India’s healthcare sector is evolving rapidly, driven by a significant digital transformation. In the past, seeking medical consultation during emergencies was often a challenging and time-consuming process. However, the adoption and advancement of technology have revolutionised the sector, making medical assistance more accessible and efficient. According to a Deloitte India report, AI adoption in healthcare has surpassed 40%, outpacing sectors like FMCG and manufacturing, which are at approximately 30% and 25%, respectively.
Let’s explore how the healthcare sector is embracing technology and what investors should keep an eye on.
Current State of Health Tech Industry in India
According to the Economic Survey 2023-24, India’s public healthcare expenditure rose to 1.9% of GDP in FY24, up from 1.6% in FY23. This increase in spending, along with technological advancements, has propelled the growth of the Indian healthcare market.
India’s health tech segment, which accounted for around 25% of healthcare innovation in FY23, more than doubled — from about US$ 3 billion in FY20 to around US$ 7 billion in FY23 — demonstrating its rapid evolution.
Moreover, health tech solutions in India are broadly divided into:
Consumer-facing solutions: This includes telemedicine, e-pharmacy, e-diagnostics, and wellness platforms.
Enterprise-facing solutions: These comprise B2B e-commerce, SaaS-based hospital management systems, and tools for clinic and pharmacy management.
The COVID-19 pandemic acted as a catalyst for digital transformation, accelerating the adoption of these technologies. However, despite these advancements, AI adoption in healthcare still lags behind sectors like banking and financial services.
Need for Health-tech in India
India currently has a doctor-to-patient ratio of 1:1,500 and only 1.7 nurses per 1,000 people — insufficient to meet the healthcare needs of its growing population. By 2030, the country is projected to have one doctor for every 800 patients. To meet the growing demand, India would need an additional 1.54 million doctors and 2.4 million nurses.
This acute shortage of medical professionals, combined with relatively low healthcare expenditure as a percentage of GDP, underlines the urgent need for technological intervention.
Additionally, the country faces a shortage of hospital beds. To achieve the target of 3 beds per 1,000 people by 2025, India requires approximately 3 million additional beds.
Government Initiatives in Healthcare Technology
MedTech Mitra Initiative: A platform to promote innovation in MedTech, leverage advanced technologies, and reduce import dependency — with a vision to transform India’s healthcare sector by 2047.
Digital Doctor Leadership Maturity Model (DDLMM): Introduced by the Health Parliament to help clinicians integrate technology and evaluate its impact on clinical processes and outcomes.
Mission SCALE: Aims to accelerate the growth of digital health start-ups by bringing together global leaders, start-up founders, and investors to drive healthcare innovation.
Tax Exemption: A 15-year income tax exemption for domestically manufactured medical technology products.
Ayushman Bharat Digital Mission: Seeks to create a unified digital health ecosystem by connecting healthcare providers and patients via unique health IDs. The mission aims to enhance infrastructure, surveillance, and research, strengthening both urban and rural healthcare and ensuring self-reliance during health crises.
eSanjeevani: This national telemedicine service promotes digital health equity and Universal Health Coverage (UHC). It facilitates quick access to doctors through smartphones and remote consultations via Ayushman Bharat Health & Wellness Centres.
What’s in it for Investors?
Unlisted players like Practo, Pharmeasy, Netmeds, Cult Fit, and Tata-backed 1mg are emerging as key leaders in the health-tech space. While start-ups are actively investing in AI, leading Indian hospitals — including Apollo, Fortis Healthcare, Narayana Health, Max Healthcare, Medanta, and Aster DM Healthcare — are also incorporating AI-powered tools to enhance medical services.
What’s Next?
India’s healthcare sector is undergoing a remarkable digital transformation. Not only has consumer acceptance risen post-COVID, but the surge of health-tech start-ups, combined with increased corporate interest, is reshaping patient care, diagnostics, and accessibility.
While challenges such as doctor shortages and infrastructure gaps persist, technology holds the potential to bridge these divides.
AI is projected to contribute US$ 25–30 billion to India’s GDP by 2025. Additionally, the telemedicine market is expected to reach US$ 5.4 billion in the same period, driven by growing demand for remote healthcare and continued tech advancements. With this momentum, an estimated 2.7–3.5 million new tech jobs are likely to be created.
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
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