Potential for Investment in India

India presents a vast potential for overseas investment and is actively encouraging the entrance of foreign players into the market. India is also one of the few markets in the world, which offers high prospects for growth and earning potential in practically all areas of business.

India’s biotechnology sector is set to become a $10 billion industry by 2015, CMD of Biocon Ltd, Kiran Mazumdar-Shaw said . She expects the industry to grow to $5 billion by next year. In 2008-09 it was $2.51 billion. “India’s biotechnology industry is at an inflexion point, and has attained a critical mass, Mazumdar-Shaw said. It now has a platform from where it can leapfrog and deliver exponential growth, she said. India is also becoming the vaccine capital.Clinical trials, agri-biotech and bio-fuels are becoming opportunities. There are a lot of growth drivers and trigger points which, she said, will deliver in the next five years.

In India's telecom sector will growth but revenue shall fall due to need for pentration to lower income class Tumbling voice tariffs contributing to the declining average revenue per user (ARPU) rates, will result in SMS volumes to reach 191.6 billion in India by 2013, predicts Gartner.By 2013, the country would have more than 750 million mobile connections; therefore the SMS usage per user would essentially drop.However, overall large base of mobile connections would support this SMS volume. Strong organic growth continues in Asia’s developing markets, with marginal subscribers turning to low-cost messaging as an entry-level service.In the mature markets of the Asia-Pacific region, SMS has seen sustained healthy growth as a result of steady price declines and increasingly generous SMS and data bundles," said Madhusudan Gupta, senior research analyst at Gartner. SMS contributes around 8% to value added services (VAS), which in turn contributes 10-12% of an operator’s revenue.


The Indian auto sector is likely to witness an overall growth of 10%-12% in sales during 2010 and a faster recovery in expected in passenger vehicle (PV) volumes—of 12%-14%—compared with 5%-6% for the commercial vehicle (CV) segment. The positive outlook for demand could result in a sharp increase in capex plans, which could offset the positive impact on credit profiles of higher volumes and lower inventories, said Fitch Ratings. The PV rebound has been supported by an improving liquidity scenario and restoration of consumer confidence; modest growth in industrial production, together with the government stimulus, has brought about stability in CV sales, though at lower levels than for PVs.Domestic CV sales grew by 22.3% during April-December 2009 compared with same period in 2008, building on the recovery in demand beginning Q4 09. However, growth trends have distinctly varied within the CV segment - depending on the tonnage capacity and end-use, as light commercial vehicles (LCVs) have been able to maintain their ground while medium and heavy commercial vehicles (M&HCVs) continued to face pressure due to the decline in industrial output.The M&HCV segment is now stabilising with the higher industrial production, while the LCV segment is showing a more rapid recovery. Fitch expects the full-year 2010 numbers to reveal moderate growth in the range of 5%-6% for domestic sales, with the first few months being driven by regulatory guidelines.


The Union food processing ministry has set a target of attracting investments to the tune of Rs 1 lakh crore in the sector by 2015.Subodh Kant Sahai, Union food processing minister, said: “We are expecting investments of Rs 1 lakh crore in the next five years. We are planning to increase food processing to 20% of the total fruits and vegetable produced in the country.”According to him, food processing has grown by 10% in India while value-added products have grown by 10-15% in the last five years.We are looking at a growth of 35% in value-added production by 2015,” Sahai said.

The 234 million tonne per annum (mtpa) Indian cement industry, which witnessed a double digit despatch growth in December 2009 and an overall growth thanks to infrastructure and real estate projects, is set to add 43.2 mtpa capacity during the next 15 months (January 2010 to March 2011).South India, which has already started feeling the heat of oversupply, will add the maximum capacity of 17.6 million tonne during that period. The next in line is the northern region, which will add 9.6 mt. The western, central and eastern regions will add 9 mt, 3 mt and 4 mt, respectively. “The southern market with 18 players having capacity of 1mtpa or more is the most fragmented one in India. Capacities of three new players (Raghuram Cement, Jayajyothi and JSW Cement with more than 2 mtpa each) will stabilise in the next 6-9 months. With sharp price cuts, new producers may find it difficult to break even, and this would likely to prompt some consolidation. All the three new producers are unlikely to participate in consolidation,” J Radhakrishnan, analyst with IIFL, said in his report.

The healthcare industry in the country, which comprises hospital and allied sectors, is projected to grow 23% per annum to touch $77-billion mark by 2012 from the current estimated size of $35 billion, according to a Yes Bank and Assocham report. The sector has registered a growth of 9.3% between 2000-2009, comparable to the sectoral growth rate of other emerging economies such as China, Brazil and Mexico. The growth in the sector would be driven by healthcare facilities, both private and public sector, medical diagnostic and pathlabs and the medical insurance sector.Of the sum, diagnostic and pathology services would account for $2.5 billion in 2012, more than double its estimated current size of $1billion. The growth in the segment is expected to be driven by consolidation in the industry and increasing insurance penetration among the country’s population. Healthcare facilities, inclusive of public and private hospitals, the core sector, around which the healthcare sector is centered, would continue to contribute over 70% of the total sector and touch a figure of $54.7 billion by 2012.The medical insurance sector would account for another $ 3 billion in the next three years, up from the estimated current size of $1 billion.


Steve King, CEO of Zenith Optimedia Worldwide feels that new and emerging advertising markets like India and China will power the global industry’s recovery, on the back of positive signals from developed markets like US, Europe. “India, with an approximate 10% growth, will certainly be in the top ten advertising markets in absolute dollar terms by 2015,” he told.Zenith Optimedia, the world’s third largest media-buying agency and an enterprise under the Paris-based Publicis Group is upbeat about India.It has brought fresh business worth $100 million in the country this year.India figures amongst Zenith Optimedia’s 20 largest markets globally, but over the past five years, it has been among the top three fastest growing ones. “Most of our markets are between 15 to 20 years old, so despite being here for only five years, this market has responded very well. Our focus here will be on winning local clients, apart from the international ones. By the next five years, we will have considerably closed the gap on the top two market leaders here,” King said.

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