Economic Leakage: What It Is and How It Affects Healthcare in India

When money spent on healthcare flows out of the country instead of staying local, that’s economic leakage, the outflow of financial resources from a local economy due to reliance on foreign goods, services, or expertise. In India’s healthcare system, this happens every time someone pays for imported oxygen equipment, buys medicines made abroad, or travels overseas for treatment that could be done here. It’s not just about lost dollars—it’s about lost jobs, weaker local supply chains, and higher costs for everyone.

Take oxygen therapy, a critical medical service for respiratory patients that requires reliable equipment and consistent supply. Many hospitals still rely on expensive imported oxygen concentrators because local manufacturing hasn’t caught up. That means every rupee spent on these devices leaves India—money that could’ve supported Indian engineers, repair technicians, or local factories. Same with medical tourism, when patients travel abroad for treatments they can get at home, often at a fraction of the cost. When someone goes to Thailand or Singapore for IVF or knee surgery, they’re not just spending on flights and hotels—they’re draining funds that should be circulating in Indian clinics, pharmacies, and rehab centers.

And it’s not just big-ticket items. Even small things like buying branded syrups from foreign companies instead of locally made alternatives add up. If you’re paying ₹1,200 for a bottle of imported syrup when a ₹300 Indian-made version works just as well, that’s economic leakage. It’s happening in oxygen therapy, diabetes meds, and even weight loss drugs like Ozempic—where insurance coverage gaps push people toward expensive imported brands instead of affordable local options.

The good news? India has the capacity to fix this. We have skilled manufacturers, growing R&D in Ayurvedic and allopathic medicines, and rising demand for home-based care. But fixing economic leakage means choosing local first—buying oxygen devices made in India, supporting Indian pharma brands, and asking your doctor if there’s a locally available alternative to that expensive imported drug. Every choice matters.

Below, you’ll find real examples of how economic leakage shows up in everyday healthcare decisions—from the cost of IVF to the price of diabetes pills—and what you can do about it.