The diagnostics sector in India is geared to witness phenomenal change. For decades, the industry was dominated by thousands of small, regional labs that were deeply, if not always accurately, trusted in their communities. But these labs were often of unequally limited reach and uneven standards. This landscape is shifting fast now, with pan-India diagnostic players taking prominent roles in the health care ecosystem. This change will soon make diagnostics the backbone of India’s health services market.
From fragmentation to formalisation
It was mainly small collection centres, family-run labs and clinics that used to offer diagnostic services in India. These smaller labs did forge solid links with local community, but were inconsistent in quality technology and sometimes the reliability of their results. Many of these labs used traditional methods, which made it difficult for patients in smaller cities or rural areas to access advanced diagnostic services.
The industry has evolved significantly over the last decade, with a number of factors such as regulation, capital and standardisation driving transformation in the industry. Accreditation agencies such as NABL and CAP, backed by growing consumer consciousness, have prompted labs to shift from standalone models towards more standardized network based ones.
The rise of diagnostic networks
National and super-regional chains are leading the way for the next phase of evolution in diagnostics in India. These diagnostics chains combine the strength of a local brand with the scale and quality assurance of larger organisations. By bringing in regional partners as well as strategic alliances, these chains facilitate the standardisation of the services offered in multiple geographies, making advanced diagnostics available in rural areas instead of just metro cities. This transformation provides the critical advantages of dependable and standardised reports, localised access to advance molecular and genomic testing, centralised quality control for more precise results, and rapid sample collection as well as reporting turnaround times.
The net effect of these developments is the greater reliability, greater scalability and improved customer service of diagnostics in India, and enhance the overall healthcare architecture of the country.
Industry scale and growth trajectory
The growth of the diagnostic industry in India is staggering. The Indian diagnostic laboratories market was valued at about Rs 1.54 trillion in FY 2024, and it is projected to almost double, reaching RS 2.98 trillion by FY 2030, with a compound annual growth rate (CAGR) of around 11.7 per cent between FY 2025 and FY 2030. These figures highlight the massive opportunity for growth in diagnostics, especially as smaller, regional labs come together to form more unified, national networks.
The role of technology and genomics
Moreover, technology has substantially increased the speed at which diagnostics will grow. Technological advancements such as cloud-based lab systems, AI-generated pathology reports and remote radiology are doing their bit in minimising the effect of location distance. Nowadays even a sample from a small town can be processed at a central lab and the results will be as accurate and as timely as that of a sample from a metro city. And genomics & precision diagnostics are starting to transform healthcare. With increasing population in India along with the increasing burden of non-communicable diseases, there will be a greater need for sophisticated diagnostic methods such as genetic testing and cancer screening.
Technology acceleration and AI impact at scale
Advancement of AI and digital technology is revolutionising the diagnostic field. One example is the AI powered chest Xray analysis with 5 million scans. Along with 98 per cent precision, 95 per cent recall across 75 diseases, and 99.9 per cent negative predictive value with Xrays, these AI systems also do transformative digital diagnostic work. Deployed across 17 major healthcare networks and processing around 2,000 X-rays per day, this system is helping improve diagnostic accuracy and speed, particularly in underserved areas.
This shows how diagnostic networks across India are not only growing in scale but also using technology to deliver high-quality care that is both consistent and precise.
Towards national giants
The pace of growth for Indian diagnostics has accelerated and they are well on their way to becoming national leaders in the sector. To support this ambition, players in the industry are pursuing three distinct growth strategies: first, mergers and acquisitions – in other words, larger national platforms are bringing on smaller regional labs, second, greenfield – this describes developing new collection facilities and labs in underdeveloped regions of India, and finally, global benchmarking – ensuring Indian diagnostic networks are utilising international quality standards and best practices. These tactics will ultimately continue to propel the development of this sector to national prominence.
This is indeed representative of the metamorphosis in the pharmaceutical industry in India, from a local manufacturer to global giants. In the same vein, diagnostics is on track to become a multi-billion-dollar industry, serving not only the local market, but also the global market for clinical trials and reference testing.
For diagnostics to truly make its leap, three enablers will be essential:
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Policy support: Reduce the number of GST slabs, promote the use of local diagnostic tools, and standardize licensing policies
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Investment in R&D: Encouraging local research and development on genomics, point-of-care devices, and AI.
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Trust and transparency: Fostering industry growth while providing high ethical, less biased, and more patient-centered communication
Balancing rapid growth with high standards will be the future of Indian diagnostics. If plans to leverage regional competencies on national networks comes to fruition, then for sure, the industry will continue to provide global top-class diagnostics services at affordable prices.