Written By: Resham Daswani

Understanding India’s Hospital Industry Landscape and plunging into the new year by starting your own hospital franchise. For all those entrepreneurs out there, here is a study of the Indian market, a guide to what’s making this a promising sector in the years to come and why invest in one right away!

India’s Hospital Industry Segment - Market Size, Landscape & Growth Opportunities For 2025

The healthcare industry in India has experienced phenomenal expansion and innovation in the past 20 years. The hospital business is really the backbone of this industry and has seen some amazing changes lately. This shift is largely due to growing health awareness, new technology, and supportive policies. 

With 2025 just around the corner, the hospital sector in India is opening up some amazing opportunities for investors, whether they're from here or abroad. Let me share why 2025 is shaping up to be an exciting year for investing in India's hospital industry.

Stats show here are some of the largest segments that are contributing to this industry’s revenue.

#1. The Hospital Segment

• About 55-60% of the total revenue comes from this contribution.
• In both public and private sectors, as well as in specialised clinics, hospitals provide essential inpatient and outpatient care. The hospital segment brings in the biggest chunk of revenue, thanks to the growing need for tertiary care, cutting-edge medical technology, and a variety of speciality services.
• Growth Drivers:
  • The number of people who are coping with chronic conditions continues to rise..
  • More people are getting insurance coverage.
  • The improvement and extension of medical facilities, particularly in secondary and tertiary urban areas

#2. Pharmacy Segment

• About twenty to twenty-five percent of the overall revenue is derived from this contribution.
• So, the pharmaceutical sector is all about making and distributing medicines, generics, and those important Active Pharmaceutical Ingredients, or APIs. With a volume contribution of more than 20%, India is by far the world's leading generic medication supplier.
• Factors that drive growth:
  • Growth in exports, mainly to markets in the United States and elsewhere in Europe
  • More people are looking for healthier options at home these days.
  • Advancements in biosimilars and biologics.

#3. Medical Equipment

• Contributes about 8 to 10 percent of the total revenue.
• So, this part covers things like diagnostic equipment, surgical tools, implants, and even wearable devices. India's medical equipment market is on the rise, thanks to more people embracing advanced technologies and supportive government policies, such as the PLI scheme.
• Growth Promoters:
  • There's been a noticeable increase in investments in healthcare infrastructure.
  • There's been a rise in diagnostic centres lately.
  • More and more people are noticing affordable devices made right here at home, and they're starting to catch on in the market.

#4. Pathology & Diagnostics Centres / Laboratories

• About 5–8% of overall revenue is contributed.
• So, the diagnostics sector is all about labs that provide pathology tests, procedures like MRIs and CT scans, and even preventive health checkups. This part is super important for catching diseases early, and it’s taken off since the pandemic.
• Factors that drive growth:
  • More people are increasingly mindful of their own health..
  • There's a growing interest in preventive diagnostics.
  • There's been a rise in organised players and laboratory chains lately.

#5. The Health Insurance Segment

• Contributes about 4 to 6 per cent of the total revenue.
• Health insurance is becoming a key player in the healthcare industry, making a notable impact. Increased awareness and government programs like Ayushman Bharat are contributing to the steady increase in insurance penetration.
• Factors that stimulate growth:
  • Healthcare costs are on the rise.
  • Growth of government-backed insurance programs
  • Making it easier for the middle class to afford things

#6. The Role of Digital Health and Telemedicine

• Contributing about 1-2% of total revenue, and it's on the rise!
• Electronic health records and telemedicine are changing the way people in less-populated areas, especially those in rural and semi-urban regions, may get the medical treatment they need. Even though this segment isn't bringing in much revenue right now, it's picking up speed and is set to become a big player in the years ahead.
• Growth Factors:
  • The government is pushing for digital initiatives.
  • Transition to remote monitoring and online consultations after the epidemic

In short, in India, hospitals and pharmaceuticals take the lead when it comes to healthcare revenue, making up more than 75% of the total earnings in the industry. Nonetheless, rapidly expanding sectors such as digital health, diagnostics, and medical devices are increasingly supporting the industry's growth. The future of India’s healthcare landscape is being reshaped by these segments, thanks to technological advancements and the growing demand for healthcare.

Top Players In The Multi-Specialist Healthcare Industry

1. Fortis Hospital
2. Manipal Hospital
3. Max Healthcare
4. Narayana Healthcare Hospital
5. Aster Healthcare
6. Shalby Hospital

India's Leading Hospitals and Clinics Specialising in Speciality Care

1. Dr Agarwal’s Eye Clinic Hospital
2. Vasan Eye Care Hospital
3. Tata Memorial Cancer Hospital
4. Rainbow Hospitals
5. Motherhood Hospital
6. Hosmat Hospital
7. Sparsh Hospital

Also read: top franchise opportunities in Speciality clinics in 2025

Key Drivers Enhancing The Growth Of Healthcare and Hospital Business in India

India's hospital sector is expanding significantly due to a confluence of economic, political, and technological forces, as well as changes in the country's population. Some of the most important current trends that are helping to propel India's healthcare sector forward are as follows:

