The healthcare sector in India has experienced significant growth and is continuously growing in the post-pandemic era. The industry has been one of the major driving forces in job creation and revenue generation for the country. This sector has shown steady growth due to demand and the size of the market. The industry is served by private players and the government which has a large share of the pie and serves more than half the population of the country through its government hospitals, and clinics across the nation.
The Indian healthcare market has experienced significant growth in recent years and is projected to continue expanding. Please check the below chart.
In the above chart, the industry was valued at over $370 billion and is expected to reach over $610 billion by 2026. The reason for significant demand in health care is due to multiple factors.
- The current government’s renewed focus on healthcare with new government schemes such as Ayushman Bharat, which has given access to lower and middle-income group people to both private and government hospitals.
- The current government has launched a national health mission to improve and accelerate primary healthcare services.
- Government-specialized schemes for women and children have helped in the demand boost for health care services.
- The population is another factor fueling the growth in the healthcare sector, Indian population is growing at 1.6% and the country has over 100 million elderly populations. Additionally, the rapid economic growth and rising middle income are the factors for the rise in the healthcare market in India.
- Another key factor contributing to the growth in the healthcare market is the private health insurance players with increased penetration and improved coverage by the companies. Furthermore, rising healthcare cost in India is another contributing factor.
In addition, changing demographics and changes in people’s lifestyles have given a significant rise in lifestyle diseases that have pushed the government to make investments in healthcare. The rise in demand is driving the increase in hospitals, diagnostic equipment, health insurance and demand for Dr and staff.
The below chart shows the projected growth in the Home Healthcare market.
This growth in demand from the healthcare sector has pushed the adoption of technologies within this sector. The technologies which have gained quick adoption in India are telemedicine and Artificial Intelligence.
Healthcare trends in 2025
With the rapid economic growth and demand in the country for better medical services it will be interesting to watch the healthcare trends this year, Here I have highlighted the trends to watch.
Budget Allocation has increased by 10% from the previous year.
Modi government is committed to improving the healthcare sector and services in the country and that has showed in the budget by allocating ₹99,858.56 crore to the Health Ministry in the 2025-26 budget. This represents a 10% increase from the previous year, aiming to enhance healthcare access and infrastructure. Which is a sign of their commitment towards the health of the people of the country?
Some other key announcements are:
- 36 Life savings drugs are exempted from customs duty.
- Promotion of Medical tourism
- Focus on nutrition.
The government will promote the PP model (Public Private Partnership) in health care though there are private groups in the healthcare sector, this model helps the government to make it more affordable for the people and better services can be given to the citizens. The first step towards Notable collaborations is shaping the healthcare landscape. The Adani Group has partnered with the U.S.-based Mayo Clinic to establish affordable health campuses in Mumbai and Ahmadabad. Each campus will feature hospitals, medical colleges, transitional care, and research facilities, leveraging Mayo Clinic's technical expertise.
Technological Integration
As technology continues to evolve at a rapid pace, the Modi government is dedicated to harnessing the potential of Artificial Intelligence (AI) to revolutionize healthcare. AI is becoming a focal point in how healthcare is delivered and health data is interpreted, AI is offering innovative solutions that improve both efficiency and patient care. India is quick to adapt technology and that has helped the demand for AI healthcare care market to rise. The AI healthcare market is expected to increase at a compound annual growth rate of 40.6% and reach $1.6 billion by 2025. The use of AI in the Indian healthcare system is happening in advanced diagnostics to tailor treatments to patients. AI is paving the way for smarter, more personalized healthcare solutions that benefit everyone.
Not only that the preventive health-tech sector (diagnostics, tests,) is expected to grow at a compound annual growth rate of 21%, reaching a market size of $197 million. This growth underscores a shift towards preventive care, emphasizing early detection and wellness to reduce the burden of chronic diseases. With the government’s commitment towards health tech and boosting the ecosystem, the country has come up with start-ups in health tech which are focused on AI-based devices, tags and mobile applications which help in patient monitoring and helps in preventive measures.
Expansion of Medical Education
The Modi government is dedicated to addressing the shortage of healthcare professionals and has already taken significant steps by adding 10,000 additional seats in medical education. This initiative is designed to close the gap in skilled healthcare workers across various specialities, ensuring improved healthcare delivery across the country. Over the past decade, the government has increased undergraduate (UG) and postgraduate (PG) medical education seats by 1.1 lakh, marking a 130% rise. In the coming year, another 10,000 seats will be added to medical colleges and hospitals, as part of a larger goal to introduce 75,000 seats over the next five years. This effort aims to enhance the doctor-patient ratio and make secondary and tertiary healthcare more accessible and affordable.
Each additional medical seat also means adding four beds to the associated medical college and hospital. Over five years, this initiative is expected to contribute 3 lakh more beds, which is nearly one-third of the current capacity in the public sector. To optimize costs, the government plans to focus on expanding existing medical colleges wherever feasible, rather than establishing new ones. This strategic approach ensures efficient resource utilization while addressing the critical need for more healthcare professionals and infrastructure.
Conclusion:
The healthcare sector showing all the positives and a huge potential to be one of the largest employment and revenue generators in the coming future. On the other hand, the government has sworn to provide all possible support to the sector, This healthcare budget announcement will boost the promises made by the government to improve healthcare access across the country and will have far-reaching positive impacts on rural areas. On the other hand, the sector is and will be generating opportunities for medical, non-medical and technical students. One of the government initiatives to boost medical tourism in the country will help in revenue generation and will provide opportunities for international collaborations which is already happening in the country. In my view, with the government’s promises and the way healthcare is growing, we need to wait and watch for what’s next,
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