ECONOMIC OVERVIEW
GLOBAL ECONOMY
The global economic growth is anticipated to stabilise at 2.6% this year, marking the first steady year in three despite rising geopolitical tensions and high interest rates, as per World Bank projections. Growth is expected to slightly increase to 2.7% in FY26, driven by modest trade and investment gains. Additionally, global inflation is projected to moderate, although more slowly than previously expected, with an average of 3.5% this year.
Due to ongoing inflationary pressures, central banks in both advanced economies and emerging markets and developing economies (EMDEs) are likely to remain cautious in easing monetary policy. Consequently, average benchmark policy interest rates over the next few years are expected to stay roughly double the 2000 to 2019 average.
Even though near-term growth prospects have improved, the outlook remains subdued compared to historical standards in both advanced economies and EMDEs. Global growth over the forecast horizon is expected to be nearly half a percentage point below its average pace from 2010 to 2019. In FY25, growth is projected to underperform its 2010 to 2019 average in nearly 60% of economies, which together represent more than 80% of the global population and world output. EMDE growth is forecast to moderate from 4.2% in 2023 to 4% in both 2024 and 2025.1
INDIAN ECONOMY
Despite uncertainties from adverse geopolitical developments and expansionary fiscal measures during the COVID-19 pandemic, the Indian economy has shown resilience and maintained strong macroeconomic fundamentals. According to the First Advance Estimates of National Income for FY24, Indias Real GDP is projected to grow at 7.3%, as noted in the Macro-Economic Framework Statement 2024-25.2
During this period, India has achieved the highest growth among major advanced and emerging market economies. The IMF projects that India will become the third-largest economy in USD terms by 2027 at market exchange rates and estimates that Indias contribution to global growth will increase by 200 basis points over the next five years.
This optimistic economic outlook is supported by robust GDP growth forecasts, manageable inflation levels, political stability at the central government level and signs that the central bank has concluded its monetary tightening policy.
OUTLOOK
India has emerged as the worlds fastest-growing major economy. It is projected to become one of the top three economic powers within the next 10-15 years, supported by its effective democracy and strong partnerships.
The countrys attractiveness as an investment destination has increased amid global uncertainty, evidenced by record funds raised for India-focused investments in 2022, highlighting investor confidence in the "Invest in India" narrative.
In the first quarter of FY23, India surpassed the UK to become the fifth-largest economy, recovering strongly from the COVID-19 pandemic. For FY24, Indias nominal GDP is estimated at ^293.90 Lakh Crore ($3.52 trillion), up from ^269.50 Lakh Crore ($3.23 trillion) in FY23. This reflects a growth rate of 9.1%. Key drivers of this growth include strong domestic demand for consumption and investment alongside significant government capital expenditure.
From January to March 2024,3 Indias exports totalled $ 119.10 billion, led by Engineering Goods (25.01%), Petroleum Products (17.88%) and Organic and Inorganic Chemicals (7.65%). Rising employment and private consumption, supported by improving consumer sentiment, are expected to sustain GDP growth in the coming months.
Indias economy is primarily driven by domestic demand, with consumption and investments accounting for 70% of economic activity. As the country recovers from the pandemic, substantial investments and developments have been made across various sectors. The World Bank emphasises that India should reduce inequality while implementing growth-oriented policies.
Recent achievements include India being ranked 40th among 132 economies in the Global Innovation Index 2023, up from 81st in 2015 and securing the third position globally in scientific publications. According to the Ministry of Statistics & Programme Implementation (MoSPI), Indias Consumer Price Index (CPI)- based retail inflation reached 5.69% in December 2023.
This robust economic performance underscores Indias potential to play a pivotal role in the global economy in the coming years.
INDUSTRY OVERVIEW
VETERINARY HEALTHCARE
GLOBAL VETERINARY HEALTHCARE INDUSTRY
Veterinary health companies have adeptly navigated the challenges of raising animals in a rapidly evolving world, demonstrating resilient growth over the past decade. They increasingly provide disease prevention products and invest in R&D, particularly in diagnostics and digital technologies. These advancements are essential for fostering a sustainable relationship with animals, allowing companies to innovate and build on current progress.
The Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organisation of the United Nations (FAO) project a 14% increase in livestock and fish production from 2020 to 2030, largely driven by productivity improvements in existing herds to meet sustainable production goals. Effective health management is crucial to reducing livestock losses and enhancing efficiency, which is integral to this sustainable approach.4
As global pet populations rise, owners are investing more in petcare. The veterinary healthcare sector is extending the lives of pets and protecting households from hazards like fleas, ticks and illnesses. Concurrently, animal diseases economic and societal costs are significant, prompting increased investment and public support for animal health. Achieving the global Sustainable Development Goals by 2030 will significantly depend on the role of animal health.
