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Domestic Investments

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Domestic Investment in India

August, 2013

Introduction

India's economic growth is expected to pick up a faster pace in 2013-14 and record six per cent plus levels of gross domestic product (GDP), according to Mr C Rangarajan, Chairman, Prime Minister's Economic Advisory Council (PMEAC). India expanded at a better rate as compared to its three BRIC peers Brazil, Russia and China in May 2013, as per a survey by HSBC.

Moreover, the first meeting of the Steering Group, chaired by the Principal Secretary to the Prime Minister, invited various ministries to monitor the preparation and awarding of the projects with an estimated cost of Rs 1,000 billion (US$ 16.39 billion).

Investment Options in India

  • India has a market potential of €2 billion (US$ 2.66 billion) for setting up high-voltage transmission lines by 2018, as per Alstom. The high-voltage direct current (HVDC) market is estimated at €50 billion (US$ 66.47 billion) in the next 10 years, and Alstom is targetting a 20 per cent market share
  • Private equity (PE) firms are keen to invest U$ 2 billion in the real estate market in India, according to a report by Cushman & Wakefield. PE investments in real estate was recorded at Rs 1,638 crore (US$ 268.52 million) in H1 2013 The growing stability of the market is reflected by the continuous growth of the core investors, with over Rs 7,705 crore (US$ 1.26 billion) invested in ready office space during the last three years
  • The Government of India has asked the agrochemicals industry to invest in research and development (R&D) and innovations. Agrochemicals are recognised as an essential input for increasing agricultural production and preventing crop loss before and after harvesting
  • The Government of India's decision to allow foreign direct investment (FDI) through automatic route in power exchanges, while retaining the cap at 49 per cent, will open up opportunities for overseas players to participate in the growth and development of the sector, especially the power exchanges
  • The greenfield investments by automobile manufacturers in India may entail total investments worth Rs 70 billion (US$ 1.47 billion) to be incurred by auto component manufacturers over the next three years, according to a study by ICRA
  • The logistics sector of India is valued at Rs 6.73 trillion (US$ 110 billion) and is expected to touch Rs 12.24 trillion (US$ 200 billion) by 2020. The sector is will double its growth in seven years from the present growth rate of 15 per cent, said Mr K V Mahidhar, Head, CII Institute of Logistics
  • Smartphones to a tune of 9.4 million were shipped into India, registering a growth of 167.3 per cent on an annual basis. India also witnessed 73.5 million mobile handset shipments for the January-April 2013 period
  • The Indian pharmaceutical sector is expected to grow five-fold to reach Rs 5,000 billion (US$ 81.97 billion) by 2020, as per Dr A J V Prasad, Joint Secretary, Department of Pharmaceuticals (DoP), Government of India
  • The Indian healthcare equipment sector attracted 8.8 per cent of the total investments (in terms of deal value) with an aggregate of US$ 249.01 million (20 deals), as per data released by VCCEdge. Moreso, as the healthcare coverage across the country increases, the industry is expected to register a CAGR of 12 per cent to reach Rs 4,200 billion (US$ 68.85 billion) in 2015-16
  • The risk and procurement analytics sector in India is expected to grow from the present Rs 61.24 trillion (US$ 1 billion) to Rs 183.72 trillion (US$ 3 billion) in 6-7 years, according to a report by National Association of Software and Services Companies (Nasscom). In addition, Nasscom expects the information technology (IT) services sector in India to grow by 13-14 per cent in 2013-14 and to touch Rs 13.79 trillion (US$ 225 billion) by 2020
  • Indian business intelligence (BI) software revenue is forecast to rise 16 per cent, from Rs 60 billion (US$ 98.1 million) in 2002 to Rs 69 billion (US$ 113 million) in 2013, as per a Gartner study