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Vast Opportunities
POWER
Outlook
- The Government of India has planned over 78,000 MW of new generation capacity in the next five years.
- Supplementary investment is also required in Transmission and Distribution networks.
- Power costs need to be reduced from the current high of 8-10 cents/unit by a combination of lower AT & C losses, increased generation efficiencies and added low-cost generating capacity.
Potential
- Huge demand-supply gap: All India average energy shortfall of 9% and peak demand shortfall of 14%.
- key reforms implemented by Government of India will foster growth in all segments.
- Unbundling of vertically integrated State Electricity Boards.
- “Open Access” to Transmission and Distribution networks.
- Select distribution circles to be franchised/privatized.
- Various Tariff reforms are being introduced by regulatory authorities.
- Opportunities in Generation for :
- Ultra Mega Power Plants (UMPP) – 9 projects of 4000 MW each.
- Coal based plants at pithead or coastal locations (imported coal).
- Natural Gas/CNG-based turbines at load centres or near gas terminals.
- Hydel power potential of 150,000 MW is untapped as assessed by the Government of India.
- Renovation, modernisation, up-rating and life extension of old thermal and hydro power plants.
- Opportunities in Transmission network ventures - additional 60,000 circuit km of Transmission network expected by 2012.
- Ultra Mega Power Plants (UMPP) – 9 projects of 4000 MW each.
- Total investment opportunity of about US$ 150 billion over a 5 year horizon.
Source: Investment Commission
TELECOMMUNICATION
Outlook
- Annual projected growth at 12-15% for passenger traffic, and 15-18% for cargo traffic.
- Over US$90 billion investment is required over the next 5 years to improve road infrastructure.
- It is expected that the Road sector investments will grow at 19% p.a.
Potential
- Favourable demographics and socio-economic factors leading to high growth.
- Growth of disposable income combined with changes in lifestyle.
- Increasing affordability - low tariffs, easy payment plans and low-cost handset.
- Increased coverage and availability of mobile services.
- Investment opportunity of over US$76 billion across many areas.
- Network infrastructure to increase service coverage.
- Roll-out of additional network for 2G, 3G, WIMAX etc.
- Applications/software for voice, data and broadcasting services.
- Nokia, Siemens, Alcatel, Lucent, Elcoteq, LG, Ericsson have already invested in India.
ROADS
Outlook
- Annual projected growth at 12-15% for passenger traffic, and 15-18% for cargo traffic.
- Over US$90 billion investment is required over the next 5 years to improve road infrastructure.
- It is expected that the Road sector investments will grow at 19% p.a.
Potential
- Road development is indispensable to sustain India’s economic growth.
- The government is planning to increase its expenditure on road development substantially, in order to arrange fund, cess on fuel has been introduced.
- A large component of highways is to be developed through public-private partnerships.
- Several high traffic stretches have already been awarded to private sector companies on a BOT basis.
- 40% of India’s villages do not have access to All-Weather roads.
- The Government of India has identified rural roads as one of the 6 components of the US$40 billion Bharat Nirman Programe to improve rural India.
- Investment opportunities exist in various projects being developed by NHAI for implementing the remaining phases of the National Highway Development Programe – contracts are for construction or BOT basis depending on the section being tendered.
Source: Investment Commission
PORTS
Outlook
- It is projected that Cargo handling at all the ports to grow at 7.7% p.a. till 2013-14 with minor ports growing at a faster rate of 8.5%.
- It is projected that Traffic at major ports will reach 793 million tonnes by 2013-14.
- It is expected that level of containerisation to increase significantly over current levels of 15%.
- It is expected that containerised cargo to grow at 17.3% over the next 9 years.
- Exports have grown at a CAGR of 25% p.a. over the last 2 years to reach US$124 billion and will contribute significantly to the development of ports.
- A large portion of the foreign trade to be through the maritime route- 95% by volume and 70% by value.
- Mainline operators to increase direct sailing frequency to Indian ports.
Potential
- Growth in merchandise exports projected at over 13% p.a. underlines the need for large investments in port infrastructure .
- The Government has identified huge investment need of US$12.4 billion in the major ports under National Maritime Development Program (NMDP) to boost infrastructure at these ports in the next 9 years.
- Under NMDP, 276 projects have been identified for the development of major ports.
- Private sector is seen by the government as the key partner to improve major and minor ports, as 67% of the proposed investment in major ports envisaged from private players.
