The Nature of Indian Economy and Investment Opportunities in India
“It is really gratifying, for example, to visit India now and see that because they’ve had good educational institutions, and they’ve had a focus on it, there are more and more people in India participating in the world economy.” — Bill Gates
India, one of the fastest growing economies in the world, is expected to be one of the top three global economic powers over the next 10-15 years. According to the Hurun Global Unicorn List, India has become the fourth-largest country in the world with over 21 unicorns valued at US$ 73.2 billion. Moreover, with more than 7,000 public listed companies, India has become one of the deepest equity markets among emerging markets in the world. With a population of around 1.4 billion people, India keeps creating opportunities for growth and investment in all the sectors of the economy. There are a plethora of industry-based investment opportunities in India. In this article, let’s find out them in detail.
IT sector is the one which keeps growing at a rapid pace in India. And also it is the only sector that meets or even exceeds the expectations of the industry experts since the number of India’s internet and Smartphone users is continually increasing. India’s IT industry has evolved from the 2000s and entered into system integration, maintenance and remote infrastructure management of software development. Since then, Indian IT companies have achieved several striking factors both in private and government sectors, and have created a great impact even in the global IT space.
These takeaways indicate why India’s IT sectors show great investment opportunities.
- Availability of Special Economic Zones
- By 2022, IT is sector expected to touch $1 tn digital economy.
- By 2025, IT-BPM industry is expected to reach $350 bn.
- Favourable government policies
- India is full of IT-skilled employees.
- Tax advantages and less salary ratios
- Updating with new IT technologies – AI, cloud computing, Blockchain, Big Data, etc
The banking system of India, with a large and interconnected financial system, is regulated by the Reserve Bank of India. As every sector in India grows, the people of India get wealthier. Indian capital markets are expected to have a steady growth and financial services such as insurance, pensions, asset management, brokerage etc. are also growing along with India’s economic growth. Hence, investment opportunities on financial services in India are enormous if investors are ready to enter Indian financial market.
Agriculture-based industries and harvesting crops are the primary sources of livelihood for most of the India’s population. In 2019, India achieved the 9th largest exporter of agriculture based products worth of $37.4 bn. Indian government strives to increase foreign direct investment and allows 100% FDI to promote the contribution of private sectors such as agriculture-based machinery and equipment, fertilizers, horticulture, livestock farming, seed development, fish farming, and more.
The auto component industries provide us drive transmission & steering parts, body & chassis, engine parts, suspension & braking parts, equipment & electrical parts and more. India has achieved as the preferred global manufacturing base for auto OEMs. India’s auto components industry is expected to become the 3rd largest sector in the world by 2025. According to the forecasts of ACMA, this industry based on Indian exports may touch US$ 80 billion by 2026.
In India, chemical and petrochemical industries are expected to touch $300 bn by 2025, according to Invest India. These industries bring various products such as basic chemicals and its products, petrochemicals, fertilisers, paints, gases, pharmaceuticals, dyes, etc. Chemical industry includes more than 70,000 products, and provides raw materials to several SMEs such as dyestuffs, paper, finished drugs, plastics, polyester, pesticides, fertilisers and detergents. India’s chemical industries keep opening the doors for foreign investments since India needs to supply various chemicals to its population of 1.4 billion.
By the end of 2025, construction industry in India is expected to evolve as the third largest sector in the world. India allows 100% FDI under automatic route for construction of industrial and residential projects. And also India allows 100% FDI under automatic route for infrastructures like water supply, urban transport and sewage treatment. Construction sectors of India provide a number of investment opportunities for foreign companies as the country focuses on modernizing infrastructure, building ‘smart cities’, advancing logistics and transportation routes and ensuring affordable housing for every Indian citizen.
India’s ambitious Initiatives such as ‘Digital India’ and ‘Make in India’ have brought the emerging growth of production in electronic components. Hence, Indian Electronic Components Market has increased considerably and is expected to touch $1 tn by 2025. As India is one of the largest electronics markets in the world, India allows 100% FDI under the automatic route. And also, India’s young generation who like to achieve something on the digital world is an interesting aspect for foreign investors who like to invest in India’s electronic component industries.
India’s food processing sector provides huge opportunities for investors because of ever-growing stance of food-related sectors. India’s food processing industry may reach over half a trillion dollars by 2025 with favourable economic policies and good fiscal incentives. And also, India’s annual household consumption increases every year. Under NIP, 15 food processing-based projects and 20 agriculture-based projects will be implemented by the end of 2025. Food processing-related Investment opportunities in India are enormous since The Ministry of Food Processing Industries encourages foreign investments across the value chain.
India, an important and fastest growing pharmaceutical industry, is the largest global provider of generic medicines and the largest supplier of vaccines. The pharmaceutical industry in India presents potential research and development factors for drug development, advancing biotechnology and manufacturing of chemicals and medicinal products since India’s pharmaceutical industry is expected to be worth US$65 billion by 2024. Investors who like to enter Indian pharmaceutical industry may contact India’s health ministry as government of India strives to serve Indians with all types of healthcare facilities.
India with an ambitious target of producing 175 GW of renewable energy by 2022 is one of the largest renewable contributors in the world. With a large number of solar PV projects and auctioned wind, India looks at an enormous $500 billion worth of investment on renewable energy by 2028 as per the study conducted by the Institute of Energy Economics and Financial Analysis (IEEFA). When it comes to investment opportunities on renewable energy, Indian market can be the best option for investors as India’s huge population depends on renewable energy and India is full of natural resources.
Planning is a key factor to have a success in any endeavour. If you want to enter Indian market, you need to make a planning with a long-term strategy. Nowadays India is one of the most important international markets for global entrepreneurs. Globalization has modernized the economy of India for two decades, and also India has a very good history of economic trade and commerce. India, a country with around 1.4 billion consumers, is the second-most populous country in the world, and the largest producer of milk, pulses and jute in the world. In terms of nominal GDP, India has become the fifth largest economy in the world. The Indian market is looking for novel products and services to quench its 1.4 billion customers. Nevertheless, before venturing with any new project, you have to look into various issues on India –– politics, environment, various culture, language and more. PCPB of Dhunicorn helps you find hot investment opportunities in India with suggestions, connections, expertise, the component of MarketSuccess India and more.
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