Commerce Dashboard
The Healthcare industry size is estimated to reach US$ 193.83 billion by 2020 and US$ 372 billion by 2022.

Healthcare Industry in India

    Last updated on Mar, 22 2021

Indian Healthcare Industry Report  (Size: 595.33 KB ) (January, 2021)


Healthcare has become one of India’s largest sector, 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 private players.

Indian healthcare delivery system is categorised into two major components  public and private. The Government, i.e. 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 centres (PHCs) in rural areas. The private sector provides majority of secondary, tertiary, and quaternary care institutions with major concentration in metros and 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. India ranks 145 among 195 countries in terms of quality and accessibility of healthcare.

Market Size

The healthcare market can increase three-fold to Rs. 8.6 trillion (US$ 133.44 billion) by 2022.

Indian medical tourism market is growing at 18% y-o-y and is expected to reach US$ 9 billion by 2020. There is a significant scope for enhancing healthcare services considering that healthcare spending as a percentage of Gross Domestic Product (GDP) is rising. The Government’s expenditure on healthcare sector has grown to 1.6% of the GDP in FY20BE from 1.3% in FY16.

Health insurance is gaining momentum in India. Gross direct premium income underwritten by health insurance grew 17.16% y-o-y to Rs. 51,637.84 crore (US$ 7.39 billion) in FY20.


Between April 2000 and September 2020, FDI inflows for drugs and pharmaceuticals sector stood at US$ 16.87 billion, according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Some of the recent initiatives in the Indian healthcare industry are as follows:

  • In December 2020, a new COVID-19 vaccine delivery digital platform called 'CO-WIN' is being prepared to deliver vaccines. As a beneficiary management tool with different modules, this user-friendly mobile app for recording vaccine data, is in the process of establishing the ‘Healthcare Workers’ database, which is in an advanced stage across all states/UTs.
  • As of December 2020, under universal immunization programmes, ~1.54 lakh ANMs (auxiliary nurse midwives) are operating as COVID-19 vaccinators. For further expansion of vaccinators, the government plans to take collaborative effort with states and UTs.
  • In November 2020, EEPC India and the National Design Institute teamed up to facilitate and improve design and technology for the medical device industry to help meet the increasing needs of the country’s health sector, especially considering the COVID-19 pandemic.
  • In October 2020, All India Institute of Ayurveda signed a MoU with Amity University for Ayurveda Research.

Government Initiatives

Some of the major initiatives taken by the Government of India to promote Indian healthcare industry are as follows:

  • In December 2020, the Union Cabinet approved a memorandum of understanding for cooperation between the Indian Government and the Ministry of Health of the Government of the Republic of Suriname in the field of health and medicine.
  • The government plans to increase the number of research and COVID-19 RT-PCR labs to strengthen COVID-19 testing services by making COVID-19 testing affordable and more accessible to every citizen.
    • In November 2020, a mobile COVID-19 RT-PCR lab was launched at the Indian Council of Medical Research (ICMR) in New Delhi. The laboratory has NABL accreditation and is accredited by the ICMR.
  • In Union Budget 2020 21, Rs. 35,600 crore (US$ 5.09 billion) has been allocated for nutrition-related programmes.
  • The Government has announced Rs. 69,000 crore (US$ 9.87 billion) outlay for the health sector that is inclusive of Rs. 6,400 crore (US$ 915.72 million) for PMJAY in Union Budget 2020–21.
  • The Government of India aims to increase healthcare spending to 3% of the Gross Domestic Product (GDP) by 2022.


Following are the achievements of the Government:

  • The number medical colleges in India increased to >560 in November 2020 from 412 in FY16.
  • According to Sample Registration System Bulletin-2016, India has registered a 26.9% reduction in Maternal Mortality Ratio (MMR) since 2013.
  • On December 14, 2020, eSanjeevani telemedicine service of the Health Ministry crossed 1 million (10 lakh) teleconsultations, since its launch, enabling patient-to-doctor consultations from the confines of their home, as well as doctor-to-doctor consultations.  

Road Ahead

India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities, thus catering to a greater proportion of population. Besides, Indian medical service consumers have become more conscious towards their healthcare upkeep.

Indian healthcare sector is much diversified and is full of opportunities in every segment, which includes providers, payers, and medical technology. With the increase in the competition, businesses are looking to explore for the latest dynamics and trends which will have positive impact on their business. The hospital industry in India is forecast to increase to Rs. 8.6 trillion (US$ 132.84 billion) by FY22 from Rs. 4 trillion (US$ 61.79 billion) in FY17 at a CAGR of 16–17%.

The Government of India is planning to increase public health spending to 2.5% of the country's GDP by 2025.

India's competitive advantage also lies in the increased success rate of Indian companies in getting Abbreviated New Drug Application (ANDA) approvals. India also offers vast opportunities in R&D as well as medical tourism. To sum up, there are vast opportunities for investment in healthcare infrastructure in both urban and rural India.

Note: Conversion rate used for December 2020 is Rs. 1 = US$ 0.014

References: Department for Promotion of Industry and Internal Trade (DPIIT), RNCOS Reports, Media Reports, Press Information Bureau (PIB)

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Healthcare India

Healthcare Clusters
Healthcare Clusters in India


Brand India Pharma


With over 2.5 million operations performed and 20 million patients treated in the last 30 years,Aravind Eye Care System is the largest eye care provid...

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

Agri Export Policy - Towards smoother trade, wider global presence


+ More Publications >

IBEF Publication


'Monetise and Modernise' is the PM's mantra for govt. assets
IBEF, Knowledge Centre

In the FY2021-22 Union Budget, the Government of India announced an ambitious divestment target...

MoU between France and India to Boost the Local Renewable Energy Market
IBEF, Knowledge Centre

In March 2021, the Union Cabinet of India approved a memor...

Vehicle Scrappage Policy 2021: Expectations and Challenges
IBEF, Knowledge Centre

The vehicle scrappage policy is a government-funded programme ...

Revitalising 'India's Smart City Mission'
IBEF, Knowledge Centre

The ‘Smart City Mission' is a revolutionary proj...

India's handicraft crafts: A sector gaining momentum
IBEF, Knowledge Centre

The handloom and handicraft industry has been the backbone of ...

Healthy India's "Aatmanirbhar Swasth Bharat Yojana"
IBEF, Knowledge Centre

The government’s objective to strengthen the healthcare ...

ideas Ideas More


Zomato: Top Of The Food Chain
Zomato, an Indian start-up is in the business of online food ordering. It initially launched in Gurugram in 2008, a website that scanned menus and provided ratings and recommendations on....


Join now. Enjoy FREE subscriptions downloads, updates and more.


Already a member?
Login / Retrieve Password