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VISION 2022 ROADMAP FOR INDIAN AYURVEDA INDUSTRYThis paper analyses the current positioning and highlights strategic imperatives forthe Ayurveda industry to transform itself and grow exponentially

frost.comForeword. 3Setting the Context .4Ayurveda: Are We Missing the Point? .5The Economic Growth Potential .6Unlocking Value . 9Vision Roadmap to Achieve 9 billion by 2022 . 10Call to Action. 11Confederation of Indian Industry . 19Copyright & DisclaimerPublished by Confederation of Indian Industry (CII) and Frost & Sullivan (F&S)Without limiting the rights under the copyright reserved, this publication or any part of it may not be translated, reproduced,stored,transmitted in any form (electronic, mechanical, photocopying, audio recording or otherwise) or circulated in any binding or coverother than the cover in which it is currently published, without the prior written permission of CII and F&S.All information, ideas, views, opinions, estimates, advice, suggestions, recommendations (hereinafter ‘content’) in this publicationshould not be understood as professional advice in any manner or interpreted as policies, objectives, opinions or suggestions ofCII and F&S. Readers are advised to use their discretion and seek professional advice before taking any action or decision,based on the contents of this publication. The content in this publication has been obtained or derived from sources believed by CIIand F&S to be reliable, but CII and F&S do not represent this information to be accurate or complete. CII and F&S do notassume any responsibility and disclaim any liability for any loss, damages, caused due to any reason whatsoever, towards anyperson (natural or legal) who uses this publication.This publication cannot be sold for consideration, within or outside India, without express written permission of CII and F&S.Violation of this condition of sale will lead to criminal and civil prosecution.CONTENTS

Vision 2022 Roadmap for the Indian Ayurveda IndustryFOREWORDModern therapies have limitations to completely cure chronic and lifestyle conditions. India‟s ambition to provideuniversal access and quality healthcare at an affordable cost mandates a paradigm shift in adoption of Ayurveda intothe mainstream healthcare system.Ayurveda‟s root cause management approach goes beyond just being a curative system of medicine to being apreventive and promotive healthcare system as well. The industry has gained recognition both in India anddeveloped countries as an alternative system of medicine.Despite having a strong advantage over modern therapies, the Ayurveda industry‟s growth trajectory remainssubdued. There is a burning need to prioritize focus on products and services that can jump-start modest growth andtriple the industry‟s market potential.Frost & Sullivan and CII have partnered to undertake a Vision Roadmap study to identify mega pivots and growthlevers that will unlock value in key industry segments and lead to decisive action with solid implementation.This whitepaper is an outcome of multiple rounds of discussions with key stakeholders in the Indian AyurvedaIndustry and CII leadership who have put an incredible effort into contributing to Vision Roadmap. We hope that thiswhitepaper will catalyze further discussions during the “MINISTRY OF AYUSH and CII AYURVEDACONCLAVE” in achieving the objectives of the plan.Reenita DasPartner, Senior Vice President,Transformational HealthFrost & SullivanRajiv VasudevanChairman CII Core Group on Ayurveda &Managing Director and Chief Executive OfficerAyurVAID HospitalsNitin NaikGlobal Vice President-LifeSciences, Transformational HealthFrost & SullivanAmita SarkarDeputy Director GeneralConfederation of Indian IndustryUnmesh LalProgram Manager-Life Sciences,Transformational HealthFrost & SullivanAnjula Singh SolankyDirectorConfederation of Indian IndustryAll rights reserved 2017 Frost & Sullivan andCII3

