India’s health insurance market expands on tax cuts and rising NRI demand  

The Gulf Cooperation Council countries remain the largest source of NRI demand, followed by Europe and North America, reflecting cost advantages and ease of access to Indian healthcare services

PRAVASISAMWAD.COM

India’s health insurance sector has begun 2026 on a strong footing, with premiums rising sharply following tax reforms and growing demand from non-resident Indians (NRIs). Changes to taxation, expanding government-backed schemes and digital sales channels are reshaping the market and drawing attention from insurers at home and abroad.

Health insurance premiums increased by 27.17 per cent year on year in January 2026, reaching ₹5,414.54 crore, according to data reported by brokerage firm Angel One. General insurance companies recorded health premiums of ₹2,187.98 crore, a rise of 20.4 per cent. Standalone health insurers performed even more strongly, growing 32.3 per cent to ₹3,226.56 crore and expanding their overall market share.

• A key driver behind this growth is the rationalisation of Goods and Services Tax (GST), effective from January 2026

• The tax on certain individual retail health policies was reduced from 18 per cent to 5 per cent. This has lowered overall policy costs and encouraged new customers to enter the market

Government-supported schemes continue to play an important role. Gross written premiums under public health initiatives rose 37.78 per cent year on year to ₹2,480 crore. Programmes such as Ayushman Bharat remain central to widening access to healthcare cover across the country.

At the same time, overseas demand is accelerating. A report by Policybazaar found that NRI purchases of Indian health insurance policies surged by 126 per cent compared to last year. Buyers are attracted by competitive pricing, improved digital access and favourable tax changes.