Source: HealthforAnimals
Post-COVID, governments recognise the ‘One Health approach, which links human, animal and environmental health. This approach boosts public awareness and investment in animal health, streamlines regulatory processes and enhances disease prevention, leading to better health outcomes across all domains.
Furthermore, the veterinary diagnostics market is rapidly growing, driven by trends in wellness care, especially for pets. Increased diagnostics testing helps track health trends and detect issues early, promoting overall animal health. Recognising diagnostics as a preventive tool rather than just for acute issues will improve animal health.
Sustainable livestock production necessitates better animal health, as disease increases emissions and environmental footprints. Sick animals require more resources and losses to disease mean raising more livestock to maintain food supplies, further increasing production emissions. In this regard, addressing billions of animals health needs presents significant challenges and opportunities. The resultant success will lead to sustainable food systems, improved public health and companionship from pets.
4
https://healthforanimals.org/animal-health-in-data/parasites-diseases/global-trends-in-the- animal-health-sector/INDIAN VETERINARY HEALTHCARE INDUSTRY
The Indian veterinary healthcare market is witnessing significant growth, fuelled by increasing government initiatives and rising awareness about animal health. The National Livestock Mission (NLM) plays a key role in enhancing livestock production.
Notably, veterinary hospitals are expanding their services. For example, in August 2022, DCC (Dogs Cats & Companions) Animal Hospital, a leading multi-speciality petcare chain, opened a new full-service medical and grooming centre in New Delhi.
India faces the highest burden of zoonotic diseases among developing countries, prompting further government focus on livestock health. Key programmes supporting this growth include Assistance to States for Control of Animal Diseases (ASCAD), the National Animal Disease Reporting System (NADRS), Establishment & Strengthening of Veterinary Hospital and Dispensaries (ESVHD) and the Foot and Mouth Disease Control Programme (FMD-CP).5
These initiatives and the increasing activity in the veterinary sector underline the robust growth trajectory of Indias veterinary healthcare market.
GROWTH DRIVERS Thriving Vaccine Segment
India is home to the worlds largest livestock population - 535.78 million - according to the 20th Livestock Census 2020.6 The country faces a significant challenge with the increasing burden of animal diseases. This has prompted a proactive response from global pharmaceutical and biotech organisations, which are innovating to cure and prevent diseases. Similarly, pharmaceutical companies are developing new treatments, while biotech firms focus on advancing vaccines to prevent outbreaks.
Leading Indian companies like Hester Biosciences Limited are at the forefront of these efforts. They collaborate with premier research and academic institutions in India and internationally, including the USA, UK and Australia, to develop new vaccines for complex diseases. These collaborations extend to global partnerships to create vaccines tailored for domesticated animals, including pets, cattle, pigs, goats and sheep. This cooperative approach ensures India remains a pivotal player in the global fight against animal diseases, continuously working to improve animal health and safeguard livestock, which is essential for the countrys economy and food security.
Tech Advancements
Technological advancements in the Indian veterinary healthcare market significantly enhance animal health and productivity. Key developments include implementing precision livestock farming techniques that utilise sensors and data analytics to monitor animal health and optimise breeding and feeding practices.7 Adopting telemedicine platforms has improved access to veterinary care, particularly in rural areas, allowing remote consultations and diagnosis. The growth of the veterinary healthcare market in India is being driven by various technological advancements, including the integration of the Internet of Things (IoT) with animal health monitoring solutions.
POULTRY HEALTHCARE
INDIAN POULTRY HEALTHCARE INDUSTRY
Over the past four decades, Indias poultry sector has experienced the fastest growth among livestock species, becoming a key supplier of affordable protein by developing efficient value chains.
This growth is driven by rising disposable incomes and changing food habits. Consumers are shifting from traditional diets reliant on pulses to protein-rich foods like meat, eggs and dairy products. Increasing health and wellness awareness further boosts the demand for these products.
According to the Economic Survey (2022-23), the livestock sector, which includes dairy, poultry, meat, eggs and fisheries, achieved a compound annual growth rate (CAGR) of 7.9% from FY15 to FY21. Its contribution to total agricultural gross value added (GVA) rose from 24.3% in FY15 to 30.1% in FY21.8 5 6 7 8
5 https://www.giiresearch.com/report/moi1444082-india-veterinary-healthcare-market-share- analysis.html
6 https://vikaspedia.in/agriculture/agri-directory/reports-and-policy-briefs/20th-livestock-census
7 https://markwideresearch.com/india-veterinary-healthcare-market/
8 https://www.thepoultrysite.com/articles/the-expanding-landscape-of-indias-poultry-sector
The Department of Animal Husbandry and Dairyings annual report (2022-23) highlights that Indias poultry production has advanced significantly, transitioning from traditional farming to commercial production with advanced technological interventions. At present, broiler meat production in India stands at around 5 million tonnes annually.