Vision 2022 Roadmap for the Indian Ayurveda IndustrySETTING THE CONTEXTThe healthcare market in India is evolving at a rapid pace. As per estimates, it is one of the fastest growing industrieswith an estimated compound annual growth rate (CAGR) of 23% from 2015 to 2020, and is expected to be a 280billion market by 20201. Rising income levels, the growing geriatric population, greater penetration of healthcare inrural settings, and increasing health awareness with an emphasis on „preventative healthcare‟, is expected to enhancethe demand for healthcare services.India‟s National Health Policy aims at achieving Universal Health Coverage and delivering quality healthcare to allat an affordable cost. The policy aims at providing a comprehensive primary health package which includes majorcommunicable, non-communicable and chronic diseases, geriatrics, palliative and rehabilitative care.For a vast country like India, to achieve this goal with just the modern medicine system in place is a herculean task,as even modern therapies have their own drawbacks such as burgeoning costs, quality of life issues, and the inabilityto prevent and cure many diseases. However, Ayurveda can change this outlook of healthcare delivery by gettingintegrated into mainstream healthcare. As shown in Exhibit 1, promoting Ayurveda as a mainstream therapyapproach can be used to bridge the burgeoning gap between demand and supply by primarily focusing on thesecondary and tertiary prevention of diseases. In addition, the substantial opportunity in promotive health andrestoration of functional health is best addressed by Ayurveda.Shifts in healthcare expenditure and disease profiles provideAyurveda a golden opportunity to be positioned as the treatment ofchoice for non-emergency medicalcare.Source: AyurVAID HospitalsExhibit 1: Ayurveda’s Role in the Mainstream Health SystemAyurveda’s impact Across the Healthcare SystemPreventivePrimal &PrimaryPreventionNCD sCDAyurveda can be the treatment of choice for non-emergency medical careDISEASE STAGEAYURVEDAALLOPATHYPre-acute (Preventative & Curative)Acute(Alleviative, Preventative & Curative)Emergency (Management)Post-acute(Preventative, Curative & Promotive)Source: AyurVAID Hospitals1 x4All rights reserved 2017 Frost & Sullivan andCII

Vision 2022 Roadmap for the Indian Ayurveda IndustryAYURVEDA: ARE WE MISSING THE POINT?Ayurveda management is based on the concept of root-cause diagnosis and management. As shown in Exhibit 2, ittreats not only the physical aspects of the disease but also treats and manages the root cause of the problem, incontrast to the prevalent practice of mere symptom management. It goes beyond just being a curative system ofmedicine to being a preventive and promotive healthcare system as well. Classical Ayurveda encompasses allattributes of a mature and complete medical science including anatomy, physiology, pharmaceutics, diseasecausation-evolution, and disease management. The aetio-pathogenesis of disease is established through a structuredprocess of compilation of disease signs and symptoms, medical history, and clinical examination. Thereafter, a wholebody, systemic healing process attempts to restore homeostasis or good health by reversing the aetio-pathogenesisfor not only disease cure but also for sustained wellbeing in body, mind, and soul dimensions. This comprehensivetherapeutic approach or „Chikitsa‟ is uniquely personalized, and includes one or more of diet-lifestyle-medicinetherapies. Ayurveda‟s principles are universal and time-tested in its application to diseases prevalent in the 21stcentury, across the world.Exhibit 2: Ayurveda Industry, Treatment Approach and raDIET SoulMind Ayurveda as “Ayurveda Chikitsa” focuses on rootcause diagnosis and management andalways includes personalized diet and lifestyle tips.All rights reserved 2017 Frost & Sullivan andCII5

Vision 2022 Roadmap for the Indian Ayurveda IndustryTHE ECONOMIC GROWTH POTENTIALThe Indian Ayurveda industry can be broadly categorized into the organized and the unorganized sectors. Large manufacturing productcompanies, hospitals, clinics, pharmacies, and authentic Ayurveda wellbeing centers constitute the organized Ayurveda sector. Also,several organized hospitality participants also include light Ayurveda therapies in their bouquet of offerings. Small manufacturingproduct units, raw material cultivators, local Ayurveda vaidyas, small exporters, local Ayurveda pharmacies, and extractmanufacturers constitute the unorganized sector. Exhibit 3 illustrates the key stakeholders in the Ayurveda sector.Exhibit 3: Ayurveda Industry, Key iationsSource: Frost & Sullivan2 Calculations based on INR-USD average exchange rate in 2016; 1 USD 67.08 INR.6All rights reserved 2017 Frost & Sullivan andCIIAs per Frost& Sullivanestimates,anecdotalevidenceconjecturedthe totalAyurvedamarket tobeapproximately USD 3billion2 in2016 andgrowing ata CAGR of15-16%.

