FDI in hospitals and diagnostics hits USD 1.56 billion in FY2025, Up 2.3x since FY2022: Rubix Data Sciences

New Delhi: India’s healthcare sector is at an inflection point, set to become one of the most attractive global destinations for healthcare investments, according to the latest Rubix Healthcare report. 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.

Investor interest in the sector has surged, with hospital M&A and private equity investments growing eightfold between 2022 and 2024. FDI in hospitals and diagnostics touched USD 1.56 billion in FY2025, 2.3 times higher than FY2022, with single-speciality hospitals now accounting for over 40% of PE deals. Expansion is also moving beyond metros—nearly 40% 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.

Public spending has risen steadily, with the budget for health and family welfare growing at a 9% CAGR between FY2022-FY2025. Government health expenditure has increased from 1.1% of GDP in FY2014 to 1.9% in FY2024, and its share of total health expenditure nearly doubled from 29% to 48% over the same period. This has helped reduce the financial burden on households, bringing out-of-pocket expenditure down from 62.6% in FY2015 to 39.4% in FY2022. The government’s recent removal of the 18% GST on health insurance is expected to further improve affordability and expand coverage.

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.

At the same time, challenges remain. Non-communicable diseases already account for over 60% of deaths in India, with diabetes cases projected to rise from 89.8 million today to 156.7 million by 2050. Despite a 112% 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.

Commenting on the findings, Mohan Ramaswamy, Co-founder and CEO, Rubix Data Sciences said, “India is on the cusp of a healthcare transformation. With strong policy support, global investor interest, and technology-led disruption, the country is fast emerging as the next frontier for healthcare investments. 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.”