1. A Growing Number of Diseases: Diabetes, high blood pressure, and heart problems are on the rise in India, and they are all considered non-communicable illness (NCDs). Demand for specialised and multispecialty hospitals will rise
2. Health Insurance Coverage Growth: Quality healthcare is more affordable and accessible due to health insurance uptake. Also, Over 500 million impoverished people are covered by Ayushman Bharat, increasing hospital visits and treatments.
3. Rise of Medical Tourism: India is a top medical tourism destination due to reasonable costs (30-50% lower expenses than Western countries). Excellent healthcare infrastructure. Experts in orthopaedics, cardiology, and cancer. Therefore, the $9 billion medical tourism market in 2023 is expected to increase fast, helping metro hospitals and speciality centres.
4. Technological Advances:
   1. Telemedicine: Improves patient volumes by reaching remote and underserved locations.
   2. Artificial Intelligence and Robotics in Surgery: Advanced care patients are interested in precision technology.
   3. Hospitals can cut readmissions and manage chronic illness patients with IoT and remote monitoring.
   4. Optimise operations and patient outcomes with EHRs.
5. Transition to Wellness and Prevention: Regular health checks and diagnoses have increased due to preventative care knowledge. The prevalence of comprehensive hospitals and clinics that provide alternative treatments and yoga is increasing..
6. Rise in PPPs: Central and state governments are working with private companies to improve healthcare in neglected areas. PPP approaches are enabling improved hospital construction while maximising private sector efficiency.

Therefore, these factors make the healthcare industry one of India's most dynamic and fast-growing.  Moreover, these developments can help investors and stakeholders capitalize on India's healthcare business.

Key Initiatives Taken By Government Of India To Promote The Healthcare Industry Business

Many government programs have promoted healthcare and medical tourism in India. These policies aim to make healthcare more affordable, accessible, and high-quality and make India a medical tourism hotspot. 

Key initiatives are below:

#1. PMJAY - Ayushman Bharat Scheme

• The 2018 flagship policy offers yearly health coverage of up to ₹5 lakh per family for secondary and tertiary care hospitalisation.
• Over 50 crore people, mostly poor, are covered.
• Helps private hospitals grow to serve insured patients, increasing revenue and infrastructure.

#2. The 2020 The objective of NDHM is to digitise healthcare through the development of:

• Special Health Identification Cards for People
• A unified digital infrastructure for healthcare services, is known as electronic health records (EHRs).
• Streamlines patient-doctor interactions lowers expenses, and improves healthcare.

#3. PLI For Medical Equipment

• Encourages imaging, ventilator, and implant manufacturing.
• Reduces imports and promotes affordable healthcare technologies.
• Promotes competitively priced sophisticated hospital equipment.

#4. FDI For Healthcare

• Allows 100% automatic FDI in hospitals, health services, and medical devices.
• Encourages foreign investment in India's healthcare infrastructure and technologies.

The primary initiative to encourage medical tourism in India:

#1. E-Tourist and Medical Visas

• Patients and two attendants can get a simplified government e-Medical Visa.
• Helps medical tourists from 165 countries access Indian healthcare.
• Easy visa processing and speedier approvals.

#2. Campaign Called Heal In India

• This campaign advertises India as a medical tourism destination as part of "Brand India".
• India offers affordable, high-quality, and innovative healthcare.
• Cardiology, orthopaedics, organ transplants, and alternative medicine (Ayurveda, Yoga, Siddha) are emphasised.

#3. Development of Infrastructure for Medical Tourism

• Urban areas such as Bengaluru, Delhi, Mumbai, and Chennai will see the construction of cutting-edge healthcare facilities.
• The provision of therapy and patient care meets worldwide standards when hospitals are accredited internationally (e.g., by NABH, JCI).

#4. Facilitating Medical Tourism Desk

• At airports and major healthcare centres, they help international patients with:
• Interpreting language
• Transportation Hospital bookings and referrals

#5. Medical Tourism Export Incentives

• Hospitals serving overseas patients receive GST discounts on some services.
• Healthcare export-oriented units (EOUs) are tax-exempt.

#6. Collaborating with Global Platforms

• Promotes bilateral patient exchange agreements with international governments and organisations.
• Enhances India's worldwide healthcare credibility.

To Conclude,

The Indian hospital industry is poised for growth and innovation in 2025. Potential investors can find a wealth of opportunities in the healthcare sector, thanks to factors such as increasing demand, favourable policies, technology improvements, and the surge in medical tourism. 

Private equity, venture capital, and institutional investors should explore India's healthcare industry's tremendous potential immediately. With the appropriate technique, you may earn big returns and help the nation get healthier.

Connect with FranchiseBAZAR for latest healthcare franchise opportunities, top hospital franchises in India and other medical franchise opportunities to look out for.

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog