top of page
Search

India Business Opportunities

India has emerged as the fastest-growing major economy. It is expected to be one of the top three economic powers globally over the next 10-15 years, backed by its robust democracy and strong partnerships.


The prospects of India's long term economic growth can be assessed from the following factors that encourage foreign investment:

  • The numbers are on your side: 564 million below the age of 20, 600 million growing middle-class, saving rates have tripled in the last 12 years, etc.

  • Growth mindset of Indians: Adaptability, competitive, entrepreneurial, belief in learning, earning and spending.




MARKET SIZE


As per the provisional estimates, India's real gross domestic product (GDP) at current prices stood at AUD 2.46 trillion in FY21 (April 2020 to March 2021).


India is the fourth-largest unicorn base globally, with over 21 unicorns collectively valued at AUD 98.8 billion, as per the Hurun Global Unicorn List. By 2025, India is expected to have around 100 unicorns 2025 and will create 1.1 million direct jobs, according to the Nasscom-Zinnov report 'Indian Tech Start-up'.


According to data from the Reserve Bank of India, as of the week ended on June 04, 2021, the foreign exchange reserves in India reached AUD 817 billion.



RECENT DEVELOPMENTS


With an improvement in the economic scenario, there have been investments across various sectors of the economy. Private Equity - Venture Capital (PE-VC) sector recorded assets worth AUD 27 billion in the first five months of 2021, registering a 2x growth in value compared with the same period in 2020. Some of the significant recent developments in the Indian economy are as follows:

  • Merchandise exports stood at AUD 84.9 billion between April 2021 and May 2021, while imports touched AUD 113.8 billion. The estimated value of service exports and imports between April 2021 and May 2021 stood at AUD 47.77 billion and AUD 26.81 billion, respectively.

  • Cumulative FDI equity inflows in India stood at AUD 1,030.83 billion between April 2000 and March 2021. Foreign Direct Investment (FDI) inflows in India stood at AUD8.42 billion in April 2021, registering an increase of 38% YoY.

  • Consumer Price Index (CPI) – Combined inflation was 6.30 in May 2021 against 4.23 in April 2021.

  • In June 2021, foreign portfolio investors (FPIs) turned net buyers by investing AUD 2.3 billion into the Indian markets. According to depositories data, between June 1, 2021, and June 25, 2021, FPIs invested AUD 2.78 billion in equity.



GOVERNMENT INITIATIVES


In the Union Budget 2021-22, capital expenditure for FY22 will likely increase by 34.5% to AUD 102.34 billion over FY21 to boost the economy. Increased government expenditure is expected to attract private investments, with a production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded and measured policy support is anticipated to boost the Indian economy.


In May 2021, the government approved the production linked incentive (PLI) scheme for manufacturing advanced chemistry cell (ACC) batteries at an estimated outlay of AUD 3.29 billion; this move is expected to attract domestic and foreign investments worth AUD 8.19 billion.


The Union Cabinet approved the production linked incentive (PLI) scheme for white goods (air conditioners and LED lights) with a budgetary outlay of AUD 1.15 billion and the 'National Programme on High-Efficiency Solar PV (Photo Voltic) Modules' with a cost of AUD 826.8 million.


In November 2020, the Government of India announced AUD 48.6 billion stimulus package to generate job opportunities and provide liquidity support to various sectors such as tourism, aviation, construction and housing.


Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. Mr Narendra Modi, Prime Minister of India, launched the Make in India initiative to boost the country's manufacturing sector and increase the purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. Under the Make in India initiative, the Indian government is trying to boost the contribution made by the manufacturing sector to take it to 25% of the GDP from the current 17%. Besides, the government has also developed the Digital India initiative, which focuses on three core components: creating digital infrastructure, delivering services digitally, and increasing digital literacy.


Some of the recent initiatives and developments undertaken by the government are listed below:

  • In June 2021, Finance Ministers of G-7 countries, including the US, the UK, Japan, Italy, Germany, France and Canada, attained a historic contract on taxing multinational firms. The minimum global tax rate would be at least 15%. The move is expected to benefit India to increase foreign direct investments in the country.

  • According to an official source, as of June 2021, 29 companies, including global electronics manufacturing organisations, such as companies Foxconn, Sanmina SCI, Flex, Jabil Circuit, have registered under the AUD 2.2 billion production linked incentive scheme for the telecom sector.

  • India will attract around AUD 135 billion investment in developing the oil and gas infrastructure during 2019-23.

