India has emerged as one of the world’s fastest growing economy in promoting medical tourism, India rank second for medical tourism in the world with the privatization, less waiting time and cost effective medical care, Indian health care sector is considered one of the largest in terms of revenue and skilled workforce. Indian ‘medical tourism’ industry is expected to reach $6 billion by 2018 and growing @30% annually. the driving force behind medical tourism is its cost effectiveness with world class treatment, medical care with traditional therapies like yoga, meditation, ayurveda, allopathy etc. Indian public andprivate medical centre are excel in all medical sources specifically in south Indian cities like Chennai, Kerala, Mumbai etc. The number of people arriving for medical care set to double over next four years. currently the size of medical tourism industry is a little over $ 3 billion, with tourist arrivals estimated at 230000, the present paper highlights reasons why the developing country like India attracts foreign tourists for the medical treatment and various opportunity and challenges faced by medical tourism industry in India.