Diagnosing Growth: The Next Phase of the IVD Market
27 Aug 2026
Diagnostics could be the fastest route to unlock latent demand in India's healthcare landscape. India conducts roughly 2 diagnostic tests per person annually, a gap that isn't simply unmet demand, but a signal that testing volumes can expand as diagnostic chains extend beyond metros and portfolios are built for decentralised, lower-infrastructure settings.
India's in-vitro diagnostics (IVD) market reflects this trajectory, growing from ~US$ 2B in FY24 to ~US$ 3.4B by FY29P at ~14% CAGR. This growth is fuelled by more than just broad-based expansion, the strategic prize concentrates with players who can pair reach into emerging geographies with the localisation and cost competitiveness that decentralises testing demands.
Exhibit 1: India's IVD market is large and rapidly growing
Shaping the next phase of IVD growth
The market is being shaped by four trends: expanding diagnostic access, manufacturing localization, export competitiveness and increasing private and capital-market activity.
Diagnostic chains and healthcare facilities are expanding beyond the largest cities, broadening access to diagnostics and expanding the addressable testing market across healthcare settings and testing volumes. As diagnostic demand reaches more geographies, distribution and service capabilities are also becoming increasingly important to effectively serve the market.
At the same time, greater manufacturing localization is improving the economics of the IVD ecosystem. Local production can create structural cost advantages, improve affordability of instruments and consumables, and enable more competitive pricing, while providing companies greater flexibility on pricing and margins.
India’s global relevance is also increasing, medical-device exports reached ~US$ 4.1B in FY25, growing at ~13% CAGR between FY21-25. Growing manufacturing capabilities and cost competitiveness could enable India to increasingly participate in global medical-device and diagnostics value chains, while expanding the addressable opportunity beyond the domestic market.
Finally, increasing private and capital-market activity is providing capital for capacity expansion, technology investment, M&A and portfolio expansion, potentially accelerating the scale-up of the ecosystem. As the market grows, M&A could also provide a route for companies looking to establish or deepen their presence in India, alongside opportunities to broaden portfolios and capabilities.
Exhibit 2: Four structural shifts are expanding the IVD opportunity and improving economics for Indian players
Source(s): Praxis analysis
Scale will favour focus, not just growth
IVD market is entering a phase where market expansion is increasingly being accompanied by changes in industry economics and competitive dynamics. Rising diagnostic penetration, expanding access beyond metros, greater localization, growing global relevance and increasing investment are creating multiple avenues for growth across the ecosystem.
For investors and IVD companies, the priority should be to align their growth strategies with these shifts, expanding reach into emerging geographies to capture incremental volumes, evaluating localization opportunities to improve cost competitiveness and margins, building capabilities to address global markets, and using M&A selectively to accelerate portfolio or geographic expansion.
The next phase could therefore favour businesses that can translate market growth into profitable scale by combining market reach, cost competitiveness, product capabilities and the ability to scale across geographies.