Thailand’s Public Health Ministry plans to establish a Health Marketplace connecting public-private services and improve healthcare access through data initiatives. It will attract foreign patients via flexible medical visas and partner with pharmaceutical companies through investment agreements requiring technology transfers and local manufacturing. An MSD agreement on HIV medicine production marks Thailand’s first major commitment to becoming a clinical research and manufacturing hub.

Key Points

Access and Revenue Enhancement:

• Health Marketplace platform to connect public and private healthcare services
• Data & Access initiative linking national health databases
• Improved i-Claim system for private insurance at public hospitals
• Target Thai, foreign, and overseas government patients from nearby regions (Bhutan, Maldives, South Asia)
• Flexible medical visas matching treatment duration with advance electronic appointments

Research and Development Hub:

• Attract 5+ billion baht in investment, increasing GDP by 0.05%
• One-Stop Approval mechanism for streamlined applications
• Fast Track & Regulatory Sandbox for accelerated innovation
• Establish Thailand as clinical research base with global partnerships
• Clinical trials and R&D initiatives to attract international investment

Manufacturing and Strategic Partnerships:

• Target 37 billion baht in new investment, increasing GDP by 0.25%
• Pharmaceutical Supply Chain Roadmap reducing import reliance
• Technology transfer programs with drugmakers
• Offset Policy requiring overseas suppliers to invest, transfer technology, or create employment
• MSD agreement as first “quick win” involving HIV medicine research and production

Healthcare Access and Medical Tourism Development

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Thailand’s Public Health Ministry is implementing a comprehensive strategy to enhance healthcare accessibility and attract international patients. The initiative includes establishing a Health Marketplace that centralizes public and private healthcare services, alongside a Data & Access initiative linking national health databases to improve service delivery and inform policy decisions. The ministry will also upgrade i-Claim, the insurance reimbursement system for private claims at public hospitals. By targeting affluent Thai patients, foreign visitors, and overseas governments, particularly from neighboring regions like South Asia, Bhutan, and the Maldives, Thailand aims to generate sustainable revenue for its health system. A key proposal involves making medical visas more flexible to match individual treatment durations, while incorporating electronic appointments, advance referrals, and immigration data integration to streamline the patient experience and ensure security.

Market Expansion and Sector Collaboration

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The ministry emphasized that both public and private sectors have substantial room to grow without direct competition. Thailand’s total healthcare spending reaches 4.59% of GDP, exceeding 800 billion baht, while public and private hospital sectors combined account for only one-third of this figure. Public Health Minister Pattana highlighted that the ministry’s budget totals 350-360 billion baht, compared to private hospital groups’ combined revenue of approximately 300 billion baht. This significant gap indicates enormous potential to attract additional healthcare spending through strategic market positioning. Rather than competing, the sectors can complement each other by serving different patient segments and expanding overall market capacity.

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Research, Manufacturing, and International Investment

The ministry is positioning Thailand as a clinical research hub through the Research and Development Hub, targeting over 5 billion baht in new investment and 0.05% GDP growth. Initiatives include establishing a One-Stop Approval mechanism, implementing Fast Track & Regulatory Sandbox measures, and creating a Data & Research Platform. The manufacturing pillar aims to attract 37 billion baht in investment and achieve 0.25% GDP growth.

Through an Offset Policy, international pharmaceutical companies must reciprocate government procurement benefits via investments, technology transfers, or employment creation. Preliminary negotiations with ten global drugmakers, including Pfizer, Roche, and Novartis, have yielded MSD’s September 2026 memorandum of understanding to expand clinical research and transfer HIV medicine production technology to Thailand’s Government Pharmaceutical Organization, making Thailand one of only two countries producing this medicine.

Dario Amodei, Sam Altman and Elon Musk, the three musketeers at the centre of the AI race, are suddenly talking about hitting the brakes. Jefferies’ Head of Global Equity Strategy Chris Wood believes that if the AI trade loses momentum, global investors may once again turn to India, whose structural growth story has remained intact even as technology giants dominate emerging market allocations.

“It is reasonably clear that for India to become a prime point of focus again for emerging market equity investors, the AI story has to blow up,” Wood wrote in his latest GREED & fear newsletter. The three AI-linked stocks — TSMC, Samsung Electronics and SK Hynix — account for 29% of the MSCI Emerging Markets Index, compared with India’s 11%. But with Indian bank credit growing 19.1%, corporate lending accelerating and earnings growth expected to improve, Wood sees the country’s domestic resilience becoming harder for investors to ignore.

