Key View
- India will be the fastest growing large emerging market (EM) in 2025, driving health expenditure growth.
- This strong healthcare and economic growth outlook will present opportunities for healthcare providers in both public and private sectors to expand their services amid rising demand.
- Despite India’s growth in health expenditure, spending remains low compared to other emerging markets, posing ongoing challenges due to underdeveloped infrastructure and workforce shortages.
- India’s government will continue to prioritise expanding resources such as hospitals and clinics, while strategic partnerships will help to enhance quality and accessibility.
India will be the fastest growing large emerging market (EM) in 2025, driving health expenditure growth. Our Country Risk team forecasts that India’s real GDP growth will expand by 6.6% in 2025,outpacing other large EMs including Mainland China. In line with its fast-growing economy, we expect health expenditure will record high single-digit growth of 8.6% in 2025, which is higher than most large EMs. This growth trajectory will be maintained over the medium term, supported by steady economic growth in the coming years. Only Mainland China and Turkiye—where growth is distorted by a high inflationary environment—will see faster growth in health spending over our forecast period. This strong macroeconomic environment is anticipated to drive investments in healthcare infrastructure and healthcare personnel development and support the expansion of health insurance coverage. India’s expanding middle class with a growing demand for healthcare services will continue to fuel demand for quality healthcare and medical products.
This strong healthcare and economic growth outlook will present opportunities for healthcare providers in both public and private sectors to expand their services amid rising demand. This will also present opportunities for medical device companies to introduce innovative products, such as advanced diagnostics and minimally invasive surgical devices. We anticipate that public spending will outpace private spending, driven by government initiatives to enhance healthcare access and enhance the quality of the public health system. However, due to India’s still underdeveloped public healthcare infrastructure and the increasing demand for more specialised services, the private sector will maintain its majority and continue to play a crucial role in the provision of care. This highlights the important role that both the public and private sector will continue to have in India’s healthcare system.
India’s economic growth, projected to be robust over the next few years, is poised to drive an increase in health expenditure by 2025. As one of the world’s fastest-growing economies, India is experiencing rapid industrialization and urbanization, directly impacting economic dynamics. With the government aiming for a healthier population to sustain economic growth, there is a concerted effort to increase spending in health infrastructure, technology, and research. These investments are expected to improve healthcare access and quality.
Despite these efforts, health expenditure in India remains low as a share of GDP compared to global averages. Currently, healthcare funding is largely insufficient relative to the population’s needs, with a significant portion of expenses borne by individuals out-of-pocket. This presents a challenge for ensuring equitable access to healthcare across various socio-economic segments, particularly in rural and underserved areas.
To address this, India is strategizing to balance growth and inclusive health policies. By integrating health spending with innovative public-private partnerships, the government aims to enhance healthcare affordability and accessibility. While economic expansion holds promise for increased health sector funding, strategic planning and policy reforms will be crucial to ensure that the benefits of increased expenditure are equitably distributed, ultimately fostering a healthier, more productive workforce to sustain India’s growth trajectory.
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