- The plan proposes an additional port handling capacity of 545 MMTA from 2006-07 in Major Ports through:
- Projects related to port development (construction of jetties, berths etc.
- Procurement, replacement or upgradation of port equipment.
- Deepening of channels to improve draft .
- Projects related to port connectivity.
- Expected investments of US$7.7 billion in minor Ports.
- Fourth terminal at Jawaharlal Nehru Port Trust will likely to attract an investment of US$1 billion.
Source: Investment Commission
CIVIL AVIATION & AIRPORTS
Outlook
- It is projected that the Passenger traffic will grow at a CAGR of over 15% in the next 5 years.
- Expected to cross 145 million passengers p.a. by 2010.
- Vision 2020 envisages creating infrastructure to handle 280 million passengers by 2020.
- Investment opportunities of US$110 billion envisaged upto 2020 with US$80 billion in new aircraft and US$30 billion in development of airport infrastructure.
- Air cargo traffic to grow at over 11.4% p.a. over the next 5 years and will exceed 2.8 million tonnes by 2010.
- The Government has planned major investments in new airports and upgradation of existing airports, recent upgradation of Delhi , Mumbai & Bangalore airports reflects the opportunities available.
Potential
- Favorable demographics and rapid economic growth will ensure continued boom in domestic passenger traffic and international outbound traffic.
- International inbound traffic will also grow rapidly with increasing investment and trade activity and continuous marketing of India's rich heritage and natural beauty to international leisure travelers will be consequent create high demand for investments in aviation infrastructure.
- Major opportunities lie in :
- Greenfield airport projects in resort destinations and emerging metros such as Kanpur, Goa, Pune, Navi Mumbai, Ludhiana, etc.
- Cityside development opportunities for upgradation of 35 non-metro airports.
- About 25 regional greenfield/unutilised airports likely to be bid out for private development.
Source: Investment Commission
PETROLEUM & NATURAL GAS
Outlook
- High GDP growth rate, rapidly growing vehicle population and better road infrastructure will drive consumption of petroleum products.
- Industry is expected to have CAGR of about 12%.
- Over 92 MMT of additional refining capacity planned by 2012.
- Over 100 MMSCMD of additional demand for Natural Gas in the next 4 years.
- Recent gas finds and increased use of gas for power generation, petrochemicals, fertilisers and city gas distribution.
Potential
- Several areas of unexploited potential, including :
- City gas distribution.
- LNG (import) infrastructure – terminals, regasification, pipelines to industrial consumers.
- Growing demand-supply mismatch provides opportunities for investment in the entire value chain for petroleum (refining, product pipelines, storage and retail) and Natural Gas.
- Investment need of US$22 billion and US$15 billion estimated in refining and the marketing and gas transportation network respectively by 2012.
 
Source: Investment Commission
URBAN INFRASTRUCTURE
Outlook
- India will attract as investments of more than US$50 billion in the next 5 years to improve and build urban infrastructure.
- Jawaharlal Nehru National Urban Renewal Mission (JNNURM ) is the single largest initiative of Government of India for planned development of cities.
- Opportunity for private players to partner with Urban Local Bodies (ULB) in development of urban infrastructure such as :
- Water supply and sanitation.
- Slum redevelopment.
- Urban transportation including roads, highways, expressways, Mass Rapid Transport Systems (MRTS) and metro projects.
- Solid waste management.
- The Government of India aims to carry out a large chunk of urban development work through public-private partnership.
Potential
- Water supply and sanitation in urban areas to attract investments over US$30 billion.
- Mumbai is planned to be developed as an international financial centre:
- Thrust on development of transportation systems.
- Estimated cost of development is US$40 billion over next 10 years.
- Demand for 1.1 million low income houses by 2015.
- Mass Rapid Transport Systems (MRTS) being developed in cities such as Bengaluru, Chennai, Kolkata and Hyderabad are either being implemented or expanded through the public-private partnership route.
Source: Investment Commission
BANKING & FINANCIAL SERVICES
Outlook
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It is expected that the total banking assets will grow to US$1 trillion by 2010 at a CAGR of 11% , for which over US$70 billion additional equity will be needed for growth and for Basel II compliance.
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Consolidation in the banking space likely to be driven by private players.
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Mutual funds: Assets Under Management (AUM) are expected to grow by 15% till 2010.
