Author: Dr. Haresh Adwani

Introduction

India has emerged as one of the leading destinations for international medical treatment due to its combination of highly skilled doctors, advanced hospital infrastructure and comparatively lower treatment costs.

Patients from regions such as the Middle East, Africa, South Asia and Central Asia increasingly travel to India for specialised treatments including oncology, cardiac surgery, orthopaedics and organ transplantation.

Recognising the economic potential of this sector, the Government of India has taken several policy initiatives to strengthen India’s position as a global healthcare destination. Key initiatives include the “Heal in India” programme, development of medical tourism infrastructure and improvements in visa facilitation for international patients.

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Government Policy Measures to Promote Medical Tourism

India’s position in global medical tourism is built on a genuinely compelling proposition: treatment costs that are 60 to 80 percent lower than OECD country rates, combined with internationally accredited hospitals and surgeons trained at global institutions. A cardiac bypass surgery that costs USD 100,000 in the United States can be performed at world-class Indian hospitals for as little as USD 5,000.

Patients from Bangladesh, the Middle East, Africa, Central Asia, and increasingly from developed markets such as the UK and Canada, are choosing India for oncology, cardiac surgery, orthopaedics, organ transplants, fertility treatments, and robotic surgeries. As of 2026, NABH has accredited over 1,299 Indian hospitals using more than 600 safety parameters, and several major hospital groups hold Joint Commission International (JCI) accreditation placing them among the most trusted medical institutions in the world.

• India’s medical tourism market: USD 12.32 billion in 2026, growing to USD 22.11 billion by 2031
• Foreign medical tourist arrivals: 644,387 in 2024 (Ministry of Tourism data)
• e-Medical Visa now available to nationals of 171 countries
• JCI and NABH accredited hospitals across major metro and tier-2 cities
• Union Budget 2026–27: Five regional medical tourism hubs proposed

The Heal in India initiative positions India not just as a destination for cost-driven medical care, but as a global brand for quality, safety, and comprehensive patient experience. However, for every international patient that steps into an Indian hospital, a chain of financial, regulatory, and compliance obligations is triggered that requires expert navigation.

(b) Development of Medical Tourism Hubs

Recent policy announcements have proposed the creation of regional medical tourism hubs through collaboration between government and private healthcare institutions.

These hubs are expected to integrate:

• Tertiary care hospitals
• Diagnostic centers
• Rehabilitation facilities
• Wellness and AYUSH centers
• International patient facilitation services

The objective is to create a structured ecosystem for international patients.

(c) Simplification of Medical Visa Regime

The Government has introduced Medical Visa (M-Visa) and Medical Attendant Visa (MX-Visa) categories to facilitate travel of international patients and their attendants.

Key features include:

• Expedited visa processing
• Multiple entry options for follow-up treatment
• Extension facility depending on treatment duration

These measures significantly improve international patient access to Indian healthcare institutions.

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FEMA Framework for Medical Tourism

Cross-border healthcare services involve foreign exchange transactions and therefore fall under the regulatory framework of the Foreign Exchange Management Act (FEMA), 1999. Relevant regulations are administered by the Reserve Bank of India (RBI).

(a) Treatment of Healthcare Services as Export of Services

When a foreign patient travels to India and receives treatment from an Indian hospital, the service is generally treated as export of healthcare services, provided payment is received in convertible foreign exchange.

Export of services is governed by:

• FEMA (Current Account Transactions) Rules
• RBI Master Directions on Export of Services

Hospitals receiving foreign exchange must route the transaction through Authorised Dealer (AD) banks.

(b) Permitted Modes of Payment

Hospitals may receive payments from international patients through:

• Foreign inward remittance through banking channels
• International credit or debit cards
• Payment through authorised forex intermediaries
• Advance remittances for scheduled medical procedures

Proper documentation must be maintained including:

• Patient identity records
• Treatment invoices
• Proof of foreign exchange receipt

(c) Foreign Currency Accounts

Hospitals dealing with international patients may maintain foreign currency accounts subject to FEMA regulations and approval of authorised banks for operational convenience.

