India healthcare & pharma: Year in review and the road ahead 

The past year marked a period of sustained momentum for India’s healthcare and  pharmaceutical sector, supported by rising demand, resilient capital flows, and multi-year  policy-driven capacity building. 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.

Policy Direction: Signals from Sustained Public Focus 

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, emphasizing 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 Investments: Specialisation and Scale Emerging as Key Theme 

Healthcare continued to attract strong investor interest, drawing an estimated USD 4 billion in  investments over the past year. Investors increasingly prioritizing 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 specialized 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 specialization and scale will remain  defining themes for healthcare investments in the coming years.

Pharma: From Cost Advantage to Capability Depth 

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.

Emerging Therapies: Obesity and the Shift Toward Prevention 

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.

Digital Infrastructure and AI: From Foundation to Future 

India moved beyond basic digitization 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 utilization. Combined with ₹8,000 crore government  allocation for digital health and AI and expanding 5G coverage, these developments lay the  foundation for predictive, personalized, and integrated care.

2026 Outlook: Scale, Innovation, and Integration 

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 organizations, boosting medical tourism.