India’s healthcare industry has expanded rapidly in both scale and scope, driven by rising public and private spending, wider coverage, and growing service delivery. The sector benefits from a large pool of highly qualified medical professionals, while also maintaining cost competitiveness. For instance, surgeries in India cost roughly a tenth of those in the US or Western Europe, making it an attractive global healthcare destination.
India is strengthening primary healthcare through the expansion of 1,50,000 Ayushman Arogya Mandirs, enhancing access to comprehensive care across urban and rural areas. Digital workforce solutions are improving efficiency by reducing HR costs by ~31% and accelerating onboarding by 3–4 times, strengthening healthcare delivery systems. AI integration is expected to create nearly 3 million new jobs by 2028, further boosting the industry’s role in inclusive growth. However, infrastructure gaps remain, with bed density at 1.6 and nurse density at 1.9 per 1,000 population, and India will require an additional ~6.5 lakh nurses and 1.6 lakh doctors by 2030 to meet rising demand.
India’s healthcare deal landscape in 2025 reflected a shift toward large, high-value transactions and consolidation-led growth, with M&A volumes rising significantly and healthcare emerging as a key sector driving deal activity. Healthcare continued to be a key contributor to India’s M&A rebound, with deal volumes rising ~82% YoY, driven by domestic consolidation and growing interest in scalable healthcare platforms. Notable transactions included Access Healthcare raising US$ 1.45 billion from New Mountain Capital for a majority stake and AGS Health securing US$ 1.35 billion investment from Blackstone, highlighting strong investor interest in healthcare services and outsourcing platforms. The year also witnessed multi-billion-dollar acquisitions and platform expansions across hospitals, diagnostics, and healthcare services, indicating increasing consolidation and strategic scaling.
Medical tourism is a fast-growing segment. Valued at US$ 7.69 billion in 2024, the market is projected to reach US$ 14.31 billion by FY29. Foreign tourist arrivals (FTAs) in India reached approximately 6.98 million between January and October 2025, reflecting a steady recovery in inbound tourism. The Government of India plans to spend ₹3.5 crore (US$ 0.40 million) in FY27 to promote India as a global tourist destination, supported by factors such as ease of visa norms, improved safety and security, targeted promotional efforts, favourable foreign policy environment, affordability of travel, and favourable exchange rates.
Government support continues to play a central role in sector growth. In Union Budget 2026–27, the allocation for the Department of Health & Family Welfare (DoHFW) was increased to Rs. 1,01,709.21 crore (US$ 11.51 billion), marking a 9.45% rise over the previous year. The government has allocated Rs. 9,500 crore (US$ 1.08 billion) for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) in FY27, with the scheme currently covering 12 crore families. As of December 2025, around 42.48 crore Ayushman Cards have been created. While, as of October 2025, with over 42 crore beneficiaries enrolled, and more than 33,000 hospitals empanelled across India. Additionally, 86.51 lakh senior citizens aged above 70 years have been provided Ayushman Vay Vandana Cards, further expanding healthcare coverage.
India’s pharmaceutical sector is a global leader. Exports stood at Rs. 2,59,658 crore (US$ 30.38 billion) in FY25 and are projected to reach Rs. 30,76,500 crore (US$ 350 billion) by FY47. The India-UK Free Trade Agreement (July 2025) further boosts pharma exports with zero tariffs on nearly 99% of shipments to the UK. FDI inflows have been robust as well, with Rs. 2,10,940 crore (US$ 24.62 billion) entering drugs and pharmaceuticals between April 2000-June 2025, alongside Rs. 1,04,970 crore (US$ 12.25 billion) in hospitals and diagnostics.
India's seven standalone health insurance companies (SAHIs) have captured 41% market share of the non-life insurance sector as of April-December FY25, up from 30% in FY20, driven by superior product innovation and customer support. Standalone health insurers are projected to achieve 20-21% growth in FY26, outpacing general insurance growth of 13%, driven by retail expansion and enhanced agency networks.
India’s health-tech sector is projected to reach Rs. 4,43,500 crore (US$ 50 billion) by 2033, driven by AI and automation, supporting faster claim decisions and smarter underwriting.
The digital and MedTech segments are expanding quickly. The Indian digital health market, valued at Rs. 75,658 crore (US$ 8.79 billion) in 2024, is projected to grow to Rs. 4,11,275 crore (US$ 47.80 billion) by 2033 at a CAGR of 17.67%. The medical devices sector is also expected to reach Rs. 4,34,350 crore (US$ 50 billion) by FY31, supported by start-up innovation, demand for quality healthcare, and supportive policies.
Research and education are gaining traction. 20 All India Institute of Medical Sciences (AIIMS) institutions have established a nationwide research consortium to move from isolated studies to coordinated, high-quality biomedical research. KEM Hospital Research Centre, Pune, partnered with The Gates Foundation to launch a collaborative platform for accelerating public health research in India, while Christian Medical College (CMC), Vellore, entered into a collaborative research platform project with the Gates Foundation to support early career researchers.
AYUSH is being integrated into global systems. The Ministry of AYUSH has developed the International Cooperation Scheme, signing 25 country-level MoUs, 52 institute-to-institute MoUs, and 15 AYUSH Chair MoUs. WHO and the Ministry have also developed standardised terminology documents for Ayurveda, Unani, and Siddha, ensuring global recognition. Budgetary allocation for AYUSH was raised to Rs. 3,992 crore (US$ 465 million) in FY26.
Policy measures are improving access and affordability. Under GST 2.0, taxes on most medical devices and consumables have been reduced to 5% from 12-18%. States like Uttar Pradesh are introducing automatic medicine dispensing machines to improve last-mile access. Defence services launched the SeHAT OPD portal for telemedicine, while the Health Ministry rolled out U-WIN to digitise vaccination records nationwide.
Healthcare innovation is another growth pillar. Innovaccer raised Rs. 2,356 crore (US$ 275 million) in January 2025 to expand AI and cloud-based health solutions. Pfizer awarded grants of over Rs. 8 crore (US$ 0.90 million) to 14 Indian health-tech startups under its INDovation programme in February 2026, supporting next-generation innovations across areas such as oncology, NCDs, and maternal health. DNA Wellness announced Rs. 200 crore (US$ 23.98 million) investment to set up 100 cervical cancer labs by 2027. The Government has also approved a Rs. 64,000 crore (US$ 7.7 billion) project for 22 AI Institutes of Precision Medicine, positioning India at the forefront of personalised healthcare.
India’s healthcare sector is entering a transformative phase, blending innovation, technology, and inclusivity to redefine global standards of care. Strengthened by strong policy support, rising investments, digital health integration, and growing medical tourism, the industry is set to deliver accessible and affordable healthcare for all. With sustained focus on research, MedTech, and AI-driven solutions, India is well on its way to becoming a global leader in healthcare delivery, innovation, and medical excellence, contributing significantly to the nation’s journey towards a healthier, more resilient future.
