India is a land of opportunity and a land of mystery. While occupying a relatively smaller geographical area when compared to larger expanses of land such as Russia and Canada, India has one of the highest populations in the world. The most exciting part of India is its rising middle class with an average age as low as 28.8 years, which is expected to reach 38 by 2050. Its GDP per capita, at 3,375 USD, while low, is steadily increasing as globalization post COVID has taken on a new definition.
India is becoming more and more of a go to market for medical device manufacturers from the United States, United Kingdom, Europe (including countries like Germany, Italy, Spain, France, Sweden, et cetera), Australia, Japan, and many other markets. The exciting part of India is that growth is not just seen in its key metros, such as Mumbai, Delhi, Bangalore, Chennai, Hyderabad, and Kolkata; it is now being seen in Tier-2 towns and cities. For example, Lucknow, Nagpur, and Coimbatore are becoming major economic centers with increased wealth, and a large number of high-quality hospital chains such as Apollo Hospitals, Medanta, and Max Healthcare are coming up in these Tier-2 cities.
Indian healthcare sector size, 2016 to 2025
Compound growth across the period: 22.52% a year
2016110
2017160
2020280
2023372
2025638
Vertical: year. Horizontal: sector size in US$ billion.
Healthcare spending was 3.34% of GDP in 2023 and is expected
near 5% by 2030.
Device and hospital demand
The public sector, while in the past was investing less in healthcare versus defence infrastructure and other projects, has seen an increase in spending, especially since the time of Covid. One public scheme has already issued over 42 crore health cards while 500 million digital health IDs were reported to be in place by early 2026, implying first time patients still come in. As a result, there has been some massive growth in this segment to become $638 billion. In 2025 while just 10 years ago in 2016, it was $110 billion, which means the Indian healthcare ecosystem has seen a 6X growth. Another area causing growth for Indian healthcare is medical tourism. International patients from all over the world are coming to India for high quality treatment. Whether it is a patient from the Middle East for Care or from the UK or Canada due to long waiting lines or from the US simply because the cost of treatment is much more reasonable in the country. About 50% of inpatient spending is on lifestyle disease, making for a demand pull in cardiology, diagnostics, implants and monitoring.
GST at 5%
Most devices and many consumables, down from 12 to 18%.
32,544 hospitals
Empanelled under Ayushman Bharat, 17,037 public and 15,507 private.
US$ 8.71 billion
Medical value travel in 2025, toward US$ 16.21 billion by 2030 at 13.23% a year.
1.3 beds per 1,000
Against a global median nearer 2.9. About 14,500 beds expected from listed chains and two large unlisted players across FY2026 to FY2027.
RA PRO TIP
Focus on a different metric when evaluating the opportunity. From a value per person standpoint, the market is growing at a healthy 7% CAGR (compounded annually) and crossed US$ 1,714 in FY16 to about US$ 3,375 in FY26. Price your device for the year you are expecting to launch in, not the year you file in.
Insights on India's Medical Device Import Dependency
Historically, India has been highly dependent on foreign suppliers for medical equipment. More precisely, up to 80-90% of all medical devices in India were imported prior to the 2000s. Even as of today, most of the high end medical equipment and technologies are imported into India. Domestic manufacturers only produced low end and low tech medical devices, such as syringes, gloves, and dressings. Throughout the 2000s, the situation only slightly changed, as India continued to import most of its moderately and highly sophisticated medical devices.
As for today, although India managed to make significant progress in terms of local manufacturing, imports still comprise the majority of medical devices in India. Over the span of 5 years, domestic manufacturers increased their share by 20%, accounting for roughly 30% of the market. In terms of value, medical device imports in India reached a value of ₹68,885 crore in 2023-2024 for the 2023-2024 fiscal year. The majority of devices, which are highly sophisticated and require advanced research and development, are imported into India. Nevertheless, with the combination of “Make in India”, regulatory initiatives like Morulaa, and local manufacturing hubs, the trend is expected to slowly shift towards local high end manufacturing and the export of medical devices.
What is funding the growth?
