India’s Health-care Sector under GATS: Inquiry into Backward and Forward Linkages

With the opening up of trade in health services under the General Agreement on Trade in Services (GATS), India is finding herself in an advantageous position in terms of reaping the benefit of this enhanced global connectivity. Here, the presence of a sizeable middle class in urban areas, availability of information technology (IT)–skilled personnel and favourable domestic policies are encouraging all modes of service–trade flows to flourish. Consequently, the nature of forward and backward linkages of the medical and health services sector in the input–output chain is changing rapidly, indicating a major shift in both (a) composition of demand and (b) types of treatment provided. These changes are generally expanding the size of the market for medical care but a gradual transformation of a merit good (defined out of equity consideration) into a market good (defined out of efficiency consideration) cannot be denied. This concern calls for more comprehensive regulatory vigilance.