Tourism is the industry of future considering the lesser amount of investment needed and high returns expected and the potential that this sector has to generate foreign exchange. Medical tourism is becoming an increasingly popular option for patients looking to access procedures that are seemingly unavailable to them in their home countries due to high expenditure, lack of availability, and/or lengthy waiting lists. In its broadest concept, medical tourism refers to “travel with the express purpose of obtaining health services abroad” (Ramirez de Arellano, 2007). Punjab is a perfect choice for medical treatments for most of the NRI”s from different parts of the World. The state and Chandigarh carry an immense potential for medical tourism. World-class medical professionals, state-of-the art diagnostic and treatment facilities, both in the medical and surgical fields are available in cities like Amritsar, Ludhiana and Jalandhar. The present paper explores the scope and the challenges of medical tourism in Punjab and how the full potential of this sector can be realized for the prosperity of the state.