Market Reports

Healthcare Industry in India

1	Overview: Indian Healthcare Sector
2	Quick Facts: India’s Healthcare Industry
3	Healthcare Market Growth
4	Key Government Initiatives and Projects
5	Government Regulation and Standards
6	Why India for Healthcare Products and Services?
7	Our Team

Overview: Indian Healthcare Sector

Drivers

Increasing Life Expectancy
The rise in life expectancy in India is a key factor supporting the growth of the healthcare industry, as it leads to greater demand for medical services and skilled healthcare workers, especially by the aging population.

Health Insurance Penetration
Health insurance coverage in India has grown to approximately 40% of the population in 2023, up from 20% in 2015, encouraging more people to seek healthcare services.

Government Initiatives
The “Ayushman Bharat” scheme aims to cover over 500 million people, providing health insurance for secondary and tertiary care hospitalizations.

Growing Chronic Disease Burden
Non-communicable diseases (NCDs) account for ~61% of all deaths in India, creating a pressing need for healthcare services focused on chronic disease management.

Challenges

Infrastructure Limitations
A significant lack of healthcare infrastructure, especially in rural areas, with only 0.7 hospital beds per 1,000 people, leading to access issues.

High Out-of-Pocket Expenditure
About 62% of total healthcare spending in India is out-of-pocket, creating financial barriers for patients seeking necessary treatments.

Shortage of Healthcare Professionals
India faces a shortage of healthcare workers, with an estimated 1.4 million doctors needed to meet the World Health Organization (WHO) recommendation of 1 doctor per 1,000 population.

Limited Health Insurance Coverage
Although health insurance coverage is growing, approximately 60% of the population still lacks any form of health insurance, limiting access to necessary services.

Rising Healthcare Costs
Healthcare costs are rising significantly, with estimates suggesting a 12-15% annual increase, making it challenging for many individuals to afford necessary treatments.

Opportunities

Telemedicine and Digital Health
With the digital health market expected to reach INR 800 billion by 2025, healthcare providers can leverage technology to offer remote consultations and monitoring. This enhances patient convenience and reduces the burden on physical healthcare facilities.

Pharmaceuticals and Biotech Expansion
With the Indian pharmaceutical market projected to reach INR 10.4 trillion by 2030, Indian companies can expand their reach and cater to international demands. Investing in research and development can also foster innovation, positioning India as a leader in biopharmaceuticals.

Public-Private Partnerships
Public-private partnerships can leverage private investment to build hospitals, clinics, and other facilities, especially in rural areas. By pooling resources and expertise, these partnerships can lead to more efficient healthcare systems and improved access to services.

Innovative Health Technologies
The rise of health tech startups presents a wealth of opportunities for innovation in the healthcare space. From wearable devices to AI-driven diagnostics, technology can enhance patient care and operational efficiency. Investments in these technologies can improve health outcomes while reducing costs for providers and patients alike.
Increased Focus on Preventive Care
A growing recognition of the importance of preventive healthcare in India is being driven by rising health awareness. This shift provides opportunities for companies to offer wellness programs, screenings, and lifestyle management services. By emphasizing prevention, healthcare providers can not only improve public health but also reduce long-term healthcare costs.

Quick Fact: India’s Healthcare Industry

The Indian healthcare sector is one of the largest sectors in terms of both revenue and employment.
The Indian healthcare industry is experiencing remarkable growth, with private equity and venture capital investments exceeding INR 84.3 billion in the first five months of 2024 alone, reflecting a 220% increase compared to the previous year.
The hospital industry in India accounts for 80% of the total healthcare market.
With a compound annual growth rate (CAGR) exceeding 8%, India’s hospital industry is projected to reach INR 16,315.6 billion by 2032.
During the period from April 2000 to March 2024, the healthcare sectors of hospitals and diagnostic centers, and medical and surgical appliances saw inflows of INR 865 billion and INR 276 billion, respectively.
Diagnostics industry in India is currently valued at INR 320 billion. The share of the organized sector is almost 25% in this segment (15% in labs and 10% in radiology).
India ranks 10th in the Medical Tourism Index (MTI) for 2022-2023 out of 46 destinations of the world.
Foreign tourists’ arrival for medical purposes increased from 1.8 Lakh in 2020 to 6.3 Lakh in 2023.
The Indian pharmaceutical industry ranks third globally in pharmaceutical production by volume.
India manufactures about 60,000 different generic brands across 60 therapeutic categories and accounts for 20% of the global supply of generics.
From April 2000 to March 2024, the drugs and pharmaceuticals sector attracted a total Foreign Direct Investment of INR 1,902.8 billion.
India accounts for 60% of global vaccine production, contributing 40 to 70% of the WHO demand for Diphtheria, Pertussis, and Tetanus (DPT) and Bacillus Calmette–Guérin (BCG) vaccines, and 90% of the WHO demand for the measles vaccine.

