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POTENTIAL
FOR INVESTMENT IN INDIA
- India presents
a vast potential for overseas investment and is actively
encouraging the entrance of foreign players into the
market. India is also one of the few markets in the
world, which offers high prospects for growth and
earning potential in practically all areas of business.
- India's share of digital information
is expected to grow 60-fold by 2020, driven by the
roll-out of 3G and BWA networks, digitisation of television
networks, and increased technology adoption among
individuals, small and medium enterprises, enterprises
and in Government services like the Unique ID project,
Census, among others, said a study.The findings of
'The Digital Universe in India' sponsored by EMC,
provider of information infrastructure technology,
stated that India's 2010 tally for digital information
equals information stored in 2.5 billion iPads of
16GB. It would mean more than 464,000 separate towers
of iPads of 16GB stacked flat on top of each other,
each as high as India's famed Qutub Minar. Or if the
2.5 billion iPads were laid end-to-end, they would
be equal to a continuos line of more than 197 million
Tata Nano cars."The digital information explosion
will create significant challenges for India's CIOs
and IT managers for two reasons. First, enterprises
have responsibility for the storage, protection and
management of 80 per cent of the digital universe's
data, and this liability will only increase as social
networking and Web 2.0 technologies continue to impact
the enterprise," said
Manoj Chugh, President, EMC India and SAARC and Director
of Global Accounts for EMC Asia Pacific & Japan."Second,
while digital information will grow 60-fold, enterprise
investments in IT and staffing will grow only in single
digits. The cumulative effect is driving CIOs to transform
traditional infrastructures into private cloud data
centers that offer internal and external customers
IT as a service," he added.The EMC-IDC study
further points out that 50 per cent more digital information
is created in India than the capacity that exists
to store it. This number will grow to 80 per cent
over the next decade. The study revealed that over
the next decade (2010 to 2020), digital information
in India will grow from 40,000 petabytes to 2.3 million
petabytes, twice as fast as the worldwide rate.He
further added that: "The digital information
deluge will translate into a significant market opportunity
ndia over the next decade. This is why EMC continues
to invest in scaling its operations as a part of its
previously announced $2 billion investment commitment
through 2014."
- India's petroleum products exports
could reach 80-90 million tonnes per year in 2-3 years,
from nearly 40 million tonnes currently, Oil Secretary
S. Sundareshan told.India's product exports were 4.79
million tonnes in July, up from 4.09 million tonnes
in June.
- Some of the country's leading
FMCG companies-they include Nestle, Coca-Cola and
Tata Coffee-are investing over Rs 1,800 crore in the
next few months to expand capacity or for inorganic
growth.Nestle India is investing Rs 950 crore to set
up two units to manufacture instant noodles and infant
foods in Karnataka and Haryana. The Karnataka unit
will be up and running in the first quarter of next
calendar year, while the Haryana unit will begin commercial
production by the end of next of next calendar year.
It also plans a fifth facility to manufacture instant
noodles, which will be put up for approval in the
next two months.A Nestle India spokesperson said:
"The new facilities will support and grow our
business in these segments, where we require more
capacity. We already have three units to manufacture
instant noodles in Punjab, Uttarakhand and Goa."
Nestle has decided to concentrate on culinary, dairy
and beverage products as key areas of growth in the
future.Nestle has also announced the setting up of
a research & development centre at Manesar at
an investment of Rs 230 crore. The R&D centre
- its 13th worldwide - will develop products specifically
aimed at the Indian market. Beverage major Coca-Cola
India is investing Rs 550 crore to set up a greenfield
beverage plant in Yadgir district of northern Karnataka.
