The integration of Augmented Reality (AR) in healthcare systems has revolutionized medical practice globally, offering enhanced precision, efficiency, and patient care. In India, AR is emerging as a transformative tool, particularly in the areas of diagnostics, surgical procedures, medical education, and patient management. This paper explores the impact of AR on the digital healthcare landscape in India, analyzing its potential to improve healthcare accessibility, reduce errors in medical procedures, and streamline medical training. The review highlights the benefits of AR in telemedicine, surgical navigation, and remote diagnostics, addressing key challenges such as infrastructural limitations, high implementation costs, and regulatory hurdles that hinder its widespread adoption in the country. Furthermore, the role of AR in bridging the healthcare divide between urban and rural areas is discussed, along with the opportunities it presents for startups and public healthcare institutions. While AR offers immense promise for India’s healthcare future, the need for stronger policy frameworks, better funding, and greater technological awareness is crucial to unlocking its full potential.