AI in Indian Healthcare Market Set to Reach $1.6 Bn by 2025

To maintain public trust, the report stresses the importance of ensuring data privacy, security, and ethical guidelines in AI deployments.

Artificial intelligence (AI) is rapidly transforming the Indian healthcare landscape, with the market expected to grow at a compound annual growth rate (CAGR) of 40.6% and reach $1.6 billion by 2025, according to a new report by Nasscom and Kantar.

India's overall healthcare sector has also been experiencing significant growth, expanding at a CAGR of 22.5% from 2016 to 2022. It is projected to reach $650 billion by 2025.

This growth is driven by diversification in products, services, and markets, making healthcare one of the most dynamic sectors in the country.

Transformative Potential of AI in Healthcare

AI technology promises to revolutionize India's healthcare system by enhancing diagnostics, streamlining operations, and improving patient care.

The report emphasizes that AI can provide predictive analytics for disease outbreaks and precision medicine tailored to genetic profiles, offering a new level of personalized care.

"AI holds transformative potential in healthcare, but to fully harness this, India must invest in AI infrastructure, skilled professionals, and adaptive regulatory frameworks," said Achyuta Ghosh, Senior Director and Head of Nasscom Insights.

AI Adoption Among Healthcare Providers

A recent Nasscom survey revealed that AI adoption in verticals such as pharma and life sciences is on the rise. About 82% of the surveyed organizations have adopted AI on a small scale and plan to expand its use in 2024.

Among healthcare providers, AI adoption is relatively high at 68%, although 92% of these deployments are still in the proof of concept (PoC) phase.

Large tech firms are increasingly adopting platform-based approaches and hybrid cloud solutions to create scalable and compliant healthcare applications.

However, the adoption of Generative AI in healthcare remains in its early stages, with only 34% of healthcare organizations in India piloting at least one or two Generative AI use cases in 2023.

To maintain public trust, the report stresses the importance of ensuring data privacy, security, and ethical guidelines in AI deployments.

"India can lead the way in healthcare innovation by embracing AI, ensuring the technology is used responsibly, and driving improvements in the quality of life for its population," added Ghosh.