India’s AI Healthcare Expansion Gains Momentum, but Clinical Use Remains Low

Summary:
India’s healthcare sector is increasingly adopting AI, supported by government initiatives, rising EMR usage, private investment and growing clinician acceptance. While EMR adoption has increased from 18% in 2018 to around 35%, smaller hospitals continue to lag behind, and AI in healthcare remains largely assistive rather than autonomous. With nearly 2,900 AI start-ups and significant investments in AI and data-centre infrastructure, Bain & Company said India’s next phase of growth will depend on applying its AI talent to domestic healthcare needs, while clearer regulatory frameworks for adaptive and autonomous AI systems are still required. 

India’s healthcare ecosystem is increasingly preparing for artificial intelligence (AI), supported by government programmes, growing electronic medical record (EMR) adoption, private investment and greater acceptance among clinicians.

A report by Bain & Company said the Ayushman Bharat Digital Mission (ABDM) is helping advance the use of AI in clinical settings by allowing patient health records to be stored and exchanged across healthcare providers and insurers.

The IndiaAI Mission, approved in 2024, has funding of around $1.25 billion to support India-focused datasets and AI models, including BharatGen and Bhashini.

EMR adoption across Indian hospitals has also increased significantly, rising from 18% in 2018 to approximately 35% currently.

However, the report noted that this expansion is largely taking place among major hospital chains in urban areas, while most small and mid-sized hospitals continue to rely on paper-based records.

India’s EMR adoption rate also remains considerably lower than that of the United States and the United Kingdom, where penetration exceeds 90%.

Private-sector funding continues to play an important role in supporting AI deployment at scale.

According to the report, Reliance, Amazon, Microsoft and Google have collectively pledged more than $175 billion toward AI and data centre infrastructure in India over the next seven to eight years.

During 2023-24, private equity investors committed around $1.4 billion to single-speciality healthcare providers alone.

While major technology companies have concentrated on building infrastructure and data capabilities, venture capital and private equity investors have invested $6.6 billion in AI applications over the past decade.

India has consequently become Asia-Pacific’s second-largest market by the number of AI start-ups, with nearly 2,900 such companies.

The country also has one of the world’s largest AI talent pools, with skill penetration estimated at around three times the global average. However, much of this talent is currently directed toward overseas markets.

Bain noted that India’s future AI growth could therefore depend on directing this expertise toward domestic priorities, including vernacular-language technologies and healthcare delivery.

The report said the most meaningful indicator of AI readiness is its impact on patients. By that measure, AI adoption in Indian healthcare remains primarily assistive.

At present, AI is mainly being used to help prepare and summarise documentation and assist clinicians, rather than functioning independently.

Bain also noted that the Central Drugs Standard Control Organisation (CDSCO), India’s national regulator for pharmaceuticals and medical devices, released draft guidance on medical-device software in October 2025. However, the framework has not yet provided clear guidance on adaptive and autonomous AI systems.