With its one billion inhabitants, its mega-cities, its English-speaking population, its expanding middle class and the explosion in its consumption, India has become an all-important market for European SMEs. Here are 12 particularly promising sectors.
Why now? All lights are on green according to experts on India. As pointed out by Business France in its country data sheet, growth forecasts for 2016 and 2017 should be close to 7.5% according to the IMF, which represents a substantial increase. This growth benefits all business sectors, especially that of services, which alone represents 52% of India’s GDP, ahead of industry (31% of GDP).
Another substantial advantage lies in the willingness shown by India’s current Prime Minister Narendra Modi, who came to power in 2014, to make India a global manufacturing hub by attracting maximum foreign capital. See the government’s “Make in India” campaign successfully launched in September 2014 and comprising 25 potential investment sectors. Added to that are the attractiveness of India’s workforce, its youthful population, middle classes (who will exceed 300 million people by 2025) and institutional stability.
See the video of Indian Prime Minister Narenda Modi presenting the “Make in India” week launched on 13 February 2016 in Mumbai (29 minutes).
12 growth sectors. European businesses are well positioned to play a key role in India given the diversity of its 29 States. Here are 12 growth sectors identified by French Trade Commission Business France, and by the UK Trade & Investment department:
- Telecommunications – With 833 million active mobile connections in 2014, India represents the world’s second biggest market in terms of volume.
- Energy – India’s renewable energies sector is booming. Its solar energy market has an annual growth rate of 5%, with a target 100 GW of solar installed in 2020 (versus 3 GW at present), according to Business France. UK Trade & Investment also refers to nuclear, oil and gas. See the “Make in India” video on opportunities in the field of renewable energies (30 seconds).
- Infrastructures – $103 billion in investments are expected for the 2012-2017 period in rail and urban transport, according to Business France. UK Trade & Investment also refers to the Indian government’s plans to develop 98 smart cities.
- Healthcare and pharmaceuticals – The Indian healthcare sector’s growth rate is estimated at 15% up until 2018. Meanwhile, the pharmaceuticals industry is set to enter the world’s top ten by 2020, which should represent $45 billion, according to Business France. UK Trade & Investment also refers to the biotechnologies sector, set to reach £60 billion in 2025.
- Automotive – India is currently the world’s 6th biggest vehicle manufacturer, and should climb to 3rd place on the global automotive market by 2020, behind China and the United States, according to Business France. See the Make in India video on opportunities in the automotive sector.
- Agri-food – Domestic demand for processed products is rising according to Business France.
- Electronics – The electronics sector represents India’s third biggest import item, where imported goods meet 66% of the demand for finished products, according to Business France.
- Aerospace – According to the UK Trade & Investment department, the aerospace sector is in full swing, both for civil and defence. In 2020, India is expected to become the world’s third biggest market for civil aerospace.
- Digital (excluding telecom) – In terms of digital flows, India is the world’s second biggest market, with 77 million smartphones sold in 2014, and 300 million Internet users, according to Business France.
- Innovative technologies – India represents the leading global marketplace in terms of R&D service outsourcing, and the world’s fourth biggest ecosystem for technology start-ups, according to Business France.
- Engineering – According to the UK Trade & Investment department, this sector offers a wealth of opportunities, notably in the field of industrial equipment, automation and environmental technologies.
- Education and learning – India’s needs in terms of education and learning are phenomenal, and at all levels (from primary to higher education). The UK Trade & Investment department indicates that British businesses benefit from a number of opportunities for developing education and e-learning programmes.
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