GROWTH DRIVERS Surging Population
Indias rapidly growing population is driving a continuous demand for poultry products. With more people to feed, affordable and nutritious protein sources like chicken and eggs are in high demand. Rising incomes and evolving lifestyles lead to increased protein consumption, with chicken meat and eggs seen as healthier alternatives to red meat. Additionally, poultry products are generally more affordable than other protein sources, making them accessible to a larger portion of the population.
Rising Use of Technologies & Analytics
Advanced data analytics tools now empower Indian poultry producers to forecast demand and supply by analysing historical data, market trends and consumer behaviour. These tools help farmers make informed decisions on production volumes and timing. Given Indias diverse climate, seasonal variations impact poultry production. To address these challenges, farmers adjust breeding and hatching schedules to match market demand. For instance, in regions with extreme temperatures, production is often reduced during the summer to prevent stress on the birds.
ANIMAL HEALTHCARE
INDIAN ANIMAL HEALTHCARE INDUSTRY
The Indian animal healthcare industry, valued at $950 million, represents 2.5% of the global market and is expected to grow at a 6% compound annual growth rate. The industry has evolved from focusing solely on preventive medications to a comprehensive approach that includes productivity-enhancement treatments and overall animal healthcare. The sector is segmented into various products such as medicines, parasiticides and disinfectants, vaccines, medical devices and nutritional supplements. This development is driven by government initiatives and regulatory frameworks for animal welfare.
The Information Network for Animal Productivity and Health (INAPH) has created a digital infrastructure to provide real-time access to animal health data and monitor vaccination drives nationwide.
In collaboration with the World Organisation for Animal Health (WOAH), the Department of Animal Husbandry & Dairying organised a workshop on managing wildlife-origin disease risks. This workshop aimed to enhance stakeholder knowledge, conduct a gap analysis of risk assessment and management, simulate disease spillover scenarios and foster stakeholder communication.
Hester Biosciences Limited is part of a ^13,343 Crore programme to immunise Indias cattle, buffalo, sheep, goat and pig populations over five years. This programme includes the cost of vaccines and the execution of the immunisation plan.9
GROWTH DRIVERS
Rising Incidences of Zoonotic Diseases
The rapid spread of zoonotic diseases in India presents significant challenges for healthcare practitioners. Demographic changes, land encroachment and agricultural practices contribute to the increasing prevalence of these diseases. According to a National Centre for Disease Control (NCDC) newsletter, zoonotic disease outbreaks have been reported across all regions of India, with 29 states experiencing outbreaks in the past decade. Notably, the incidence of Scrub typhus has surged, with 2023 recording 29 outbreaks, the highest in a year.10
Zoonotic diseases, including bovine encephalopathy and various foodborne, vector-borne and waterborne infections, are also impacting animal health and growth in India. The government is implementing preventive measures to control these diseases and protect the human population. 9 10
9 https://www.businesstoday.in/industry/pharma/story/inside-india-animal-healthcare-the-vaccine- makerseyeing-rs-13343-crore-programme-258943-2020-05-21
10 https://ncdc.mohfw.gov.in/wp-content/uploads/2024/03/Newsletter-Volume-12-Issue3-July23-to-Sep23_ Ver6.pdf
Efforts by market stakeholders to raise awareness about zoonotic diseases and preventive measures are fostering growth in the animal healthcare market. Increased awareness and the availability of various treatment options are expected to drive demand for animal healthcare services in the coming years.
Increasing Government Support to Boost Animal Healthcare
Stringent laws and regulations by the Indian government are driving the animal health market in the country. The Indian government has implemented several initiatives to bolster the animal healthcare market. These include the National Livestock Mission (NLM) to improve livestock production, the Rashtriya Gokul Mission (RGM) to conserve indigenous bovine breeds and the Pashu Sanjivni Scheme, which provides Animal Health Cards and promotes traceability.11
The Department of Animal Husbandry and Dairying, under the Ministry of Fisheries, Animal Husbandry and Dairying, is actively working to contain the spread of Lumpy Skin Disease (LSD) in the country. This effort includes providing both financial and technical support. Financial assistance has been extended to states and Union Territories (UTs) as requested under the Assistance to State for Control of Animal Diseases (ASCAD) for the procurement of Goat Pox Vaccine doses for LSD vaccination. Additionally, guidelines and advisories on LSD control, including vaccination, treatment and surveillance, have been distributed to the states and Uts to ensure the disease is controlled within a specified timeline.
