Indian hospitals to boost IT outlay by 20–25%, with AI and data care in focus: CII-EY report

New Delhi: IT innovation budgets in Indian hospitals are projected to rise by 20–25% over the next 2–3 years, with nearly half of healthcare providers already allocating 20–50% of their spends to digital innovation, according to the Confederation of Indian Industry (CII)-EY HealthTech Survey 2025.

Released at the CII Hospital Tech 2025 Summit, the report highlights automation in patient experience, clinical outcomes, and data-driven decision making as top priorities, while also flagging the challenges of legacy systems, workforce readiness, and patient-centric delivery that hospitals must overcome to become future-ready.

The survey finds that healthcare providers are directing digital investments toward long-term capability building, with six in ten hospitals planning to strengthen IT capabilities and half looking to expand BI tools and data lakes. Areas like hardware upgrades and application enhancements are lower priorities, while data management and cybersecurity remain important mid-level concerns. AI adoption is also gaining momentum, with hospitals focusing on clinical documentation, decision support systems, and imaging to improve data visibility, efficiency, and patient outcomes. This reflects a pragmatic shift from pilots to practical, scalable use cases, supported by national digital health initiatives such as ABDM and DPDPA.

Despite the momentum, barriers remain significant. Over 60% of providers identify capability building and IT team upskilling as their biggest challenge, while others point to integration difficulties, data management struggles, and resistance to change among stakeholders. Legacy systems, in particular, are seen as a major roadblock. At the same time, providers recognize the importance of building trust, with most reporting strong privacy and compliance frameworks supported by audits and international standards to ensure patient confidence and sustained adoption.

Speaking on the findings, Joy Chakraborthy, Chairman, CII HospiTech 2025, emphasized the need for collaboration between government, industry, and providers to unlock the full potential of HealthTech, while Ankur Dhandharia, Partner – Healthcare, EY Parthenon India, noted that hospitals are now moving from foundational systems toward patient-centric, data-driven, and outcome-focused smart hospitals. He highlighted that AI and analytics are no longer viewed as experiments but as transformative tools to drive efficiency, improve clinical decision-making, and create seamless patient journeys.

The report concludes that India’s healthcare system is at a pivotal point where hospitals must balance rapid digital adoption with privacy, compliance, and patient trust. By addressing capability gaps, embracing scalable AI applications, and aligning with government frameworks, hospitals can accelerate their transition into truly future-ready smart healthcare institutions.