Despite facing numerous obstacles along the way, the health sector in India has emerged as the fastest-expanding industry. Notably, it is aided by the much advancement in technology, more so by AI. This chapter reviewed the current context and scenario of AI in the Indian healthcare initiative, providing potential applications, the challenges confronting it, and recommendations for reducing these obstacles. Artificial Intelligence (AI) is the use of technologies that first enable machines to understand, interpret, and then perform healthcare duties. It finds applications in various situations, including diagnostics, hospitals, medical supplies and insurance, drugs, telemedicine etc. To effectively harness the power of AI on the path to achieving SDG-3—ensuring healthy lives and well-being for all—actions will also be taken in terms of access to valid and reliable data, efficacious technology for human–machine interaction, handling of ethical, legal, and social consequences of AI, building the workforce capacity for the use of AI, fulfilling the R&D demands of AI technology, and carefully testing AI technologies. It is within these challenges that AI can make immense contributions toward the achievement of SDG 3 in India.