Unrest In Bangladesh Hits Economy Hard After House Of Hasina Crumbled; India's Medical Tourism To Take Heat?

The unrest in Bangladesh is far from over even after the house of Sheikh Hasina Wazed falls. The country's longest-serving PM Hasina and her government have fled Bangladesh which is suffocating in intense economical crisis. This mayhem in Bangladesh could impact India's medical tourism by 10-15% in 2024, as per CareEdge Ratings.

Amidst politicial distress with now protestors attacking Hasina's supporters, the latest figures of Bangladesh's economy is bone-shuddering. The once called 'Asian Tiger', Bangladesh's food inflation crossed 14% in July, highest level in 13 years, while its retailers are struggling to keep prices steady with downfall in Bangladeshi Taka value. Additionally, supply chain has also taken a huge hit due to protests impacting business activities.

According to CareEdge, 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.

Date from the rating agency highlighted that India is among the top 10 countries for medical tourism globally and is especially preferred amongst SouthAsian, African and Middle East countries. The medical tourism industry is expected to grow further driven by the Government of India initiatives such as 'Heal in India'.

About 70%-80% of medical tourists arriving in India are from Bangladesh and Middle East countries.

In CareEdge's view, the ongoing socio-political unrest in Bangladesh, which typically accounts for 50%-60% 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," CareEdge's report said.

D. Naveen Kumar, Associate Director at CareEdge said, "CareEdge anticipates medical tourism footfall from Bangladesh to India slash by 10-15% in 2024 on account of ongoing political unrest in the country. 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."

However, Kumar added, "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."

Noteworthily, Bangladesh stands out as the leading contributor to medical tourism among neighbouring countries, surpassing the Middle East, Myanmar, Maldives, Sri Lanka, and Pakistan.

Hence, as per CareEdge, 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.

Each year, an estimated 3 to 3.5 lakh individuals from Bangladesh seek medical treatment in India, predominantly utilising services from hospitals in the eastern region. Medical tourists from Bangladesh are projected to contribute 2% to 3% to the Indian hospital segment, as per CareEdge's data.

Furthermore, CareEdge Ratings estimates that due to current political unrest, the FTA (Foreign Tourist Arrival) for medical treatment from Bangladesh to significantly fall by about 80% during August 2024 and gradually improve thereafter and for the entire year (i.e. 2024) the drop in FTA from the country is expected to be about 10% to 15% as compared to 2023.