SRL Diagnostics, and Thyrocare Technologies have only about 6 per cent market share. Local players enjoy a market share of about 46 per cent fragmenting the market, followed by hospital-based labs with a market share of about 37 per cent.
The domestic diagnostics industry is a growing sector, supported by an increase in healthcare spending by an ageing population, rising income levels, rising awareness for preventive testing, advanced healthcare diagnostic test offerings, market penetration of healthcare insurance, and healthcare measures by the Central government.
Post-Covid crisis, diagnostic services have become an integral part of the healthcare industry starting with the early detection of the disease, the entire treatment cycle and finally the post-treatment monitoring.
Medical tourism
More players in the industry are focusing on geographical expansion and inorganic growth acquiring regional local players to capture higher market share.
“The cost of diagnostic services in India can vary depending on the type of test and the facility, but it is generally more affordable compared to many other countries. Consequently, India is fast emerging as a medical tourism hub, witnessing a surge in patients from across the world for cost-effective and quality treatment options,” said Priti Agarwal, Senior Director at CareEdge Ratings.
Besides, the growing efforts to make India a medical tourism destination by the government authorities are expected to boost the demand for Indian diagnostic services in the next few years, she added.
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