Expanding healthcare infrastructure to meet future demand

Expanding healthcare infrastructure to meet future demand

Introduction: The scale of India’s healthcare opportunity

India’s healthcare system is entering a decade of unprecedented demand growth, driven by population expansion, rising incomes, and a growing burden of chronic diseases. Meeting this demand will require not just incremental improvements, but a step-change in infrastructure capacity and investment.

At the same time, ensuring that this expansion is equitable across geographies, and not limited to metropolitan regions, will be critical to building a truly national healthcare system.

Current scenario: Persistent gaps and uneven distribution

India continues to face structural gaps in healthcare infrastructure relative to global benchmarks. Hospital bed availability remains around 1.6 beds per 1,000 population, while physician density is close to 0.7 doctors per 1,000, compared with 2–4 per 1,000 in advanced economies. Significant shortages also persist in nursing capacity and advanced medical infrastructure such as MRI, CT, LINACs, and CATH labs.

Exhibit 1: Comparison of healthcare infrastructure capacity and required scale-up in beds, workforce, and medical equipment

Beyond these shortages, the distribution of healthcare infrastructure remains highly skewed on a per capita basis. While over 70% of India’s population resides in Tier 2, Tier 3, and rural areas, the availability of hospitals, equipment, and specialist care per 10,000 population remains significantly higher in Tier 1 cities. Although a larger absolute number of facilities exist outside Tier 1 due to population distribution, per capita availability remains disproportionately concentrated in urban centers, highlighting a structural imbalance in access. This results in overburdened tertiary hospitals, long travel distances for patients, delays in treatment, and higher out-of-pocket expenditure. As insurance coverage expands and healthcare demand rises, these gaps in per capita capacity are likely to place increasing pressure on already stretched urban healthcare systems.

Exhibit 2: Distribution of healthcare infrastructure resources across regions in India 

Bridging the gap with international benchmarks will require a substantial expansion in healthcare capacity. India is expected to require ~3 million hospital beds by 2035, including ~1.5 million additional private beds, implying an estimated ~US$200–225 billion investment requirement.

Exhibit 3: Comparison of healthcare infrastructure capacity and required scale-up in beds, workforce, and medical equipment

However, available capital remains limited. The financial capacity of hospital providers is constrained, private investments remain modest relative to the need, and high return expectations further restrict expansion. This creates a structural gap between capital availability and infrastructure demand, slowing the pace of capacity creation, particularly in non-metro markets.

The road ahead: Scaling capacity with a focus on equity

Addressing India’s infrastructure challenge will require unlocking large-scale, long-term capital while ensuring that investments are directed toward areas of highest need.

Strengthening financing mechanisms will be critical. Expanding access to long-tenure infrastructure financing, blended finance models, and credit enhancement mechanisms can reduce the cost of capital and attract institutional investors into the sector. Policy measures such as priority sector lending, infrastructure status for healthcare, and viability gap funding can further improve investment viability, particularly in underserved regions.

India’s healthcare future will be shaped not just by how much infrastructure is built, but where and how it is deployed. Bridging gaps in capacity and correcting regional imbalances will be essential to ensuring that growth in healthcare access is both inclusive and sustainable.

To explore these insights in greater detail, click here to download the full report.