These accounts help manage:

• International insurance payments
• Advance treatment deposits
• Refunds or adjustments for overseas patients

(d) Payments to International Medical Facilitators

Many hospitals engage international medical tourism facilitators or referral agents who assist foreign patients in accessing Indian healthcare services.

Payments to such facilitators involve:

• Outward remittances under FEMA
• Compliance with RBI regulations on foreign payments
• Documentation supporting the service agreement

Such transactions must be routed through authorised banks with appropriate purpose codes.

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GST Implications on Medical Tourism

Under the Goods and Services Tax framework, healthcare services provided by clinical establishments are generally exempt from GST.

Healthcare services include:

• Diagnosis
• Treatment
• Surgery
• Care for illness, injury or deformity

Therefore, treatment provided to foreign patients in India typically remains GST exempt, provided it qualifies as healthcare service under GST law.

However, certain services associated with medical tourism may attract GST, including:

• Accommodation arrangements
• Medical facilitation services
• Consultancy services by intermediaries

Hospitals must ensure proper classification of services to determine GST applicability.

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Economic Impact of Medical Tourism

Medical tourism contributes significantly to the Indian economy through:

• Foreign exchange inflows
• Employment generation in healthcare and allied sectors
• Expansion of hospital infrastructure
• Growth in hospitality, travel and logistics sectors

The sector is expected to experience significant growth as India continues to strengthen its healthcare ecosystem and global reputation for specialised treatment.

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Role of Compliance and Financial Advisory

As medical tourism expands, hospitals increasingly face complex regulatory requirements relating to:

• FEMA compliance
• Cross-border payment documentation
• Tax treatment of international services
• Contractual arrangements with global medical facilitators

Professional advisory services play an important role in ensuring that healthcare institutions comply with regulatory frameworks while efficiently managing international healthcare operations.

Conclusion

India’s healthcare sector is progressively integrating with the global medical ecosystem. Government initiatives, improved regulatory frameworks and internationally respected medical professionals position India strongly in the global medical tourism landscape. With continued policy support and compliance frameworks, Indian doctors and healthcare institutions are well placed to strengthen India’s reputation as a trusted destination for international medical treatment.

About the Author
Dr. Haresh Adwani
Ph.D. in Commerce | Law Graduate | Managing Partner, Adwani & Co LLP Dr. Haresh Adwani holds a Ph.D. in Commerce and is a qualified Law graduate with over two decades of hands-on experience in GST advisory, direct taxation, and statutory compliance for businesses across Pune and Maharashtra. As Managing Partner of Adwani & Co LLP Dr. Adwani has guided hundreds of SMEs, startups, and corporates through India’s evolving tax landscape. He is a recognised advisor on GST compliance, company formation, and Virtual CFO services, and regularly contributes to professional seminars and industry forums in Pune.

DISCLAIMER

This blog is intended for informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. Tax laws and provisions under the Income Tax Act, 1961, are subject to amendment; figures and deadlines mentioned are based on information available as of the date of publication. Readers are strongly advised to consult a qualified Chartered Accountant or tax professional before taking any action based on this content. Adwani and Company and Dr. Haresh Adwani shall not be held liable for any decisions made on the basis of information provided herein. Always refer to official sources at incometax.gov.in and cbdt.gov.in for the latest and authoritative information.

India lifted the Champions Trophy. Millions celebrated. But beyond the stadium roar, there is a lesson every CFO and business owner should carry back to their boardroom.

Cricket at the highest level is not won by talent alone. It is won by consistency, preparation, and an unwavering discipline to follow the process — even when no one is watching. Sound familiar? It should. Because that is exactly what GST compliance demands of your business.

At Adwani & Co LLP — a practice built on structured taxation and compliance discipline since 1977 — we have seen this truth play out across hundreds of businesses over five decades.

The Match was Won Before It Began

Champions do not rise to the occasion. They fall to the level of their preparation.

India’s victory was months in the making. Strategists studied opponents. Players trained their specific roles. The team built systems that could perform under pressure.

Your GST compliance works the same way. The business that sails through a GST audit did not get lucky — they prepared. They reconciled every month. They tracked every invoice. They built a system. The business that receives a GST notice and scrambles? They waited for match day to prepare.

Lesson 1: Consistency Over Brilliance

India did not win the Champions Trophy with one brilliant innings. They won it through consistent performance across every match.