Healthcare Market Growth

India’s healthcare market continues to expand rapidly, driven by the increasing demand for quality healthcare services due to a population exceeding 1.4 billion people. As per IBEF, the Indian healthcare industry sustained its strong growth in 2023, reaching a value of INR 31, 519 billion, fuelled by contributions from both the private sector and government.

India’s healthcare infrastructure is rapidly improving, with the government making substantial investments in both the public and private sectors. The Union Budget for 2024-25 has allocated INR 892.87 billion for healthcare, focusing on enhancing digital infrastructure and expanding healthcare facilities. The hospital sector, in particular, represents approximately

80% of healthcare investment opportunities and is projected to reach INR 16,315.61 billion by 2032, growing at a CAGR of over 8%.

Medical Tourism
The Indian medical tourism market was valued at INR 649 billion in 2024 and is projected to grow to INR 1,208 billion by 2029. The country offers high-quality healthcare at competitive prices, attracting patients from the Middle East, Africa, and Southeast Asia for treatments like cardiac surgery, orthopedic procedures, and fertility treatments. The government’s focus on medical tourism promotion through the National Medical & Wellness Tourism Promotion Board (NMWTPB) is expected to further boost this sector. The top 5 medical tourism destinations in India are Chennai, Mumbai, Goa, New Delhi, and Ahmedabad.

Telemedicine Adoption
The adoption of telemedicine has surged in India, especially during the COVID-19 pandemic. Government initiatives like the National Telemedicine Taskforce and eSanjeevani have brought healthcare to remote areas, providing virtual consultations, health monitoring, and follow-up care. The use of telemedicine continues to expand with the establishment of various projects such as the Integrated Disease Surveillance Project (IDSP) and the National Rural Telemedicine Network, facilitating access to healthcare in rural and underserved areas.

Pharmaceutical Industry
India’s success during the pandemic was largely attributed to the rapid and efficient expansion of manufacturing capacities by its pharmaceutical leaders. The country’s deep technical expertise, highly skilled workforce, and ability to scale production are key factors that will continue to drive advanced manufacturing standards. While the COVID-19 crisis accelerated the optimization of production processes, India’s growth in the vaccine sector has been steady over the years. Over the past two decades, leading pharmaceutical companies have significantly invested in expanding their manufacturing capabilities to meet both global and domestic demand. As a result, India now accounts for 60% of the world’s vaccine supply.
Health insurance penetration in India is growing, aided by initiatives like the Ayushman Bharat Yojana, which aims to provide healthcare coverage for over 500 million people. The private health insurance sector is also expanding, with more middle-class families opting for coverage due to rising healthcare costs.

Key Government Initiatives and Projects

Pradhan Mantri Swasthya Suraksha Yojana (PMSSY):
The “Pradhan Mantri Swasthya Suraksha Yojana” was launched with the aim of addressing regional disparities in access to affordable and reliable tertiary healthcare services, as well as enhancing facilities for quality medical education in the country. PMSSY has two components: –
- Setting up of AIIMS
- Upgradation of Government Medical College (GMC)/ Institutions.
AYUSH:
The rapid growth of the AYUSH sector, including advancements in medicinal plant cultivation, AYUSH education, and global recognition of Yoga and Ayurveda, has led to new opportunities for revenue and employment. These efforts align with the four pillars of Ayushman Bharat — Ayushman Bharat- Health and Wellness Centre’s (AB-HWC), the Ayushman Bharat- Jan Arogya Yojana (AB PM-JAY), Ayushman Bharat- Digital Mission (ABDM), and Pradhan Mantri Ayushman Bharat- Health Infrastructure Mission (PM-ABHIM) — which aim to strengthen healthcare infrastructure and integrate AYUSH into mainstream health services. Key initiatives by the Ministry of AYUSH include:
- National AYUSH Mission (NAM):
  Focuses on cost-effective AYUSH services, with ₹4607.30 Crore allocated for 2021-2026 to upgrade hospitals, dispensaries, and set up 12,500 Health & Wellness Centers.
- Champion Services Sector Scheme for Medical Value Travel:
  Aims to establish AYUSH super-specialty hospitals, enhance skill development, and promote AYUSH exports.
- Aogusy Scheme:
  Enhances the quality and manufacturing standards of AYUSH drugs.
- Export Promotion Council for AYUSH Products:
  A collaboration with the Ministry of Commerce to promote exports and harmonize regulatory practices.

