|
|
 |
|
With positive indicators of Industrial Growth such as a stable 8-9 per cent annual growth, rising foreign exchange reserves of over US$ 222 billion, a booming capital market with the popular "Sensex" index topping the majestic 17,000 mark, the Government estimating FDI flow of US$ 15.5 billion in this fiscal, and a more than 20 per cent surge in exports, it is easy to understand why India is a leading destination for foreign investment.
- The India growth story continues apace in the current fiscal year with all major sectors showing a higher growth rate than the previous year.
- The overall industrial growth was 11.7 per cent during April-May, 2006-07 as compared with 10.8 per cent in April-May, 2005-06.
- The growth rate achieved by the manufacturing and electricity sectors during April-May, 2007 was 12.7 per cent and 9.0 per cent respectively as compared to 12.2 percent and 5.5 per cent during corresponding period last year.
- Core infrastructure sectors achieved an average growth rate of 8.1 per cent during April-May, 2006-07, as compared with 7.2 per cent in April-May, 2005-06.
- The annual inflation rate in terms of WPI was 4.27 per cent for the week ended June 30, 2007 as compared with 5.21 per cent a year ago.
- The cumulative value of merchandise exports for the period April-May 2007 increased by an impressive rate of 20.37 per cent over the corresponding period in last year to touch US$ 22.4 billion.
- Aggregate deposits of banks increased by 22.8 per cent (US$ 134.2 billion) on July 6, 2007, as compared with 19.6 per cent (US$ 96.5 billion) a year ago.
- During 2007-08 (up to July 13, 2007), FIIs registered net inflows of US$ 8.4 billion as compared with outflows of US$ 2 billion in the corresponding period of 2006-07.
|
|
| Consumer Products & Industrials : |
India is currently the twelfth largest consumer market in the world and is likely to join the premier league of the world’s consumer market by 2025 improving its position to the fifth. Aggregate consumption in India is expected to grow four-fold in real terms during the period, 2006-2025 to touch US$ 1.73 trillion from US$ 420.7 billion. Also, by then, the middle class will have grown almost 12 times, from 50 million in 2006 to 583 million in 2025. Over 23 million Indians—more than the population of Australia—will number among the country’s wealthiest citizens. India's fast moving consumer goods (FMCG) sector is the fourth largest sector in the economy. The total FMCG market is in excess of US$ 17.36 billion and is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. . The Indian FMCG industry grew by 22 per cent in 2006. Of the total sales, food (43 per cent) and personal care (22 per cent) are the largest categories. The fact that the per capita income has nearly doubled in a short span of four years to just under US$ 800 in 2006-07 (from around US$ 450 in 2002-03), has boosted the growth of FMCG companies. |
|
|
|
| Business Services : |
India's exports of business services-comprising accounting, legal and auditing, management consultancy, tax consultancy and public relations services-jumped a phenomenal 139 per cent in Q1 this fiscal over Q1 of 2005-06 to US$ 4.55 billion. Export of services is expected to grow by an average 30% a year in the next five years. Many Indian auditing and consultancy firms had increased exposure to overseas markets in recent past. Even though India is yet to decide on when to open up legal and auditing services to foreign investment and participation, business services exports doubled to $10.38 billion in 2005-06 over $5.17 billion in 2004-05. But, Q1 of this fiscal is equal to 44% of the total in 2005-06 and 88% of the total in 2004-05. The maximum spurt is being witnessed in exports of financial services. In Q1 this fiscal, financial services exports were up 170% to $725 million. In 2005-06, such exports were up 232.8% to $1.7 billion against $512 million in 2004-05. |
|
|
|
| Banking & Finance : |
Reflecting India's emergence as a popular investment destination, the World Bank's Global Development Finance (GDF) 2007 reports India cornering a major portion of US$ 40.1 billion net capital inflows to South Asia in 2006. Foreign institutional investors (FIIs) continue to be bullish on India. They have pumped in a hefty US$ 6 billion in equities to date in calendar 2007. Also, reflecting confidence in the stock market, many leading domestic financial institutions, led by LIC, UTI, SBI and the Bank of India (BoI), are buying a major chunk of the broker shareholders' combined stake of 41 per cent being offered by the Bombay Stock Exchange (BSE) as part of its demutualisation process. India also became the world's eighth largest market for mergers and acquisitions in the first quarter of 2007. With buoyancy in credit growth and corresponding shortfall in deposit accretion, the credit to deposit ratio in the banking sector has shot up from 65 per cent in January 2006 to 74 per cent in January 2007. To bridge the widening gap between incremental credit disbursal and deposit accretion, banks chose to increase their benchmark prime lending rates (BPLR) to counter the hike in funding costs. |
|
|
|
| Insurance : |
