# India’s Economic Growth to Boost Health Expenditure by 2025

- Link: https://www.thailand-business-news.com/health/184172-indias-economic-growth-to-boost-health-expenditure-by-2025
- Published: 2025-01-01T10:09:00+07:00
- Author: Arun Upadhyaya

**India is projected to be the fastest growing large emerging market in 2025, with
health expenditure rising 8.6%, driven by economic growth, opportunities for providers,
and government initiatives enhancing healthcare access.**
**Key View**

 * India will be the fastest growing large emerging market (EM) in 2025, driving
   health expenditure growth.
 * This strong healthcare and economic growth outlook will present opportunities
   for healthcare providers in both public and private sectors to expand their services
   amid rising demand.
 * Despite India’s growth in health expenditure, spending remains low compared to
   other emerging markets, posing ongoing challenges due to underdeveloped infrastructure
   and workforce shortages.** **
 * India’s government will continue to prioritise expanding resources such as hospitals
   and clinics, while strategic partnerships will help to enhance quality and accessibility.

**India will be the fastest growing large emerging market (EM) in 2025, driving 
health expenditure growth. **Our Country Risk team forecasts that India’s real GDP
growth will expand by 6.6% in 2025,outpacing other large EMs including Mainland 
China. In line with its fast-growing economy, we expect health expenditure will 
record high single-digit growth of 8.6% in 2025, which is higher than most large
EMs. This growth trajectory will be maintained over the medium term, supported by
steady economic growth in the coming years. Only Mainland China and Turkiye—where
growth is distorted by a high inflationary environment—will see faster growth in
health spending over our forecast period. This strong macroeconomic environment 
is anticipated to drive investments in healthcare infrastructure and healthcare 
personnel development and support the expansion of health insurance coverage. India’s
expanding middle class with a growing demand for healthcare services will continue
to fuel demand for quality healthcare and medical products.

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**This strong healthcare and economic growth outlook will present opportunities 
for healthcare providers in both public and private sectors to expand their services
amid rising demand.** This will also present opportunities for medical device companies
to introduce innovative products, such as advanced diagnostics and minimally invasive
surgical devices. We anticipate that public spending will outpace private spending,
driven by government initiatives to enhance healthcare access and enhance the quality
of the public health system. However, due to India’s still underdeveloped public
healthcare infrastructure and the increasing demand for more specialised services,
the private sector will maintain its majority and continue to play a crucial role
in the provision of care. This highlights the important role that both the public
and private sector will continue to have in India’s healthcare system.

India’s economic expansion has set the stage for a significant increase in health
expenditure by 2025. Despite being one of the fastest-growing economies in the world,
India allocates a relatively low percentage of its GDP to healthcare, hovering around
3%. This underinvestment in health services poses challenges, particularly in a 
nation with a population exceeding 1.4 billion, where the demand for quality healthcare
continues to rise.

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As the economy expands, however, there is a growing recognition of the need for 
improved healthcare funding. Increased economic activity is expected to enhance 
government revenue, which can subsequently be channeled into health services. Policymakers
are beginning to prioritize healthcare as essential for sustainable economic development,
recognizing that a healthier population translates into a more productive workforce.

By 2025, strategic investments in healthcare infrastructure, insurance coverage,
and preventive services could significantly elevate health expenditure. Ultimately,
aligning healthcare spending with economic growth will ensure that India’s burgeoning
population receives the medical support it requires, fostering long-term well-being
and economic stability.
[Read More](https://www.fitchsolutions.com/bmi/healthcare/indias-economic-expansion-drive-2025-health-expenditure-which-remains-low-share-gdp-19-12-2024)