Sources in the company say it currently does not have
any plant in this region, as a result of which it
has to be served by bottling plants in Hospet and
near Bangalore. Tata Coffee, as part of its ambition
to become a global plantation company, is scouting
for coffee plantations in Uganda, Zambia, Ethiopia
and Laos. The aim is to ensure that 40 per cent of
the company's topline comes from inorganic growth
by 2015. If everything goes to plan, around 30 per
cent of the company's coffee production will come
from overseas plantations.Hameed Huq, managing director
of Tata Coffee, said: "Expansion of coffee plantations
in India is difficult as land is very expensive. That
is why we are looking for Arabica coffee plantations
or of land overseas, especially near the equator,
which is best suited to growing coffee." Huq
says the investment on buying a plantation in these
foreign locations is at least 50-60 per cent cheaper
than in India.Tata has also tied the knot in a joint
venture with PepsiCo for affordable beverages.
- The Indian animation industry
is expected to grow at 20 per cent to reach $253 million
by 2013 from the current $122 million, according to
a study jointly brought out by Assocham and Deloitte.The
study says that TV will contribute 55 per cent of
the overall animation entertainment market, followed
by an approximately equal share of movies and the
DVD segment.The Indian animation industry primarily
caters to the US and the UK markets, and the size
of the domestic market is only 30 per cent, the study
said.According to Assocham Southern Regional Council
Chairman, Mr Ravindra Sannareddy, the US has the largest
number of animation movie releases and is home to
the two largest animation movie studios in the world
- Disney Pixar and Dreamworks.The US market is the
highest contributor to the revenues of leading game
publishers/developers in the world, namely Nintendo
and Electronic Arts.The study reveals that the Indian
domestic animation and gaming market is less than
1 per cent of the global animation and gaming market,
thus indicating huge scope for growth.The Indian gaming
market alone has been estimated at $239 million and
is expected to grow at a compounded annual growth
rate of over 50 per cent to reach $1.3 billion by
2013.The global gaming industry has been growing at
21 per cent a year to reach to $40 billion this year,
and $59 billion by 2013, the study said.India expects
investments of up to $55 billion in the next five
years in the renewable energy sector, which would
generate 35,000 MW of power, a top official said.
- India, one of the leading producers
of wind power, is encouraging investment in renewable
energy to curb emissions and reduce dependence on
oil as the country imports nearly three quarters of
the oil it consumes. "There would be investments
to the tune of $55 billion by 2015 in the renewable
energy sector which is expected to produce 35 GW of
power," Debashish Majumdar, chairman and managing
director, Indian Renewable Energy Development Agency
(IREDA) told. IREDA, established in 1987, promotes
renewable energy and energy conservation projects.
It is administered by the ministry of renewable energy
(MNRE). Renewable sources account for about 6,000
MW out of India's capacity of about 80,000 MW, but
the government believes that the country can raise
output of renewable energy to 85, 000 in a little
over a decade.
- The Indian pharmaceuticals
market looks poised to grow to $55 billion in 2020,
according to a new McKinsey & Company report -"India
Pharma 2020: Propelling access and acceptance, realising
true potential". This will be a quadrupling of
the market from the $12.6 billion the industry made
in 2009. The report states that the pharma market
has the further potential to reach $70 billion by
2020 if aggressive growth efforts are embraced. The
Indian pharmaceutical industry has been growing at
13-14 per cent in the past five years, a significant
increase over the nine per cent growth witnessed between
2000 and 2005. According to the report, five new opportunities
will capture 45 per cent of the market by 2020, growing
from the $3-billion industry today to $14-18 billion
in 2020. These are patented products, consumer healthcare,
biologics, vaccines and public health.Metro and Tier-1
markets, which have been growing at 14-15 per cent
in the last five years, will drive growth in the industry.
They account for 60 per cent of the Indian pharmaceuticals
market today and look set to continue growing to a
market size of $33 billion by 2020. This will be the
result of rapid urbanisation and the expansion of
medical infrastructure. Rural markets, on the other
hand, will constitute 25 per cent by 2020, up from
20 per cent currently, while Tier-2 markets will decline
from the present share of 20 per cent to 15 per cent.
