The Indian healthcare sector has emerged as one of the largest service sectors in India. Healthcare spending in India is expected to rise by 12% per annum. An estimate suggests that by 2012 healthcare spending could contribute 8% of GDP and employ around 9 million people. Rising incomes and growing literacy are likely to drive higher per capita expenditure on healthcare. The trend is shifting from infectious diseases to lifestyle diseases.

The medical equipment market is growing at a rapid pace; the market is expected to increase by US$ 1.7 billion by 2010 as against US$1.2 billion currently. The demand for hi-tech products is close to 80 percent of the overall market in India. The domestic market comprises of low-tech devices. Major international medical equipment giants are lining up their investments in India for setting up a local base.

Over the past few years medical tourism has gained momentum in India. An increase in the number of patients from developed countries getting quality health services for less than half the price is making India a popular medical tourist hub in Asia. In 2004, approximately 1,80,000 patients from around the world arrived in India for medical treatment. It is predicted that medical tourism will grow into a 2 billion US$ (dollar) business by 2012.

Over the last five years, the Indian pathology industry has been growing at an estimated compound annual growth rate of 20% per annum. Most of the renowned path labs are expanding globally and venturing into the international market by signing outsourcing contracts with European hospitals for pathological services. Outsourcing of pathology and laboratory tests by foreign hospital chains is becoming a huge opportunity because of the high cost differential in India. For eg: A thyroid profile blood test costs around US$ 30 - 50 in the US, the same can be analyzed by Indian companies for less than US$ 5 per patient.