Key Points

The report added that India's healthcare sector is at an inflection point and is set to become one of the most attractive global destinations for healthcare investments.

Supported by government reforms, rising private equity participation, and the rapid adoption of digital health, the sector is poised for exponential growth, particularly in non-metro cities, the report further added.

Investor interest in the sector has surged, with hospital M&A and private equity investments growing eightfold between 2022 and 2024.

The report noted that the single-speciality hospitals now account for over 40 per cent of private equity (PE) deals. Expansion is also moving beyond metros--nearly 40 per cent of the 34,000 new hospital beds planned by FY2029 are expected in Tier-II and Tier-III cities such as Lucknow, Jaipur, Guwahati, and Cochin.

Commenting on the findings, Mohan Ramaswamy, Co-founder and CEO, Rubix Data Sciences said, "The rise of Tier-II and Tier-III cities, coupled with India's positioning as a global hub for affordable world-class medical care, makes this one of the most exciting phases in the industry's evolution."

Public spending has risen steadily, with the budget for health and family welfare growing at a 9 per cent CAGR between FY2022-FY2025. Government health expenditure has increased from 1.1 per cent of GDP in FY2014 to 1.9 per cent in FY2024, and its share of total health expenditure nearly doubled from 29 per cent to 48 per cent over the same period. This has helped reduce the financial burden on households, bringing out-of-pocket expenditure down from 62.6 per cent in FY2015 to 39.4 per cent in FY2022, the report added.

The government's recent removal of the 18 per cent GST on health insurance is expected to further improve affordability and expand coverage, the report added.

Medical tourism and digital health are becoming powerful growth engines. The medical tourism industry, valued at USD 7.7 billion in 2024, is projected to double to USD 16 billion by 2030, attracting millions of international patients each year. Meanwhile, India's digital health market--spanning AI, telemedicine, and e-pharmacies is expected to grow more than fivefold, from USD 8.8 billion in 2024 to USD 47.8 billion by 2033, supported by flagship initiatives such as the Ayushman Bharat Digital Mission and e-Sanjeevani.

On challenges, the report noted that non-communicable diseases account for over 60 per cent of deaths in India, with diabetes cases projected to rise from 89.8 million today to 156.7 million by 2050. Despite a 112 per cent increase in MBBS seats since 2015, India still faces a shortage of 0.65 million nurses and 0.16 million doctors by 2030, underscoring the need for continued investment in medical education and training, the report highlighted.

- ANI