AI has become a transformative force in the Indian healthcare sector, offering numerous opportunities for cost, quality, efficiency, and accessibility. The integration of AI in administrative and clinical healthcare functions, including natural language processing, chatbots, computer vision, and machine learning, is exemplified by IBM's Watson and innovative startups. The government's initiatives, such as the National Health Protection Scheme, demonstrate the government's commitment to leveraging AI to enhance healthcare quality, accessibility, and affordability. However, the transformative potential of AI in healthcare is accompanied by significant challenges, primarily revolving around data privacy and security. The paper examines legal aspects, examining regulations like the National Medical Commission Act and Telemedicine Practice Guidelines, and scrutinizes government policies regulating health data. It also discusses the implications of cyber-attacks on telemedicine and the importance of data security in AI-driven healthcare. The paper also explores AI's role in reducing fraud in healthcare schemes, such as Ayushman Bharat, by implementing machine learning and facial recognition software. Challenges in the widespread adoption of AI include ethical concerns, legal uncertainties, infrastructure limitations, and information asymmetries.

#