FSSAI Collaboration: Promotes Ayurveda-based food products.

International Telemedicine Initiatives:
- Pan-African eNetwork Project: Provides telemedicine services to African nations through India.
- SAARC Telemedicine Network: Facilitates telemedicine services between South Asian countries.
AROGYASREE:
A mobile telemedicine platform that connects rural clinics with hospitals for consultations and continuous monitoring. Supported by the Indian Council of Medical Research (ICMR), it integrates wearable health monitoring devices.
National Rural AYUSH Telemedicine Network:
A telemedicine initiative focused on promoting traditional Indian medicine (Ayurveda, Yoga, Naturopathy, and Homeopathy) for rural populations.

Government Regulation and Standards

The National Accreditation Board for Hospitals and Healthcare Providers (NABH) plays a crucial role in establishing and enforcing standards for healthcare institutions across India. NABH grants accreditation to hospitals, clinics, and other healthcare facilities that meet its rigorous criteria for quality and patient safety.

A key regulation in India’s healthcare sector is the Clinical Establishments (Registration and Regulation) Act, 2010. This law mandates that all clinical establishments, such as hospitals, clinics, and diagnostic centers, must register with the government and adhere to specific standards and guidelines for healthcare services. Additionally, it requires the creation of State Medical Councils and State Nursing Councils to oversee the registration and regulation of healthcare professionals.

Another significant regulation is the Drugs and Cosmetics Act, of 1940, which governs the import, production, and sale of drugs and medical devices in India. According to this act, all drugs and medical devices must receive approval from the Central Drugs Standard Control Organization (CDSCO) before they can be marketed or sold in the country.

Why India for Healthcare Services?

India has emerged as a leading hub for medical tourism due to its affordability, highly skilled healthcare professionals, and state-of-the-art medical facilities.
The country offers a wide range of treatments, from modern procedures like cardiac surgeries and organ transplants to traditional practices such as Ayurveda, creating a unique blend of modern and holistic healthcare. With shorter waiting times and internationally accredited hospitals, patients can access world-class care at competitive prices.
Additionally, the Indian government’s “Heal in India” initiative is further boosting the sector by simplifying visa and forex norms, enhancing India’s appeal as a top destination for medical tourism.

Major Investments and Acquisitions Shaping India's Healthcare Landscape

IIT Bombay has teamed up with Blockchain for Impact (BFI) to receive INR 758 billion investment, which will be used to develop affordable healthcare technologies. This investment is part of the larger INR 1,265 million BFI-Biome initiative, designed to address critical health issues and promote biomedical innovation.
In September 2023, Nirma, a prominent Indian conglomerate, purchased a 75% stake in Glenmark Life Sciences, a leading pharmaceutical firm, for INR 58,088.02 This acquisition ranks among the largest healthcare M&A transactions in India for the year.
DocPlix, a health-tech startup, has secured INR 12 million in a bridge funding round led by Inflection Point Ventures (IPV). The company aims to digitize health records for India’s 1.4 billion people, with a focus on improving healthcare accessibility.
In May 2023, Temasek, a Singapore-based investment firm, invested INR 168.62 billion in Manipal Health Enterprises, a prominent healthcare provider in India, underscoring the increasing interest in the Asian healthcare market.
In October 2024, HealthifyMe and Primus Life secured the largest funding rounds, each raising INR 1,686 million.