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Domestic Investment in India

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Domestic Investment in India

February, 2013


Indian economy is growing, despite the economic crisis that engulfed the world, stated Mr Anand Sharma, Union Minister for Commerce, Industry and Textiles, Government of India, while addressing a session at the 11th Pravasi Bharatiya Divas 2013. The national investment rate is around 33-34 per cent, and is expected to increase to 36 per cent by the end of 12th Five Year Plan (2012-17), highlighted Mr Sharma.

Indian tax climate was considered to be reasonably favourable and India continues to be an attractive investment destination, according to a survey conducted by Deloitte.

In addition, the total value of private equity (PE) and mergers and acquisitions (M&A) deals in November 2012 has increased five times to US$ 10.1 billion, as per a study by Grant Thornton India. The total value of inbound deals trebled to US$ 2.1 billion in November 2012. As regards, PE deals, the total value of PE deals in November 2012, rose to US$ 39 billion from US$ 0.4 billion in November 2011, indicating that PE players preferred concentrated exposure to their value investments.

Investment options in India

  • Indian manufacturing and natural resources industry plans to spend Rs 40,800 crore (US$ 7.57 billion) on IT products and services in 2013, an increase of 9.1 per cent over 2012, according to Gartner. The telecommunications category remains the biggest spending category overall in the manufacturing and natural resources industry and it is forecast to reach Rs 13,200 crore (US$ 2.45 billion) in 2013
  • India's IT and business process outsourcing (BPO) sector exports are expected to grow by 12-14 per cent in FY14 to touch US$ 84 billion - US$ 87 billion, as per National Association of Software and Services Companies (Nasscom)
  • The electronic system design and manufacturing (ESDM) sector of India is expected to touch US$ 94.2 billion by 2015 from US$ 64.6 billion in 2011, according to a report by the India Semiconductor Association (ISA) and Frost & Sullivan. The semiconductor market is expected to grow from US$ 6.03 billion in 2011 to US$ 9.7 billion by 2015. In addition, the local demand and sourcing is estimated to touch US$ 3.6 billion by 2015
  • The FM radio sector in India is expected to touch the Rs 2,300 crore (US$ 426.72 million) mark within three years of the Phase III licences' roll-out, as per estimates by Confederation of Indian Industry (CII) and Ernst & Young. The sector is expected to reach Rs 1,400 crore (US$ 259.74 million) with 245 private FM stations during 2012-13
  • The Indian pharmaceutical market is expected to grow at a compound annual growth rate (CAGR) of 14-17 per cent over 2012-16. It is now among the top five pharmaceutical emerging markets globally
  • The Indian foundry industry has lined up investments worth Rs 600 crore (US$ 111.32 million) over the next few years as it expands and adapts environment-friendly measures to garner global market share. The Indian Institute of Foundrymen (IIF), a pan-India body representing the foundry sector, entered into a memorandum of understanding (MoU) with Japan Foundry Society. The move will help implement cost-effective and eco-sensitive 'green' manufacturing standards across the country's US$ 12 billion foundry industry