The report describes the development as “bizarre” and offers two possible explanations. The first is that a coordinated pause, presented as a safety measure, could help the biggest AI companies build a regulatory moat, particularly if open-source models from China are later restricted. The second is more concerning: the cost of computing may be becoming unsustainable, while AI models could be starting to plateau. Wood says he has no inside track but considers both explanations plausible.

Either way, a reversal in the AI trade could redirect global investor attention towards India, whose weighting in the MSCI Emerging Markets Index has been overshadowed by the combined 29% share of Taiwan Semiconductor Manufacturing Co., Samsung Electronics and SK Hynix. India accounts for 11% of the index, according to the report.

Also Read |India’s ‘anti-AI’ trade hides 42 AI-enabler stocks that rallied 60% already: Goldman Sachs

India’s growth story has survived the shock

Wood’s argument for India is not based only on a possible unwind in the AI trade. He says the country’s domestic economic momentum has remained stronger than expected despite geopolitical stress and higher energy risks.
Bank credit was growing 19.1% year-on-year at the end of August. Corporate lending rose 21.6% in July, while loans to micro, small and medium industrial enterprises increased 24.9%.The report says the pickup in SME lending may indicate that recent GST and labour reforms, along with the government’s focus on improving the ease of doing business, are beginning to produce results.

The acceleration in corporate lending also points to the possibility that India’s long-awaited private sector capital expenditure cycle is finally beginning.

Wood says India is on track for real GDP growth of 6.5%-7% and nominal GDP growth of around 11%-12% in the current fiscal year. Jefferies’ head of India research, Mahesh Nandurkar, expects earnings growth to accelerate from 14% this fiscal year to 17% next year.

Other indicators are also strengthening. GST receipts rose 14.8% year-on-year in August, power demand growth climbed from 1.8% in January-March to 9.4% in April-August, and residential real estate sales in the top seven cities rose 7% in the first seven months of the year.

Why Wood prefers India’s midcaps

From an equity market perspective, Wood continues to find the mid- and small-cap segments more compelling than large caps because of India’s “huge reservoir of entrepreneurial talent.”

The Nifty MidCap 100 Index has risen 1.5% this year and 95% since the beginning of 2023. The Nifty, by comparison, is down 10.9% year-to-date and has gained 29% since the start of 2023.

That outperformance has come despite richer valuations. The Nifty MidCap 100 trades at 26.3 times 12-month forward earnings, compared with 17.3 times for the Nifty.

Wood argues that the strength of the mid- and small-cap market is not necessarily unhealthy. The growing contribution of these companies has also reduced the share of India’s top 20 stocks in total market capitalisation, a trend that contrasts with the global market, where passive investing has increased concentration in the largest companies.

Credit, gold loans and domestic flows

Another source of resilience is the continued flow of domestic money into equities. Net inflows into domestic equity mutual funds have averaged Rs 38,800 crore a month so far this year.

Those flows, however, are being absorbed by a renewed wave of equity issuance. Monthly equity supply rose to $9.5 billion in August from just $1 billion in April, limiting the upside for the benchmark Nifty.

Wood also highlights India’s organised gold-loan market as a potential source of additional consumer spending. Household gold holdings were estimated at $3.9 trillion at the end of March, while organised gold loans stood at $197 billion. Gold loans have grown at an annualised rate of 32% over the past three years.

Banks charge borrowers 9.25%, while the loan-to-value ratio remains below 60%. The report says the expansion of gold-backed credit could support consumer confidence while creating a profitable lending opportunity for banks.

The risk remains energy

The principal threat to India’s resilience is the energy shock. The capture of the port of Mokha and two islands in the Red Sea by the Houthis, along with damage to the East-West oil pipeline, has left Iran controlling the flow of oil through the Strait of Hormuz and the Houthis controlling the route through the Strait of Bab al-Mandeb.

Wood calls this a “nightmare scenario for markets” and says the need for energy exposure in portfolios is now more obvious than ever. Brent crude was trading at $106 a barrel at the time of the report.

India has so far managed the risk by continuing to buy discounted Russian oil while also purchasing more expensive energy from the US. Russia’s share of India’s crude imports rose from 20% in February to more than 50% in July.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)