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7/28/2019 Sector Info

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Automobile

The Indian automotive industry has emerged as a 'sunrise sector' in the Indian economy. India is

emerging as one of the world's fastest growing passenger car markets and second largest two

wheeler manufacturer. It is also home for the largest motor cycle manufacturer and fifth largest

commercial vehicle manufacturer.

India is emerging as an export hub for sports utility vehicles (SUVs). The global automobile

majors are looking to leverage India's cost-competitive manufacturing practices and are assessing

opportunities to export SUVs to Europe, South Africa and Southeast Asia. India can emerge as a

supply hub to feed the world demand for SUVs.

India also has the largest base to export compact cars to Europe. Moreover, hybrid and electronic

vehicles are new developments on the automobile canvas and India is one of the key markets for

them. Global and Indian manufacturers are focussing their efforts to develop innovative

products, technologies and supply chains.

The amount of cumulative foreign direct investment (FDI) inflow into the automobile industry

during April 2000 to January 2013 was worth US$ 7,653 million, amounting to 4 per cent of the

total FDI inflows (in terms of US$), as per data published by Department of Industrial Policy and

Promotion (DIPP), Ministry of Commerce.

The automotive plants of global automakers in India rank among the top across the world in

terms of their productivity and quality. Top auto multinational companies (MNCs) like Hyundai,

Toyota and Suzuki rank their Indian production facilities right on top of their global pecking

order.

Road Ahead

India is expected to become the 11th largest market for Renault by the end of 2013, as per Mr

Carlos Ghosn, Chairman and CEO, Renault. India is expected to be a critical global hub for the

firm along with Brazil, Russia and, perhaps, another country in the ASEAN region.


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Additionally, the vision of AMP 2006-2016 aims India "to emerge as the destination of choice in

the world for design and manufacture of automobiles and auto components with output reaching

a level of US$ 145 billion accounting for more than 10 per cent of the GDP and providing

additional employment to 25 million people by 2016."Moreover, the introduction of alternative

fuels like hydrogen and bio fuels needs to be promoted to ensure sustainability of the industry

over the long term.

Fmcg

The FMCG sector in India is at present, the fourth largest sector with a total market size in

excess of USD 13 billion as of 2012. This sector is expected to grow to a USD 33 billion

industry by 2015 and to a whooping USD 100 billion by the year 2025.

The Fast Moving Consumer Goods (FMCG) sector in India has been growingat a healthy CAGR

of 11% over the last decade .Riding on the back of increasing demand and changing consumer

preferences, The industry is volume driven and is characterized by low margins. The products

are branded and backed by skilled marketing, heavy advertising, slick packaging and strong

distribution networks. Also, raw material prices play an important role in determining the pricing

of the final product. Modern retail formats too have contributed in a major way in pushing the

growth in the FMCG sector. With rising income levels and the spread of modern retail, the

FMCG industrys future prospects look bright which is expected to further boost sales. Growth

in the sector is led by higher urban and rural demand. The governments growing support to

agriculture will drive long-term growth in consumption from the rural sector.

Healthcare

The Indian healthcare sector is estimated to reach US$ 100 billion by 2015, growing 20 per cent

year-on-year (y-o-y), as per rating agency Fitch. The industry is expected to touch US$ 280

billion by 2020, on the back of increasing demand for specialised and quality healthcare

facilities.


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India is the most competitive destination with advantages of lower cost and sophisticated

treatments, highlighted the RNCOS report titled 'Indian Healthcare - New Avenues for Growth'.

The report further elaborates that several key trends are backing the growth of India's healthcare

sector.

Healthcare providers in India plan to spend Rs 5,700 crore (US$ 1.05 billion) on IT products and

services in 2013, a 7 per cent rise over 2012 revenues worth Rs 5,300 crore (US$ 981.50

million), according to a report by Gartner. It is expected to grow to 3.9 per cent to reach Rs 1,720

crore (US$ 318.52 million) in 2013, with most of this growth coming from enterprise

communication equipment.

Further, the hospital services market, which represents one of the most important segments of the

Indian healthcare industry, is expected to be worth US$ 81.2 billion by 2015, as per a RNCOS

report.

IT

The Indian Information Technology (IT) and Information Technology enabled Services (ITeS)

sectors go hand-in-hand in every aspect. The industry has not only transformed India's image on

the global platform, but also fuelled economic growth by energising higher education sector

(especially in engineering and computer science). The industry has employed almost 10 million

Indians and hence, has contributed a lot to social transformation in the country.

Furthermore, Indian firms, across all other sectors, largely depend on the IT & ITeS service

providers to make their business processes efficient and streamlined. Indian manufacturing sector


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has the highest IT spending followed by automotive, chemicals and consumer products

industries.

Industry body National Association of Software and Services Companies (Nasscom) predicts

that the ITeS industry will bring in around US$ 225 billion by 2020, wherein 80 per cent of the

growth would come from the presently untapped sectors and regions.

IT spending in India is projected to reach US$ 71.5 billion in 2013, an increase of 7.7 per cent as

compared to US$ 66.4 billion projected for 2012, as per a report by Gartner

Road Ahead

Indian corporate, across various industry segments, are installing and accepting IT products and

services in a big way to improve their operations throughout the entire organisation. There are

estimates that spends over IT services, across the industry segments, will witness quantum jump

in the years to come. For instance, IT spending by the Indian BFSI sector is expected to reach

US$ 3.5 billion by 2014, according to advisory firm Zinnov.

Similarly, IDC Manufacturing Insight predicts that IT spend by Indian manufacturers would

grow at an average rate of 14.5 per cent between 2012 and 2016 to reach US$ 8.78 billion, which

would be the double of manufacturing IT expenditure inculcated in 2011.

Hence, it can be fairly concluded that India Inc is increasingly updating and automating its

business processes by embracing modern IT products and services with open arms.

Telecomm

The telecommunication services have been recognised as an important tool for socio-economic

development of a nation. It is one of the prime support services needed for rapid growth and

modernisation of various sectors of the economy.

India with a user base of 120 million is the world's third largest internet market and is poised to

have up to 370 million users in 2015.India is expected to have 130.6 million mobile internet


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users by March 2014, according to a joint study by the Internet and Mobile Association of India

(IAMAI) and Indian Market Research Bureau (IMRB). The number of users accessing internet

through mobile devices was 87.1 million in December 2012.

Road Ahead

At present, India's information and communication technology (ICT) exports are the most

significant component of the internet's impact on country's GDP but private consumption and

investment from private and public sector have greater potential to grow in the future, as per a

McKinsey and Co report.

"Around 30 million of 69 million urban Generation Z consumers own mobile phones, and 3

million of these use mobile broadband on their phones," said Mr Ajay Gupta, Ericsson India's

Vice President and Head for Strategy and marketing, Ericsson.

Driven by various policy initiatives, the Indian telecom sector has witnessed a complete

transformation in the last decade. It has achieved a phenomenal growth during the last few years

and is poised to take a big leap in the future.

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