Over the last decade, knowledge has been increasingly viewed as an invaluable organisational resource. With the advent of globalisation there has been an explosion of information and the success of an organisation is more or less dependent on the extent to which it is able to utilise this massive amount of information. Organisations are facing a crisis dealing with this vast ocean of information management and utilisation. This is where knowledge management (KM) has emerged as the key to solve this predicament. In this paper we present the potential and benefits of KM in healthcare. This paper is substantiated by a detailed review of the concepts of KM in general and relevant to healthcare, and addresses the potential benefits of its implementation. The paper is based on the collections of systematically reviewed literature and is a theoretical approach to understanding the role of KM in healthcare in the Indian context. There are less number of studies in India, about KM for PHC's or secondary/ tertiary healthcare domains in India. This descriptive attempt can help future researchers to gain in-depth insights and practical implications along with advantages of a proper KM in the Indian healthcare community. Copyright © 2014 Inderscience Enterprises Ltd.