Vision 2022 Roadmap for the Indian Ayurveda IndustryAs shows in Exhibit 4, the Ayurveda industry can be categorized by its market offerings into twobroader categories:A) Products: Ethical, classical, OTC, personal care and beauty productsB) Services: Medical, well-being, payor and medical tourism servicesExhibit 4: Ayurveda Industry, Estimated SizeTotal market size: USD 3 billionServices, 25%,USD 0.75billionProducts, 75%,USD 2.27billion54%21%USD1.64billionCorporates9%6%4%USD 0.18billionUSD 0.27billionUSD 0.18billionUSD karma Hospitals)(Herbs Finished Gs)do6%USD 0.63billionExtractManufacturersSource: Frost & Sullivan (based on industry stakeholders’ interviews)All rights reserved 2017 Frost & Sullivan andCII7

Vision 2022 Roadmap for the Indian Ayurveda IndustryAYURVEDA PRODUCTSThe Ayurveda product segment (valued at approximately USD 2.27 billion in 2016) has been flourishing in India formany decades. Ethical products, classical Ayurveda products, fast-moving consumer goods (FMCG) and personalcare products (including cosmetics) are the major categories being retailed. Some of the prominent blockbusterproducts include Chyawanprash, Triphala Churna, Ashwagandha, and Aloe Vera products.Retail franchising has provided a big push towards the launch of Ayurveda companies. In addition, e-commerce isalready playing a larger role in taking Ayurveda products to the masses. Market places such as Amazon, Flipkart,and other online pharmacies have collaborated with large corporates to retail their products to the masses.AYURVEDA SERVICESThe Ayurveda services segment (valued at approximately USD 0.75 billion in 2016) includes two broader categories.Medical Services: This segment constitutes clinics, hospitals, and traditional family-run vaidyasalas offeringcurative services. Ayurveda is also integrated into the public health system across the country, especially at primaryhealthcare centers. However, its practice is starkly conspicuous by its absence. Ayurveda by its philosophies andprinciples can play a major role in preventative, curative, and promotive healthcare. Insurance coverage isincreasingly being offered for Ayurveda hospitalization and medical care services. The Insurance RegulatoryDevelopment Authority of India (effective February 2013) has enjoined all health insurance companies to extendcashless coverage to National Accreditation Board for Hospitals and Healthcare Providers (NABH)-accreditedAyurveda hospitals. Furthermore, in September 2016, the Ministry of AYUSH in consultation with the Ayurvedahospital industry and major Indian health insurance companies announced a set of standard tariffs for commonmedical conditions. Today, the insurance sector is progressively increasing the share of Ayurveda coverage acrosscorporate as well as retail insurance policies. Also, there is Central Government Health Services (CGHS) coveragefor Ayurveda medical care already in place; however, rates have not been revised since 2008.Wellbeing Services: Ayurveda originally committed itself to a two-fold purpose–––disease reversal and healthpromotion. The latter, health promotion, is experiencing a paradigm shift brought on by a shift in consumermindsets–––from trying to achieve mere physical wellness to adapting a “wellbeing” approach that considersphysical, mental/psychological, and spiritual health. With many countries incorporating spa therapies that includeAyurveda massages as part of their tourism promotion strategy, the unique differentiation potential of authenticAyurveda wellbeing services has diminished in the last couple of decades. A radical new strategy is required toreposition Indian Ayurveda wellbeing services as a high-value, scientific and quality system-driven service. Theintroduction of NABH-accreditat