Why India’s Healthcare Sector Deserves a Place in Your Investments

India’s healthcare sector is in the midst of a structural transformation. Backed by rising demand, ambitious policy pushes, and technological innovation, it has grown into one of the country’s largest employers and a significant contributor to the economy. With growing investor interest and sustained capital inflows, the healthcare industry is fast becoming a key pillar of long-term portfolio construction.

To help investors participate in this growth, Windmill Capital has launched the Healthcare Tracker smallcase,  a model portfolio that captures India’s expanding healthcare landscape through a curated selection of stocks across hospitals, diagnostics, pharma, insurance, health-tech, and medical devices.

Here’s a closer look at what makes the sector a compelling investment theme.

A Market on the Move

India’s hospital market was valued at nearly ₹8.2 lakh crore in 2023 and is expected to almost double to ₹16.2 lakh crore by 2032, growing at a steady CAGR of 8%. Meanwhile, the broader healthcare market, which stood at ₹7.4 lakh crore in FY16, is projected to reach ₹53.3 lakh crore by FY25.

This growth has been driven by increased demand for accessible, affordable healthcare, especially in Tier 2 and Tier 3 cities, alongside rising medical inflation and lifestyle-related illnesses. The pandemic period also underscored the critical role of healthcare infrastructure, prompting both public and private investment in capacity expansion and digital health.

Employment and Innovation

With over 75 lakh people employed as of FY24, healthcare is now one of the country’s largest employment generators. The workforce is expected to expand rapidly, with 63 lakh new jobs likely to be added by 2030.

This includes a growing share of tech-led roles. From telemedicine to health analytics and AI-driven diagnostics, the industry is witnessing a strong convergence of medicine and technology. The telemedicine market alone is expected to touch ₹46,818 crore by FY25, while the broader e-health market is pegged to reach ₹91,902 crore.

A Sector Supported by Policy

The government continues to play a key role in building long-term capacity and resilience in healthcare delivery. In the Union Budget 2025-26, a total of ₹99,858 crore was allocated towards healthcare – a 9.8% increase over the previous year. In addition, the government has rolled out:

• A ₹50,000 crore credit incentive programme to strengthen healthcare infrastructure.
  
• An increased outlay of ₹9,406 crore for PMJAY, India’s flagship health insurance scheme.
  
• Nationwide telemedicine services under Tele MANAS which have already handled over 17.6 lakh mental health-related calls.
  
• More than 73 crore Ayushman Bharat Health Accounts (ABHA) and the registration of over 5 lakh health professionals have been registered as part of India’s expanding digital health ecosystem.
  

Capital Inflows and Global Recognition

Healthcare has become a key area for both domestic and foreign capital. In the first five months of FY24 alone, private equity and venture capital investments in the sector exceeded ₹83,383 crore, marking a 220% increase from the previous year.

The pharmaceuticals industry, too, is on a strong export trajectory, with outbound shipments projected to grow more than tenfold to ₹30.4 lakh crore by FY47. Between April 2000 and September 2024, India attracted over $23 billion in FDI into drugs and pharma, along with sizeable inflows into hospitals, diagnostics, and medical equipment.

India is also becoming a preferred destination for medical tourism, with the market expected to grow from ₹63,948 crore in 2024 to ₹ 1.2 lakh crore by 2029. In 2023, over 6.3 lakh foreign tourists visited India for treatment, making it a global centre for affordable and advanced medical care.

Demand Drivers: Domestic and Global

Several structural factors are fuelling long-term demand for healthcare services in India:

• Low doctor-to-patient ratio: Currently at 1:1,500, below WHO-recommended levels.
  
• Shortage of nurses: Only 1.7 nurses per 1,000 people, well under the global average.
  
• Ageing population: A rising share of elderly citizens is increasing the need for chronic care and geriatric services.
  
• Rising lifestyle diseases: Diabetes, cardiovascular issues, and mental health conditions are seeing a sharp uptick across age groups.
  
• Growing insurance penetration: Health insurance now accounts for a third of total premiums, reflecting higher preparedness and willingness to spend.
  

Introducing the Healthcare Tracker

The Healthcare Tracker smallcase is designed to give investors structured exposure to the growth of India’s healthcare ecosystem. It includes a mix of companies across:

• Hospitals and diagnostics: Beneficiaries of rising patient volumes and capital expenditure.
  
• Medical devices and equipment manufacturers: Tapping into the import substitution opportunity.
  
• Health-tech enablers: Leveraging data, teleconsultations, and AI to reshape care delivery.

The portfolio reflects Windmill Capital’s thematic approach, ensuring a disciplined and diversified exposure to this sector.

Final Word

India’s healthcare sector is entering a phase of accelerated transformation. With favourable demographics, supportive policies, and robust capital investment, the sector is positioned to play a central role in India’s economic future.

The Healthcare Tracker smallcase allows investors to participate in this growth through a ready-to-invest, research-backed portfolio that evolves with the sector.

As healthcare becomes not just a national priority but also a structural growth story, it deserves a strategic place in every long-term investor’s portfolio.

Disclaimer: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of a SEBI recognized supervisory body (if any) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

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