Moreover, the government is heavily investing in R&D to develop effective vaccines to combat rising zoonotic and foodborne diseases. Financial grants are being allocated to various veterinary research laboratories to help control disease spread. Additionally, enhanced vaccination facilities, veterinary healthcare services and improved treatment facilities are being established to promote better animal health in India.
PETCARE
INDIAN PETCARE INDUSTRY
The Indian petcare industry has grown significantly over the past decade, transitioning from pet ownership to responsible pet parenthood. This shift has improved the quality of life for pets and enhanced the role of caregivers. The sectors retail value increased from $347.23 million in 2019 to $498.44 million in 2021 and is projected to grow at a CAGR of over 19% by 2025.12
The rise in pet adoption has underscored the need for greater awareness about pet healthcare and innovative solutions to ensure a comfortable experience for pets and their owners. The pandemic further accelerated pet adoption, with many nuclear families in India and the US turning to pets for companionship. This trend boosted dog adoption and purchases and increased pet parents awareness of their pets healthcare needs.
GROWTH DRIVERS
Growing Pet Adoption and Humanisation
Recently, the number of pet-owning households in India has increased, reflecting a strong trend toward pet adoption. The shift to remote work during the COVID-19 pandemic has impacted mental health, leading many to adopt pets for companionship and support.
This growing trend has seen Indian families increasingly adopting dogs and treating them as family members. Annually, over 600,000 new dogs are adopted, driven by the rise of nuclear families, the need for companionship among seniors and the emotional bonds children form with pets.
Millennials, in particular, view pets as integral family members and are willing to spend a substantial portion of their income on care. This includes ensuring a healthy lifestyle for their pets through annual vaccinations, grooming, interactive therapy, a nutritious diet and even pet parties. Enhanced awareness and technology have further contributed to this holistic approach to petcare.
Personalised Petcare Centres
Grooming centres, spas, daycare facilities and pet-friendly fine dining establishments in India offer personalised sessions tailored to the pets skin, fur, size and condition. These services often include custom blankets, toys and leashes to enhance the animals comfort and security. 11 12
11 https://www.transparencymarketresearch.com/india-animal-health-care-market.html
12 https://www.ibef.org/research/newstrends/new-trends-in-animal-health-sector
Additionally, numerous start-ups provide innovative Services such as online platforms for pet ownership, veterinary advice and pet-friendly vacation planning. These services ensure pets are not left alone and engage in various activities. Apps are also available to help pet parents train and track their pets health.
This combination of personalised care and innovative services reflects a growing trend in Indias petcare industry aimed at improving pets overall well-being.
Pet Insurance Policies
Pet parents can receive financial assistance for veterinary expenses, life protection and even coverage for their pets deaths from companies like New India Insurance, United India Insurance and Oriental Insurance.
Pet Healthcare Advancement
Diabetes, obesity, kidney and thyroid issues can affect pets at various life stages, but recent advances in diagnostics, treatment and management have significantly improved their management, potentially extending pets lifespans. Additionally, various apps now help pet owners keep track of their pets health and locate veterinarians.
Pets have become integral to many families, offering emotional support and joy. This bond has spurred growth in industries related to pet food, medications, cleaning products and petcare items, all aimed at enhancing pets quality of life.
GOVERNMENT INITIATIVES
Livestock Health and Disease Control (LH & DC) Scheme
The scheme aims to enhance the animal health sector through prophylactic vaccination programmes, capacity building, disease surveillance and strengthening veterinary infrastructure.13
Objectives:
- Eradicate Peste des Petits Ruminants (PPR) by 2030
- Control Classical Swine Fever (CSF)
- Provide Veterinary Services
- Support State/UT Disease Control (ASCAD)
Animal Health System Support for One Health
In April 2023, Ministry of Fisheries, Animal Husbandry and Dairy, launched the Animal Pandemic Preparedness Initiative along with the World Bank-funded Animal Health System Support for One Health. These initiatives aim to enhance Indias readiness and response to potential animal pandemics, focusing on zoonotic diseases that threaten animal and human health, aligning with the One Health approach.
Furthermore, the government will develop a comprehensive programme to support dairy farmers. Efforts are already underway to control foot-and-mouth disease. Although India is the worlds largest milk producer, it faces low productivity among milch animals. This new programme will build on the success of existing schemes such as the Rashtriya Gokul Mission, National Livestock Mission and Infrastructure Development Funds for dairy processing and animal husbandry. In the interim budget for FY25, the government has increased the allocation for the Ministry of Animal Husbandry and Dairying to Rs.4,521 Crore.14
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