Hospitals, health insurance, pharmaceuticals, diagnostics, medical devices, digital health, and medical tourism are collectively transforming the healthcare industry. Currently valued at around US$ 638 billion, the sector is growing at an annual rate of 19%, according to Rubix Industry Insights – Healthcare Services (September 2025).

The country has between 1.9 million and 2.2 million hospital beds, 1.388 million doctors, and 3.94 million nurses, according to the annual publication Health Dynamics of India (HDI) – Infrastructure & Human Resources.

But that will not be enough.

According to a report by Rubix Data Sciences, India’s hospital bed density remains inadequate, with only 1.4 beds per 1,000 people, as against the World Health Organisation’s (WHO) minimum benchmark of 2 beds per 1,000 population. To meet the WHO recommendation, India will require an additional 2.4 million hospital beds.

The country will also need around 160,000 more doctors and 650,000 additional nurses to achieve the target of 34.5 skilled health workers per 10,000 population by 2030 – another WHO threshold.

Gaps In Healthcare Infrastructure

With a growing population, a rising elderly demographic, and an increasing burden of lifestyle diseases, the country will require significantly more hospital beds, doctors, and nurses over the next decade.

India is also yet to achieve the National Health Policy target of raising public health expenditure to 2.5% of GDP.

The number of medical colleges in India has increased to 818, with more than 128,000 MBBS seats available annually. However, experts believe that this capacity remains insufficient to meet the healthcare demands of the coming decade.

Government spending on healthcare has also risen steadily.

Budget allocation for the Union Health Ministry increased from ₹74,602 crore in 2021-22 to ₹1.06 lakh crore in 2026-27. The largest expenditures are being directed toward the National Health Mission, AIIMS, Ayushman Bharat, medical colleges, and health research.

Yet, compared to global standards, India’s healthcare spending remains relatively low.

The Growth Areas

Healthcare is becoming a major driver of employment, investment, technology, insurance, and economic development.

The World Health Organisation’s 2024-25 assessment indicates that India has made substantial progress in combating communicable diseases.

According to the ASSOCHAM-Sathguru Management Consultants report, Revolutionising Indian Healthcare – Innovation-led Equitable Growth, the sector has recorded a growth rate of 22.5% over the past eight years.

ASSOCHAM Secretary General Deepak Sood has stated that technologies such as telemedicine, artificial intelligence, machine learning, and big data analytics are bringing historic improvements in both the quality and accessibility of healthcare services.

The digital health ecosystem is helping India move closer to universal health coverage.

Vijay K. Vijayaraghavan, Founder of Sathguru Management Consultants, notes in the report that India’s healthcare sector is at a historic stage of transformation and is increasingly becoming a preferred medical destination for patients worldwide.

The country’s medical tourism market is projected to reach US$ 16.21 billion by 2030, up from the current US$ 8.71 billion. But India continues to face a shortage of doctors, nurses, and hospital beds.

In addition, disparities in healthcare access between rural and urban regions remain a major challenge.

Only 3%–4% of GDP On Healthcare

Budget analyst Suresh Mehta points out that India continues to spend relatively little on healthcare compared to major economies.

According to the World Bank’s 2022 report, India spends only about 3%–4% of its GDP on healthcare. In comparison, healthcare expenditure accounts for 17%–18% of GDP in the US, 12.3% in Germany, 11.9% in France, 11.1% in the UK, and around 10% in Canada.

The Ministry of Health and Family Welfare’s National Health Accounts (NHA) indicate a significant rise – government health expenditure as a share of GDP increased from 1.15% in 2013-14 to 1.48% for 2022-23.

Similarly, the share of government health expenditure in total government spending rose from 3.78% in 2013-14 to 4.89% in 2022-23. Per capita government health expenditure increased from ₹1,042 in 2013-14 to ₹2,786 in 2022-23.

The Pradhan Mantri Jan Arogya Yojana (PM-JAY), launched in September 2018, has significantly expanded healthcare access by providing cashless treatment coverage of up to ₹5 lakh for poor and vulnerable families. More than 433 million Ayushman Cards have been issued under the scheme.

The critical question in the coming decade will be how to ensure affordable and quality healthcare for ordinary citizens while balancing growth and profitability.