The biggest myth in GST compliance is that one big year-end exercise is enough. It is not.

What actually protects your business:

• Reconciling GSTR-2B with your books every single month — not once a year
• Matching your outward supplies in GSTR-1 with your actual sales register monthly
• Ensuring vendor invoices are uploaded before you claim Input Tax Credit
• Filing GSTR-3B on time, every time — because late fees compound quickly

One missed month creates a cascading problem. Consistent compliance creates a clean audit trail.

Lesson 2: Know the Rules of the Game

Every Indian cricketer knows the Duckworth-Lewis-Stern method, the power play restrictions, and the no-ball rules. Ignorance of the rules in cricket — and in GST — is never a defence.

Here are the rules many business owners do not know until it is too late:

• Input Tax Credit on blocked categories (Section 17(5)) cannot be claimed — even if your vendor charges GST on food, personal vehicle use, or club memberships
• Reverse Charge Mechanism (RCM) applies when you purchase from unregistered vendors, use freight services, or subscribe to foreign SaaS platforms — you pay GST directly to the government
• E-invoicing is mandatory above certain turnover thresholds — failure to comply invalidates your ITC claims in the buyer’s hands
• Place of supply rules for services determine whether you pay IGST or CGST/SGST — getting this wrong triggers mismatches and notices

Knowledge of these rules is not optional. It is the foundation of every GST strategy we build for our clients.

Lesson 3: Your Team’s Roles Must Be Clear

India’s Champions Trophy squad succeeded because every player knew their role. Rohit Sharma’s job was different from Jasprit Bumrah’s. Both were essential.

In your finance and compliance function, role clarity is equally critical:

• Who is responsible for collecting vendor invoices before the 2B cut-off?
• Who reconciles GSTR-1 vs the sales ledger each month?
• Who reviews RCM applicability when a new vendor is onboarded?
• Who tracks upcoming GST amendments and circulars?

If the answer to any of the above is ‘I am not sure’, that is a gap in your compliance team’s fielding. And gaps get exploited — by the tax department, not a cricket opponent.

Lesson 4: Records Are Your Replay Technology

Modern cricket uses DRS — Decision Review System — where every delivery is recorded and can be reviewed in slow motion. Technology creates accountability.

In GST, your records are your DRS. The tax department can scrutinise your returns for up to three years from the due date of the annual return.

What must be maintained:

• All tax invoices, debit notes, and credit notes — both issued and received
• GSTR-1, GSTR-3B, and GSTR-2B for every return period
• E-way bills and e-invoices for all applicable transactions
• Reconciliation statements prepared at the time of filing — not reconstructed later
• HSN-wise sales summaries for GSTR-9 annual return

FY 2022-23 records must be maintained until at least December 2026. Most businesses do not realise this until they receive a notice asking for documentation from three years ago.

Lesson 5: Get Expert Coaching

No international cricket team competes without specialist coaches — batting coaches, bowling coaches, fielding coaches, and strategic analysts.

Yet many businesses with turnovers of ₹10 crore and above try to manage GST compliance through a general accountant or internal bookkeeper without specialist indirect tax oversight.

The cost of non-compliance is not just the penalty. It is the management time lost, the reputational risk of a GST audit, the disruption to vendor relationships when ITC mismatches are discovered, and the interest on late payments that accrues silently. Specialist advisory is not an expense. It is the fielding coach who prevents the boundary.

The Adwani & Co LLP Approach

Since 1977, we have built our practice on one belief: that compliance is not a burden — it is a competitive advantage.

Businesses that maintain clean GST records:

• Access working capital faster through timely ITC refunds
• Build credibility with lenders, investors, and large enterprise clients
• Avoid the disruption and cost of GST audits and scrutiny proceedings
• Are acquisition-ready and due-diligence ready at any point

Our Indirect Taxation practice, led by Prafullata Khandagale, delivers structured GST compliance, ITC optimisation, RCM advisory, and GSTR-9 filing support to businesses across sectors.

Your Next Step

India’s victory was celebrated for one evening. The preparation for the next tournament began the very next morning.

Your GST compliance works the same way. The best time to build a structured process was at the start of the financial year. The second best time is today.