The Indian insurance industry – currently valued at US$ 10.2 billion – is on an accelerated growth trajectory. With the largest number of life insurance policies in force in the world, India’s insurance sector accounted for 4.8 per cent of GDP in 2006-07, up from 3.14 per cent in 2005-06. Indian insurance companies recorded a 19.9 per cent growth in premium in dollar terms (adjusted for inflation) in 2006-07, compared to the world market growth rate of 2.9 per cent. In fact, the growth in premium has pushed India to being the 15th largest market from 19th in 2005. This rate of growth of the industry looks particularly impressive when seen against the fact that the combined penetration of both life and non-life is less than 2 per cent of the GDP compared to world average of 7.52 per cent. Clearly, the scope for growth is enormous. |
|
|
|
|
| Healthcare, Pharma & Biotech : |
The Indian healthcare sector has been growing at a frenetic pace in the past few years. The windfall began ever since the developed world discovered that it could get quality service for less than half the price. The Indian healthcare market is estimated to be US$ 30 billion and includes pharmaceuticals, healthcare, medical and diagnostic equipment and surgical equipment and supplies. Revenues from the healthcare sector account for 5.2 per cent of the GDP and it employs over 4 million people. Private spending accounts for almost 80 per cent of total healthcare expenditure. Private healthcare will continue to be the largest component in 2012 and is likely to double to US$ 35.7 billion. It could rise by an additional US$ 8.9 billion if health insurance cover is extended to the rich and middle class. Coupled with the expected increase in the pharmaceutical sector, the total healthcare market in the country could increase to US$ 53-73 billion (6.2-8.5 per cent of GDP) in the next five years. Driven by new enterprise and innovation in recent years, the biotechnology sector in India is witnessing accelerated growth. The sector is rapidly attaining critical mass in terms of skills and capabilities to become a truly global player. The Indian biotech industry today comprises over 325 companies with top three companies contributing 27 per cent of the revenues. The industry recorded revenues of US$ 2 billion and exports of US$ 1.2 billion in 2006-07. The industry is set to touch US$ 5 billion in revenues by 2010. |
|
|
|
| Technology & Telecom : |
When it comes to IT services, the world is coming to India. According to Nasscom, the Indian IT-ITeS industry recorded US$ 39.6 billion in revenues in 2006-07, up 30.7 per cent against a projected growth of 27 per cent. The industry body has projected a revenue of US$ 49-50 billion in 2007-08 at a growth rate of 24-27 per cent. Incidentally, the Indian IT industry is growing well ahead of the global industry, which is growing at about 10 per cent a year. In 2006-07, software and services exports grew by 33 per cent to register a revenue of US$ 31.4 billion, whereas the domestic segment grew by 23 per cent to US$ 8.2 billion. Within exports, IT services touched US$ 18 billion, a growth of 35.5 percent. Expected to generate exports worth US$ 60-75 billion in 2010, the IT-ITeS sectors will contribute US$ 115 billion to the economy from allied sectors as well. In terms of employment generation, the industry is expected to create about 11 million jobs (directly and indirectly) over the next three years. The information technology industry has grown its revenues ten-fold in the past decade from US$ 4.8 billion in 1997-98 to US$ 47.8 billion in 2006-07, the report noted |
|
|
|
|
| Retail : |
The Indian retail is poised for a transformation owing to a plethora of changes within and outside its marketplace. According to the India Retail Report 2005 the size of the organized retailing market (Rs. 35,000 crore in 2005) was expected to reach the figure of Rs. 100,000 crore by 2010 at an average growth rate of about 30 per cent. The Indian economy is integrating with the world, and yet it simultaneously has its own dynamics, which cushion global shocks as in no other country. India had kept the retail sector largely closed to outsiders to safeguard the livelihood of nearly 15 million small storeowners and only allows 51 per cent foreign investment in single-brand retail with prior government permission. FDI is also allowed in the wholesale business. The issue of Foreign Direct Investment (FDI) has been debated time and again as the Indian Government has been under pressure to open up further. |
|
|
|
| Real Estate & Infrastructures : |
The real estate story in India is growing bigger by the day. Industry experts believe that Indian real estate has huge demand potential in almost every sector -- especially commercial, residential and retail. Growth in commercial office space requirement is led by the burgeoning outsourcing and information technology (IT) industry. By 2010, the IT sector alone is expected to require 150 million sq.ft. of space across major cities. It is estimated that in the residential sector there is a housing shortage of 19.4 million units out of which 6.7 million are in urban India. India's infrastructure has been growing at an accelerating pace to support the economic growth rate of over 9 per cent. The six core-infrastructure industries, which account for a combined weight of 26.68 per cent in the index of industrial production (IIP), registered a growth of 8.6 per cent in 2006-07 as against 6.2 per cent during 2005-06. The combined spending on infrastructure by both the public and privates sectors accounted for about 4.6 per cent of GDP. The growth has continued apace during the current fiscal, with the six core-infrastructure industries growing at the rate of 6.9 per cent during April-June, 2007. |
|
|
|
|
|
