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India’s pharmaceutical exports remained front-loaded at $28– 30 billion annually, while the domestic pharma market continued to grow in high single digits, led by rising prevalence of diseases and lifestyle therapies. Government support for Make in India under the broader vision of Atmanirbhar Bharat also reinforced these changes.
As per Grant Thornton Bharat’s deal tracker, across healthcare and pharma, the sector attracted an estimated USD 10 billion in private equity, IPOs, venture, and strategic investments over the past 12 months, signaling long-term confidence in demand fundamentals. Global tariff actions and supply-chain disruptions sharpened the focus on domestic manufacturing, particularly APIs and CDMO capabilities, with continued emphasis on prevention and chronic disease management.
Over the past few years, policy focus has shifted toward a long-term ecosystem-building approach. Public health expenditure has steadily increased to around 2% of GDP, with a stated medium-term target of 2.5%, and out-of-pocket expenditure (OOPE) declining to about 39%. Recent Union Budgets have reinforced priorities around Accessibility, Availability, and Affordability, emphasising preventive care, technology-led delivery, early disease screening, cancer care capacity, digital public health infrastructure, and domestic manufacturing.
The expansion of digital health initiatives and the introduction of stronger data protection norms reflect an effort to enable trusted digital scale, while PLI allocations exceeding ₹15,000 crore for pharmaceuticals underline a clear push toward supply-chain resilience and export competitiveness. Collectively, these measures signal a stable and investment-supportive policy environment aimed at scale, resilience, and global integration.
Healthcare continued to attract strong investor interest, drawing an estimated USD 4 billion in investments over the past year. Investors increasingly prioritising single-specialty platforms driven by scalable models and asset-light expansion strategies. Importantly, expansion is now moving beyond large metropolitan clusters into Tier-II and Tier-III cities, reflecting a broader push for accessibility and affordability. This geographic diversification is creating new opportunities for specialised care delivery and diagnostics in underserved markets.
At the same time, multi-specialty hospital chains pursued consolidation and brownfield expansion to improve operating leverage and meet rising demand in urban clusters. Investor confidence remains strong, supported by demand growth, expanding insurance coverage, and improving affordability. These dynamics suggest that specialisation and scale will remain defining themes for healthcare investments in the coming years.
India’s pharmaceutical industry continued its shift from a cost-led model to a capability-driven one, strengthening its role in global supply chains. The pharma and biotech segment attracted approximately $4.8 billion investments over the past year, largely directed toward expanding domestic CDMO and API manufacturing, supported by PLI incentives and private capital. The segment is growing at an estimated 10–12% annually, benefiting from rising outsourcing by global pharma companies.
From a services perspective, India now hosts ~100 pharma-focused GCCs, accounting for nearly 40% of global pharma GCC workforce, spanning regulatory, quality, clinical, analytics, and digital functions. These GCCs are supporting innovation, research & development, AI, and technology initiatives for global pharma companies. Together, these developments reflect a strategic shift from cost-based outsourcing to global innovation and enablement, supported by India’s talent depth, digital infrastructure, and policy-led manufacturing support.
Chronic therapies remained the primary growth driver for Indian pharma, reflecting India’s rising non-communicable disease burden. With over 100 million people living with diabetes and a rapidly expanding obese population, the launch and discussion around GLP-1–based obesity therapies marked a notable shift in the year’s narrative, and 2025 saw major launches.
While near-term penetration remains limited due to pricing and access considerations, these therapies have prompted Indian companies to evaluate biosimilars, partnerships, and manufacturing opportunities. More broadly, this signals an industry pivot toward prevention focused and higher-value therapies, aligning with global trends in lifestyle disease management.
India moved beyond basic digitisation toward connected ecosystems. Under the Ayushman Bharat Digital Mission (ABDM), as of August 2025, India recorded ~80 crore health IDs, 67 crore linked health records, and 4.19 lakh facilities on national registries. Hospitals upgraded EMRs and HIS to enable data portability and continuity of care, while AI adoption shifted from pilots to practical deployments in radiology, diagnostics support, and clinical documentation, improving turnaround times and resource utilisation. Combined with ₹8,000 crore government allocation for digital health and AI and expanding 5G coverage, these developments lay the foundation for predictive, personalised, and integrated care.
India’s healthcare and pharma sector enters the next phase with three defining themes: scale, innovation, and integration. Expect continued momentum in domestic manufacturing and PLI led capacity building, deeper penetration of digital health platforms under ABDM, and AI-driven decision support moving from niche use cases to mainstream workflows. Chronic and lifestyle therapies will remain growth anchors, but emerging categories like obesity drugs and biologics will shape the innovation narrative.
On the delivery side, specialty care platforms and hospital consolidation will accelerate, supported by rising insurance coverage and affordability. With public health spending targeting 2.5% of GDP, and private capital flows staying stable, the outlook points to a sector evolving from incremental growth to technology-led, globally integrated healthcare ecosystems. Enactment of DPDPA will further strengthen the focus on data privacy, and the right adoption can not only address patient privacy concerns but also give competitive advantage to healthcare organisations, boosting medical tourism.
This article first appeared in Express Healthcare on 10 December 2025.
