Indian Financial Services Industry Analysis

Financial services share in India's market capitalisation increased to 24% in FY21 from ~6% in FY01.

Advantage India

Growing
Demand

* Rising income is driving the demand for financial services across income brackets.

* Investment corpus in Indian insurance sector might rise to US$ 1 trillion by 2025.

* With >2,100 fintechs operating currently, India is positioned to become one of the largest digital markets with rapid expansion of mobile and internet. 

Growing Demand

Innovation

* India benefits from a large cross-utilization of channels to expand reach of financial services.

* Emerging digital gold investment options.

* In the Union Budget 2022-23 India announced plans for a central bank digital currency (CBDC) which will be known as Digital Rupee.

Innovation

Policy
support

* The government has approved 100% FDI for insurance intermediaries and increased FDI limit in the insurance sector to 74% from 49% under the Union Budget 2021-22.

Policy Support

Growing
Penetration

* Credit, insurance and investment penetration is rising in rural areas.

* HNWI participation is growing in the wealth management segment.

* Lower mutual fund penetration of 5-6% reflects latent growth opportunities.

Growing Penetration
Last updated: Dec, 2022

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