Rising health insurance penetration will support the growth of Indian hospital sector, according to a new survey report by Deloitte India.
The 47-page “India Hospital Survey: FY27 Outlook” released on 31 July 2026 reveals that 60% of hospital CXOs surveyed expect the sector to grow 10% to 15% per cent in 2026-2027.
The sector’s growth is expected to be supported by expanding insurance penetration, corporate health programmes and sustained investor interest. The sector is also supported by Government-backed initiatives such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, together with rising private health insurance penetration.
All these are improving healthcare affordability and access. This is reflected in the sharp reduction in out-of-pocket expenditure from 62.6% of total health expenditure in financial year 2015 to 39.4% in financial year 2022, signalling a more sustainable demand environment.
The positive outlook would, however, be tempered by a challenging operating environment characterised by healthcare cost inflation, persistent talent shortages, cybersecurity risks and increasing regulatory scrutiny. In addition, legacy systems and interoperability gaps limit the full realisation of digital transformation initiatives.
A significant trend revealed by the report points to the support from the tier 2 and tier 3 cities which account for 62% of new insurance policies, surpassing the metro region’s share.
Deloitte South Asia Partner and Leader, Life Sciences & Health Care Joydeep Ghosh said, “India's healthcare and life sciences story is entering a defining decade. Our hospital sector is projected to grow by 10% to 15% in FY27, backed by wider insurance coverage and a decisive shift towards AI-enabled specialised care."