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Good morning. In today’s edition — Why diagnostics will dominate healthcare in 2025; FPIs continue their January sell-off; household debt hits concerning levels; and Indian IT firms ramp up lobbying spend to navigate H-1B policies.

THE TAKE

The Diagnostics Race In 2025 As India Battles Lifestyle Diseases

My dad often joked that everyone he knew who walked into a hospital always came out on a stretcher or in a wheelchair. His corollary was: don’t do lab tests or blood work unless specifically advised, because you’ll always find out things you’d rather not know.

Depressing as it sounds, this looks like 2025 is the year where we will find out about health problems we already had and, to be fair, should have known about.

Diagnostics Growth Mirrors Rising Health Challenges

Last week, in the largest-ever primary fundraise in the Indian diagnostics sector, Chennai-based Neuberg Diagnostics raised Rs 940 crore from Kotak Fund for growth and expansion. Founded in 2017, Neuberg, now less than a decade old, aims to expand into personalised medicine and integrated diagnostics, among other areas, according to Business Standard.

Meanwhile, Mumbai-based Metropolis Laboratories, India’s second-largest pathology chain, recently acquired cancer diagnostics firm Core Diagnostics in New Delhi for close to Rs 250 crore. Metropolis stated that super-speciality tests now constitute 37% of its revenue, a figure that is expected to rise to 41% with Core’s acquisition.

India recorded around 1.5 million cancer cases in 2023, a number that is expected to grow as non-communicable diseases continue to rise rapidly in the country. This growth, however, is not necessarily due to more patients developing cancer, but rather because more cases are being diagnosed, often at earlier stages than before.

Cancer testing alone is projected to grow at nearly 18% annually. If this trend applies to cancer, it is likely to extend to other conditions such as cardiovascular and lifestyle diseases, which are not just increasing but surging across India.

Latest data from pharma industry tracker Pharmarack indicates that more Indians were treated for neurological conditions, including depression, in 2024. The firm attributes this to a growing willingness among Indians to seek diagnosis—the critical step before receiving formal treatment. Once diagnosed, patients are increasingly opting for treatment and purchasing necessary medicines.

All of this spells good news for pharmaceutical companies that treat these conditions and diagnostic companies that help identify them.

The Indian diagnostic labs market is estimated to be worth around US $18 billion, or Rs 1,51,000 crore, according to a report hosted on Research & Markets.

AI and Lifestyle Diseases Drive India’s Diagnostics Boom

The diagnostics business can be categorised into passive diagnostics—such as pregnancy-related and preventive diagnostics done as required—and active diagnostics, which respond to lifestyle diseases and, at the extreme, pandemic situations like the one we saw four years ago. This is my definition.

Then there is the role of artificial intelligence. Companies like AstraZeneca are partnering with Indian firms such as Cure.AI to speed up chest X-ray scans, automating the detection and localisation of up to 29 markers, including those indicative of potential lung cancer. Diagnostics is also advancing in areas like genomic testing, which aids in early detection and personalised medicine.

Between increasing lifestyle diseases and our willingness to determine what is wrong with us, if something indeed is, the market for healthcare on the diagnostics and of course the cure side is set to grow rapidly in India in the coming years.

Increased diagnosis will most likely show up a less healthy nation than what we think we are. Rapid economic strides will mean hard work—I'm not getting into how many hours—which will call for a healthy workforce.

As rapid economic growth demands a healthy workforce, getting checked, tested, or diagnosed will, unfortunately, become something we do more often in 2025.

CORE NUMBER

Rs 22,194 Crore

💲This is the total amount withdrawn by Foreign Portfolio Investors (FPIs) from Indian equities in January 2025, marking a sharp reversal from 15,446 crore of investments in December 2024. The outflows reflect multiple global and domestic challenges, including a weak earnings outlook, a strengthening US dollar index above 109, and rising US bond yields exceeding 4.6%, according to analysts. Concerns over high valuations, inflation, and uncertainty about India’s interest rate policy may have further dampened investor sentiment.  This significant FPI exodus calls for closer monitoring of macroeconomic trends and policy responses to stabilise foreign investments, analysts further indicated.

FROM THE PERIPHERY

—📈 Indian household debt reached Rs 120 trillion in March 2024, a 56% rise from June 2021, pushing the debt-to-GDP ratio to 42.9% by June 2024, according to an analysis of December’s Reserve Bank of India (RBI) data done by Mint. This growing debt burden has constrained consumer spending, with housing loans accounting for 30% of total debt and vehicle loans contributing 10%. Consumption loans have grown by 5 percentage points over five years, reflecting changing borrowing patterns. High interest rates—9% or more for 66% of home loans by September 2024—have further increased EMI burdens, particularly for upper-income households, signalling rising financial strain and vulnerability to economic shifts.

—🏢 The Central Consumer Protection Authority (CCPA), in collaboration with the Real Estate Regulatory Authority (RERA), is introducing new measures to protect homebuyers from delays, hidden charges, and substandard construction, according to Mint. The initiative aims to ensure fair practices, provide compensation or refunds for grievances, and tackle false advertisements on online property platforms. Despite RERA’s establishment in 2017, enforcement gaps have persisted, necessitating this additional oversight. Under the Consumer Protection Act 2019, the CCPA can impose penalties of up to Rs 50 lakh, although its decisions are subject to appeal. Experts praise the move as a step towards transparency and accountability.

—🫰 Indian IT firms and the National Association of Software and Service Companies (Nasscom) have significantly increased lobbying efforts in response to the Trump administration's stringent H-1B policies, Economic Times reported. Nasscom’s lobbying spending rose from $200,000 in 2003 to $680,000 in 2019, engaging six firms. Cognizant allocated $1.5–2 million annually, while Accenture spent $2.5–3.5 million per year. Microsoft, the highest spender, dedicated $8 million in 2024 across issues including immigration. The Information Technology Industry Council (ITIC), a trade association representing firms like Amazon and Google, spent $2.16 million in 2024 on lobbying for immigration, antitrust, and consumer safety.

—🛢️ The United States has imposed stricter sanctions on Russian oil producers, including petroleum refinery firms Gazprom Neft and Surgutneftegas, and 183 shipping vessels, aiming to reduce revenues funding Russia’s activities in Ukraine, Reuters reported. These sanctions are expected to disrupt oil supplies to major importers like India and China, forcing refiners to source oil from the Middle East, Africa, and the Americas. The new sanctions are expected to disrupt oil supplies to China and India, forcing both nations to look for alternative sources in regions like the Middle East and Africa. This shift could drive up oil prices and freight costs, making fuel more expensive for consumers in India.

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