AI in Indian Healthcare Market Projected to Reach $1.6 Billion by 2025

AI's integration into healthcare is seen as a critical driver for this growth, promising enhancements in diagnostics

Artificial intelligence (AI) is set to revolutionize India's healthcare sector, with the market projected to reach $1.6 billion by 2025, growing at an impressive compound annual growth rate (CAGR) of 40.6%, according to a report by Nasscom and Kantar.

The overall healthcare sector in India, expected to hit $650 billion by 2025, has been diversifying rapidly, driven by a CAGR of 22.5% between 2016 and 2022. AI's integration into healthcare is seen as a critical driver for this growth, promising enhancements in diagnostics, streamlined operations, and improved patient care across the country. The report highlights AI’s transformative potential, particularly in predictive analytics for disease outbreaks and precision medicine tailored to genetic profiles. Despite this promise, the report underscores the need for India to invest in AI infrastructure, skilled professionals, and adaptive regulatory frameworks to fully realize these benefits. Adoption rates vary across healthcare verticals. In the pharma and life sciences sectors, 82% of surveyed organizations have adopted AI on a small scale, with plans to scale up in 2024. Among healthcare providers, AI adoption stands at 68%, though 92% of these deployments remain in the proof of concept (PoC) phase.

Additionally, large tech firms are increasingly adopting platform-based approaches and hybrid cloud solutions to develop scalable and compliant AI healthcare applications. While interest in Generative AI is growing, its adoption in healthcare remains in its early stages, with 34% of organizations piloting GenAI use cases in 2023.