Health care industry in india

Introduction 

Healthcare has become one of India’s largest sectors, both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services, and increasing expenditure by public as well as private players.

India’s healthcare delivery system is categorised into two major components - public and private. The government, i.e., the public healthcare system, comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of Primary Healthcare Centers (PHC s) in rural areas. The private sector provides most secondary, tertiary, and quaternary care institutions with a major concentration in metros, tier-I, and tier-II cities.

India's competitive advantage lies in its large pool of well-trained medical professionals. India is also cost-competitive compared to its peers in Asia and Western countries. The cost of surgery in India is about one-tenth of that in the US or Western Europe. The low cost of medical services has resulted in a rise in the country’s medical tourism, attracting patients from across the world. Moreover, India has emerged as a hub for R&D activities for international players due to its relatively low cost of clinical research.

Market Size

The Indian healthcare sector, valued at Rs. 9,42,590 crore (US$ 110 billion) in 2016 and Rs. 31,87,668 crore (US$ 372 billion) in 2023, is projected to reach Rs. 54,67,022 crore (US$ 638 billion) by 2025, growing at a robust 17.5-22.5% CAGR. Healthcare spending accounted for 3.3% of India’s GDP in 2022 and is expected to rise to 5% by 2030, reflecting the sector’s increasing role in the economy.

India continues to expand its healthcare infrastructure. In FY 26, private hospitals are expected to add over 4,000 beds with investments of Rs. 11,500 crore (US$ 1.34 billion). As of April 1, 2025, the country has 13,86,150 registered allopathic doctors and 7,51,768 AYUSH practitioners, resulting in a doctor-to-population ratio of 1:811. Medical education capacity is also growing, with 157 new medical colleges being established by upgrading district and referral hospitals, of which 131 are operational. Under the Central Sector Scheme for new AIIMS, 22 institutes have been approved, and undergraduate courses have commenced in 19. By April 2025, India had 74,306 postgraduate seats and 1,18,190 MBBS seats, strengthening the talent pipeline.

Investment activity in the sector remains strong. According to the Grant Thornton Bharat Pharma & Healthcare Deal tracker, Q 1 2025 witnessed 71 deals worth Rs. 22,279 crore (US$ 2.6 billion), with focus areas including speciality pharma, biotech, digital health, and CRAMS. The Drugs & Pharmaceuticals sector alone attracted FDI inflows of

Rs. 2,10,940 crore (US$ 24.62 billion) between April 2000 and June 2025. Hospitals and diagnostic centres received Rs. 1,04,970 crore (US$ 12.25 billion), while medical and surgical appliances drew Rs. 33,933 crore (US$ 3.96 billion).

Health insurance penetration is steadily rising. Total health insurance premiums stood at Rs. 1,18,688 crore (US$ 13.84 billion) in FY 25, up from Rs. 1,09,007 crore (US$ 12.72 billion) in FY 24. In July 2025, standalone health insurers’ premiums rose 10.4% YoY to Rs. 3,622 crore (US$ 422.7 million), reflecting growing adoption and demand for coverage.

Digital health and telemedicine are emerging as key growth drivers. The Indian digital health market, valued at Rs. 75,658 crore (US$ 8.79 billion) in 2024, is projected to reach Rs. 4,11,275 crore (US$ 47.80 billion) by 2033 at a CAGR of 17.67%. The telemedicine market is expected to reach Rs. 47,130 crore (US$ 5.4 billion) by 2025, supported by demand for remote healthcare and advances in technology.

Medical tourism continues to strengthen India’s global healthcare position. The market, valued at US$ 7.69 billion in 2024, is expected to reach US$ 14.31 billion by 2029. In 2023, around 634,561 foreign tourists visited India for medical treatment, accounting for 6.87% of total arrivals. With a medical value travel industry of US$ 5-6 billion and over 500,000 international patients annually, India is among the leading global destinations for advanced treatment.