Growing demand
US$ 13.84 bn
Health insurance premium, FY25, up from US$ 12.72 bn in FY24
Rising incomes, an ageing population and changing disease patterns are
shifting spend toward specialised care. Standalone health insurers held
41% of the non-life market by April to December FY25, up from 30% in FY20,
so more patients reach a hospital with cover in hand.
Research and development
194% rise
Cumulative increase in Department of Health Research funding, now
Rs. 4,821.21 crore (US$ 0.55 bn)
Low clinical research cost has made India a working R&D base for
international players, not only a sales territory. 20 AIIMS institutions
now run a national research consortium, and hospital IT innovation budgets
are expected to grow 20 to 25% over the next two to three years.
Mergers, acquisitions and private capital
US$ 3.5 bn
72 pharma, hospital and biotech deals in Q3 2025, a 166% increase
M&A made up 57% of deal value and private equity 59% of deal volume
in Q1 2025, so buyers are consolidating rather than sitting still.
Healthcare drew Rs. 4,435 crore (US$ 500 million) of PE and VC money in
Q3 2025, and Q2 FY26 saw over Rs. 10,000 crore of announced transactions
across hospitals, diagnostics and specialty care.
Foreign direct investment
US$ 41.83 bn
Cumulative healthcare-linked FDI, January 2000 to December 2025
100% FDI is allowed under the automatic route for greenfield projects,
and up to 100% under the government route for brownfield. Hospitals and
diagnostic centres took US$ 12.73 billion of that, and medical and
surgical appliances US$ 4.25 billion, so the money is landing in the
buyers you would sell to.
Data sources
India Brand Equity Foundation (IBEF), Healthcare, February 2026: sector size, hospital market, medical value travel, GST rates, Ayushman Bharat empanelment, bed density, insurance premium, research funding, deal activity and FDI inflows.
Growth of about 7% a year in GDP per person is calculated from the same report’s per capita series, FY16 to FY26.
Licence, classification and labelling practice reflects Morulaa’s India work and is detailed on the pages linked above.
Is India large enough to require a separate market entry plan?
The device market is set to grow from US$ 50 billion by FY31, and the hospital market is expected to move from US$135.3 Billion in FY2026 to US$202.5 Billion in 2030. The reason why it is a plan and not a pilot is that capacity is already being built as of FY2026 to FY2027, which will add 14500 hospital beds, against a backdrop of 1.3 beds per 1000 people. You would be buying into a construction boom, not a replacement cycle
Will not local manufacturing eat into imported devices?
Not in the near future, and not across all device classes. As of 2023-24, imports accounted for roughly 75% of devices, or Rs.68,885 Crore in value, with imaging and high end therapeutic equipment leading the fracas in foreign sourced devices. Domestically manufactured devices only account for 20-30% of the market, up from 10% five years ago, and in certain categories, it has penetrated up to 30-40%. So, mid level technology and consumables will feel the competitive pressures first, before high end devices. If you are in the latter category the window is still open but it is closing
Is India a price sensitive market?
Not necessarily but price is one factor among others. Medical tourism is worth US$8.71 Billion in 2025, with 7.3 Million medical visitors in CY24, with 10-12% of hospital revenues from these tourists, and the hospitals that cater to them buy to specification. Additionally, the GST cut for most devices to 5% from 12-18% reduces the landed cost without compromising the invoice value.
Is India’s demand concentrated in metros only or do smaller cities contribute as well?
It is no longer the former, and it certainly is the latter. With 26% of urban Indians in Tier II cities set to add 40 Million people by FY27, and the hospital bed capacity additions that will be announced shortly, with cities like Nagpur, Lucknow, Ongole, and Coimbatore featuring alongside the metros, your distributor master plan should not be limited to Mumbai, Delhi, and Bengaluru
Who buys devices in India is it private insurers or the government?
Both, and one should not be considered without the other. When it comes to private limited hospitals, they purchase on the basis of features and speed of service. Meanwhile, with 32,544 hospitals empaneled with Ayushman Bharat, of which 17,037 are public and 15,507 are private, and 420+ Million cards issued, reimbursement is becoming a critical consideration. There is also an entire segment of private insurance companies that are purchasing devices worth US$13.84 Billion in FY25. Pricing and distribution terms need to satisfy at least two of the three players.
