The striking feature of healthcare industry in India is its potential to grow at a much faster rate in the foreseeable future.  In this prevailing situation, Health Tourism has emerged as a separate industry with incredible potential. India is the most touted healthcare destination for countries like South-East Asia, Middle East, Africa, Mauritius, Tanzania, Bangladesh and Yemen with 12 percent patient inflow from developing countries. Health/Wellness tourism refers to trips that are taken by tourists with the principal purpose being to improve their health and/or wellbeing. What attracts medical tourists the most to India is its low cost treatment, compared to western standards, along with the diverse tourism opportunities. Here, tourists can enjoy the vivacious culture, amazing contradictions, diverse geography , the most unique attribute — unity in diversity and are able to receive an orientation that will help them improve their life in terms of health and general wellness. Government and private sector studies in India estimate that medical tourism could bring between $1 billion and $2 billion US into the country by 2012. The reports estimate that medical tourism in India is growing by 30 per cent a year.  Today, once again, promoting the healthful and health-care benefits of a destination is gaining popularity because tourism marketers need ways to differentiate their products. At the moment, Kerala Tourism is a global super brand and is regarded as one of the destinations with the highest brand recall. The tag line Kerala- God's Own Country was adopted in its tourism promotions and has become synonymous with the state. Kerala's equable climate, natural abundance of forests (with a wealth of herbs and medicinal plants) and the cool monsoon season (June - November) are best suited for curative and restorative packages. In order to cope with the growing demand for wellness, resorts, hospitals, medical practitioners and Government have taken ample measures to promote alternative health care in Kerala. This paper examines the various factors that contribute to Kerala’s strength as a preferred destination for Ayurveda based Wellness tourism. An attempt is made to study the Ayurvedic health care scenario by focusing on the strengths, weaknesses, opportunities and threats posed by the sector. It also examines the diverse challenges that need to be addressed by the medical tourism industry to realize its potential and suggests relevant guidelines for health tourism customers to choose this niche area and evolve successful.