  • The Government of India is to increase public health spending to 2.5% of the GDP by 2025.



ROAD AHEAD


As indicated by provisional estimates released by the National Statistical Office (NSO), India posted a V-shaped recovery in the second half of FY21. As per these estimates, India registered an increase of 1.1% in the second half of FY21; this was driven by the gradual and phased unlocking of industrial activities, increased investments and growth in government expenditure.


As per the Reserve Bank of India's (RBI) estimates, India's real GDP growth is projected at 9.5% in FY22; this includes an 18.5% increase in the first quarter of FY22; 7.9% growth in the second quarter of FY22; 7.2% rise in the third quarter of FY22 and 6.6% growth in the fourth quarter of FY22.


India is focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30% and has plans to increase its renewable energy capacity from 175 gigawatts (GW) by 2022.


India is expected to be the third-largest consumer economy as its consumption may triple to AUD 5.4 trillion by 2025, owing to a shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report. It is estimated to surpass the USA to become the second-largest economy in terms of purchasing power parity (PPP) by 2040 as per a report by PricewaterhouseCoopers.



BUSINESS OPPORTUNITIES IN INDIA


Manufacturing


The manufacturing sector in the country is developing. State governments in India offer lucrative opportunities to foreign businesses to set up their operations. Customisable business parks, cheaper real estate, intellectual property protection, and various other benefits are causing a shift in investment in the manufacturing sector in India.

India offers cost advantages in terms of labour cost, good industrial relations, abundant resources like raw materials & energy and robust manufacturing infrastructure.

Make in India is a national campaign promoting manufacturing growth for domestic and international products. The campaign aims to foster innovation, facilitate investment, enhance skill development, protect intellectual property, and build top-of-the-line manufacturing infrastructure.


'Make in India' initiative


The Indian government recently launched the 'Make in India' initiative to foster innovation, build top-class manufacturing, secure intellectual property, facilitate investment and enhance skill development. This initiative spans all the budding sectors of Automobiles, Automobile components, Aviation, Biotechnology, Chemicals, Construction, Defence Manufacturing, Electrical machinery, Electrical systems, Food Processing, ITM and BPM, Leather, Media & Entertainment, Mining, Oil & Gas, Pharmaceuticals, Ports & Shipping, Railways, Renewable energy, Roads & Highways, Space, Textiles & Garments, Thermal power, Tourism & Hospitality and Wellness.


FinTech Sector


The Non-Banking Financial Company – NBFC sector in India has witnessed a continuous growth rate. With 100 per cent FDI allowed in the sector and high profitability scope, many investors, have invested or are eyeing the sector to invest in India.


Health-tech Sector


India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities, thus catering to a more significant population.


The Government of India is planning to increase public health spending to 2.5% of the country's GDP by 2025.


To sum up, there are vast opportunities for investment in healthcare infrastructure in both urban and rural India.


Digital sector


IT is one of India's strengths. Given this, the Indian government has also launched digital India. The initiative aims to tap India's IT capabilities and promote IT and mobile infrastructure investments.

With both hardware and software coverage, India aims to achieve the following:

  • Improvement of electronic infrastructure, including fibre optic cables, mobile coverage, and broadband coverage;

  • Promotion of electronics marketing;

  • Promotion of more e-governance solutions by various government authorities to address business and civilian needs.


Mobile, IT, and electronics


There is an increasing demand for mobile handsets and electronics; this will create opportunities for brand owners and trading companies to supply and see growth together with the market. The Indian market also provides opportunities for software companies that offer expert solutions for mobile and e-governance. To effectively ride on the trend, investing companies must tailor their products and suite of applications and products for the Indian market.



Other sectors

  • Food & Beverages: food processing, food packaging, food warehouse and transport, health drinks, etc.

  • Healthcare: diagnostics and testing, medical equipment, health supplements, clean air and water products, etc.

  • Education: medical/nursing, 'train the teacher' programs, automotive mechanics, medical technicians, advanced courses in the upcoming fields of genetics and nanotechnologies.

  • Infrastructure: waste management, solar and wind technologies, temperature-controlled warehouses, air and noise pollution control technologies, towing trucks, and automated parking lot equipment.

Similar business prospects abound in other sectors such as homeland security, media & entertainment, hotel/motel, financial investment services, etc.


For more information on business opportunities in India or assistance to trade with or invest in India, contact our service team service@cnbeyond.com.au to book a meeting with us. Our service office in New Dehli will assist with your sales channel development, investment, sourcing and outsourincing in India.



Comentários


bottom of page