- Tumbling voice tariffs contributing
to the declining average revenue per user (ARPU) rates,
will result in SMS volumes to reach 191.6 billion
in India by 2013, predicts Gartner.By 2013, the country
would have more than 750 million mobile connections;
therefore the SMS usage per user would essentially
drop.However, overall large base of mobile connections
would support this SMS volume. Strong organic growth
continues in Asia’s developing markets, with
marginal subscribers turning to low-cost messaging
as an entry-level service.In the mature markets of
the Asia-Pacific region, SMS has seen sustained healthy
growth as a result of steady price declines and increasingly
generous SMS and data bundles," said Madhusudan
Gupta, senior research analyst at Gartner. SMS contributes
around 8% to value added services (VAS), which in
turn contributes 10-12% of an operator’s revenue.
- The Union food processing ministry
has set a target of attracting investments to the
tune of Rs 1 lakh crore in the sector by 2015.Subodh
Kant Sahai, Union food processing minister, said:
“We are expecting investments of Rs 1 lakh crore
in the next five years. We are planning to increase
food processing to 20% of the total fruits and vegetable
produced in the country.”According to him, food
processing has grown by 10% in India while value-added
products have grown by 10-15% in the last five years.We
are looking at a growth of 35% in value-added production
by 2015,” Sahai said.
- The 234 million tonne per annum
(mtpa) Indian cement industry, which witnessed a double
digit despatch growth in December 2009 and an overall
growth thanks to infrastructure and real estate projects,
is set to add 43.2 mtpa capacity during the next 15
months (January 2010 to March 2011).South India, which
has already started feeling the heat of oversupply,
will add the maximum capacity of 17.6 million tonne
during that period. The next in line is the northern
region, which will add 9.6 mt. The western, central
and eastern regions will add 9 mt, 3 mt and 4 mt,
respectively. “The southern market with 18 players
having capacity of 1mtpa or more is the most fragmented
one in India. Capacities of three new players (Raghuram
Cement, Jayajyothi and JSW Cement with more than 2
mtpa each) will stabilise in the next 6-9 months.
With sharp price cuts, new producers may find it difficult
to break even, and this would likely to prompt some
consolidation. All the three new producers are unlikely
to participate in consolidation,” J Radhakrishnan,
analyst with IIFL, said in his report.
- The healthcare industry in the
country, which comprises hospital and allied sectors,
is projected to grow 23% per annum to touch $77-billion
mark by 2012 from the current estimated size of $35
billion, according to a Yes Bank and Assocham report.
The sector has registered a growth of 9.3% between
2000-2009, comparable to the sectoral growth rate
of other emerging economies such as China, Brazil
and Mexico. The growth in the sector would be driven
by healthcare facilities, both private and public
sector, medical diagnostic and pathlabs and the medical
insurance sector.Of the sum, diagnostic and pathology
services would account for $2.5 billion in 2012, more
than double its estimated current size of $1billion.
The growth in the segment is expected to be driven
by consolidation in the industry and increasing insurance
penetration among the country’s population. Healthcare
facilities, inclusive of public and private hospitals,
the core sector, around which the healthcare sector
is centered, would continue to contribute over 70%
of the total sector and touch a figure of $54.7 billion
by 2012.The medical insurance sector would account
for another $ 3 billion in the next three years, up
from the estimated current size of $1 billion.
- Steve King, CEO of Zenith Optimedia
Worldwide feels that new and emerging advertising
markets like India and China will power the global
industry’s recovery, on the back of positive
signals from developed markets like US, Europe. “India,
with an approximate 10% growth, will certainly be
in the top ten advertising markets in absolute dollar
terms by 2015,” he told.Zenith Optimedia, the
world’s third largest media-buying agency and
an enterprise under the Paris-based Publicis Group
is upbeat about India.It has brought fresh business
worth $100 million in the country this year.India
figures amongst Zenith Optimedia’s 20 largest
markets globally, but over the past five years, it
has been among the top three fastest growing ones.
“Most of our markets are between 15 to 20 years
old, so despite being here for only five years, this
market has responded very well. Our focus here will
be on winning local clients, apart from the international
ones. By the next five years, we will have considerably
closed the gap on the top two market leaders here,”
King said.
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