Bangladesh Crisis May Reduce India's Medical Tourism By 10-15% In 2024

CareEdge Ratings anticipates medical tourism footfall from Bangladesh to India slash by 10 to 15 per cent in 2024 on account of ongoing political unrest in Bangladesh. Noting that medical treatments are non-discretionary and typically only subject to short-term delays, a gradual normalisation of medical tourism is expected by December 2024. 

The ongoing socio-political unrest in Bangladesh, which typically accounts for 50 to 60 per cent of India’s total international medical tourism inflow, has significantly affected medical tourism from the country to India. A considerable number of these travellers have either cancelled or postponed their visits, the report added.

Currently, medical tourism contributes approximately 3 to 5 per cent of the total revenue in the Indian hospital sector. While the decline in footfall from Bangladesh is expected to gradually recover by the end of 2024, the overall impact on the sector is projected to be minimal. 

India's medical tourism sector witnessed significant growth in 2023, driven by the country's competitive treatment costs, high-quality medical facilities and services, and relatively short waiting times for treatment. International medical tourism footfalls to India had increased by approximately 33 per cent year-on-year (YoY) in 2023.

"However, the effect on individual hospitals will vary depending on their reliance on Bangladeshi medical tourists. Hospitals with a high dependency on these tourists may experience revenue declines in Q2 and Q3 of FY25, while larger, multi-location hospitals in India are likely to see a relatively minor impact. Most Indian industry players appear to be largely unaffected by the crisis, supported by their strong financial resilience and robust cash accruals," stated D. Naveen Kumar, Associate Director, CareEdge Ratings.

In recent years, medical tourism in India has been on a gradual upward trend, driven by the relatively low cost of surgery, high-quality critical care, hospitals with advanced technology, and the expanding e-medical visa facility. Although 2021 saw some growth in medical tourism following the significant impact of the Covid-19 pandemic the previous year, it remained subdued due to the ongoing travel restrictions in parts of that year. 

However, 2022 marked a significant comeback, with medical tourism nearly returning to pre-Covid levels, and the trend continued in 2023, showing a 33 per cent year-on-year growth. “The government of India's initiative to extend the e-medical visa facility to nationals from 167 countries is expected to further boost medical tourism in the coming years,” the rating agency stated.

India ranks among the top ten countries for medical tourism globally and is especially preferred among South Asian, African and Middle Eastern countries. The medical tourism industry is expected to grow further driven by the Government of India initiatives such as ‘Heal in India’. This particularly benefits the hospitals in metro cities the most as they are prime beneficiaries of international patient flow. Nearly 70 to 80 per cent of medical tourists arriving in India are from Bangladesh and Middle East countries.

Bangladesh has been contributing 50 to 60 per cent of total tourists visiting India for medical treatment. One of the significant factors driving this is the cultural and linguistic similarities, quality treatment at competitive prices, access to advanced facilities etc. Bangladesh stands out as the leading contributor to medical tourism among neighbouring countries, surpassing the Middle East, Myanmar, Maldives, Sri Lanka, and Pakistan. 

This highlights Bangladesh's crucial role in the Indian medical tourism sector. However, recent socio-political instability in Bangladesh poses a risk to this flourishing segment of the industry. The current internal challenges in Bangladesh have shown signs of affecting the flow of patients, according to the report.