By Manisha Dhulipala
India has for centuries been a much sought after tourist attraction given its rich heritage, diverse cultures, history, traditions, and many tourist locales. Expanding on this, Dr. Manmohan Singh, then Finance Minister, introduced pivotal economic reforms in the 1990s, which improved the country’s financial accessibility and affordability, leading to better opportunities for reputed healthcare professionals and established state of the art medical infrastructure. This changed India’s global image, making it a desirable Medical Tourism (MT) or Medical Value Travel (MVT) destination.
India primarily has two types of prominent healthcare systems—(i) private/corporate segment and (ii) government/public sector segment.
Due to the rapid growth of the private sector in the 1980s, the medical field opened its doors to the voluntary, private, and corporate healthcare sectors that gained momentum during the 1990s. Under the National Health Mission, the government too took cognisance of the shift in the market and introduced public private partnership (PPP) in healthcare.
According to an article published in the Medical Tourism magazine, 2014, an efficient and effective delivery MT is through PPP, between the various key stakeholders like government departments, business enterprises, private hospitals, diagnostic clinics, local pharmaceutical community, accrediting bodies, medical educational and research institutions, along with various international bodies.
India launches firms
To further boost the business and ensuring continued inflow of foreigners, the government launched many campaigns like the “Incredible India” campaign (2002), followed by “India: The Global Health Destination” and “Guests Are Like God” (2008) (in Sanskrit, Atithi Devo Bhava). These campaigns not only successfully attracted tourists from all over the world but also highlighted India’s cheaper air fares, excellent internet facilities, and communication channels.
Additionally, low-cost medical facilities compared to the Western or other developed nations further brought MT to the forefront. In November 2020, the Ministry of Tourism (MOT) also revised guidelines for the scheme of Market Development Assistance which was tailored towards incentivising the Medical Tourist Service Providers, primarily the private hospitals. MOHFW also provided loans to these establishments that largely benefited from financial aids in the form of working capital and also personal loans. This support fuelled the private sector to aggressively promote MT.
However, the government hospitals remained burdened fulfilling the demands of the larger domestic population, thereby, placing the entire load of MT on the private hospitals. According to a press release by MOHFW, from 2020 to 2023, the number of medical tourists in India rose from 1.83 lakhs to 5.04 lakhs. According to data released by credit rating agency Crisil, the number of medical tourists visiting India was projected to be around 73 lakhs in 2024. However, the government’s share of medical tourists is much lower compared to private hospitals, and that is also from those seeking basic procedures and the ones who cannot afford the high medical costs. Lack of quality of care, scarcity of skilled medical professionals, poor infrastructure, and long waiting time due to high demand are some of the many hurdles foreign tourists face while dealing with government healthcare facilities.
Medical tourism
This gap between the demand and supply allowed the private hospitals to elevate their services and strive to meet the demands of the medical tourists. However, according to a study, “Medical Tourism in India: Challenges and Way Forward Post the Pandemic” published in Indian Institute of Public Administration Digest (2021), some of the major challenges highlighted by the industry were (i) Brand India still being promoted for its typical tourist destinations but not as much for MT; (ii) strong competition from neighbouring countries along with cultural dissimilarities; (iii) lack of a Nodal agency as a single regulatory body with guidelines and policies that could monitor taxation anomalies, long-term investor friendly policies and issue of non-uniformity of medical expenses across hospitals; (iv) inadequate insurance cover with insurance frauds being rampant; and (v) difficulty and delay in obtaining Medical Visas by the patients.
In 2021, the “Draft National Strategy & Roadmap for Medical and Wellness Tourism” by MOT, proposed an institutional framework, strengthening the ecosystem for medical and wellness tourism, developing a brand and ensuring quality. The sole purpose of this strategic roadmap was to carve a way for the MVT to be formed as an organised sector that could bring about positive changes further strengthening it. The government’s commitment to make healthcare more affordable and accessible is further strengthened through continued support for initiatives like the Ayushman Bharat Digital Mission.
Adding to this, in 2023, the MOHFW announced loans of USD 14.8 billion to boost the infrastructure and personal loans to companies operating in the medical tourism industry, especially after the COVID-19 phase. This helped a few of the major hospital chains like Apollo, MAX, ASIAN, SHALBY, Fortis Hospitals, and the Manipal Group, which had already been at the forefront of MT, to focus on building state-of-the-art hospitals in tier-II and tier-III cities to cater to the local community along with the tourists.
Heal in India
Strengthening its “Heal in India” campaign launched in 2023, the current Union Budget 2025–26, particularly fits into a broader framework of promoting MT, boosting foreign exchange earnings. Out of the total budget, Rs. 99,858 crores is allocated to healthcare, with the focus being on customs duty exemptions on essential medicines, new cancer drugs day-care centres, healthcare coverage for gig workers under Ayushman Bharat Digital Mission, and promotion of MT along with the private sector. The current expectation from the industry is that the MVT sector will finally receive its due wherein emphasis would not only be on expanding and exploring the billion-dollar market to its full potential but also ensuring quality of services along with generating employment for many, thereby boosting the health economy of India. This brings into focus the position of the government healthcare system, which does not seem to have any specific mention within the budget, nor has any set guidelines. Hence, the success of MT hinges on the effective implementation of all that is promised in the current budget. It is now the need of the hour to establish a centralised regulatory body overseeing the healthcare system while addressing the private sector’s concerns and advancing the PPP initiative, thereby ensuring accountability and increasing accessibility for the masses.
Manisha Dhulipala is a Senior Research Fellow at CDPP. She holds a double masters in Environmental Sciences and Sustainable Development. Her areas of research interest include public health, education, and gender