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It is expected that Retail finance will grow at an annual rate of 18%, from US$27.6 billion in 2003-04 to over US$75 billion by 2010.
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Demand for credit likely to grow at very rapid pace at 25% p.a. with rapid GDP growth.
Potential
- India’s Demographic profile favours higher retail offtake - 54% of the population is in the 15-35 years age group.
- Capital expenditure by the government and private industry expected to grow at a high rate.
- SME - which account for 40% of the industrial output and 35% of direct exports lending, is a large untapped market for credit and therefore presents a significant opportunity.
- Regulatory and technological enablers leading to high growth.
- The banking system is technologically enabled with RTGS and cheque truncation in place.
- Improved asset management practices - Gross NPAs to Advances ratio reduced from 24-25% in 1993 to 2.5% in 2006-07.
- Investment opportunity across all segments in the banking and financial services sector.
- Low penetration in the pension market makes it a lucrative business segment.
- Foreign banks likely to be allowed to acquire local banks after March 2009 when the next stage of banking reforms is proposed.
Source: Investment Commission
INSURANCE
Outlook
- It is expected that the total banking assets will grow to US$1 trillion by 2010 at a CAGR of 11% , for which over US$70 billion additional equity will be needed for growth and for Basel II compliance.
Potential
- India constitutes 17% of the world’s population and therefore provides a large untapped market :
- Nearly 80% of the Indian population is without Life, Health and Non-life insurance.
- Life Insurance penetration is very low at 4.1% in 2006-07.
- Non-life penetration is even lower at 0.6% in 2006-07.
- The per capita spend on Life and Non-Life Insurance is US$33.2 and US$5.2 (2006-07), respectively compared to a world average of US$330 and US$224.
- Strong economic growth with increase in affluence and rising risk awareness leading to rapid growth in the insurance sector.
- Investment opportunities exist in both life and non-life segments with estimated investment opportunity of US$14-15 billion.
Source: Investment Commission
REAL ESTATE & CONSTRUCTION
Outlook
- The real estate market is projected to grow to US$60 billion by 2010 at a CAGR of 40%.
- Real estate companies have been successfully tapping the country’s booming capital markets for funds.
- Indian Companies have also raised equity internationally at the AIM in London.
- Tier 2 cities (non-metros) likely to experience faster growth in the future.
Potential
- Large demand-supply gap in affordable housing fuelled by tax incentives and a growing middle class with higher savings.
- Increasing demand for commercial and office space especially from the rapidly growing Retail, IT/ITeS and Hospitality sectors.
- Investment opportunities exist in almost every segment of the business :
- Housing: about 25 million new units expected to be built in 7 years.
- Office space for IT/ITES: 150 million sq. ft. across urban India by 2010.
- Commercial space for organised retailing: 220 million sq. ft. by 2010.
- Hotels and Hospitality: Over 100,000 new rooms in the next 5 years.
- Investment opportunity of over US$75 billion in the next 5 years.
- Major foreign institutional investors including Morgan Stanley, Goldman Sachs, Merrill Lynch, AIG, Blackstone and Calpers have invested or are in the process of investing in Indian real estate.
Source: Investment Commission
RETAIL
Outlook
- The overall retail market is expected to grow from US$262 billion to about US$1065 billion by 2016, with organised retail at US$165 billion (approximately 15.5% of total retail sales).
- India is expected to be among the top 5 retail markets in the world in 10 years.
- India has been identified as the most attractive destination for retail in AT Kearney’s Global Retail Development Index 2009.
Potential
- The high growth projected in domestic retail demand will be fuelled by :
- The migration of population to higher income segments with increasing per capita incomes.
- Increasing urbanisation.
- Changing consumer attitudes, especially the increasing use of credit cards.
- Growth of the population in the 20 to 49 years age band.
- There are retail opportunities in most product categories and for all types of formats.
- Food and Grocery: the largest category but largely unorganized today.
- Home Improvement and Consumer Durables: over 20% p.a. CAGR estimated in the next 10 years.
- Apparel and Eating Out: 13% p.a. CAGR projected over 10 years.
- Opportunities exist for investment in supply chain infrastructure: cold chain and logistics.
- India also has significant potential to emerge as a sourcing base for a wide variety of goods for international retail companies.
- Many international retailers including Wal-Mart, GAP, JC Penney etc. are already procuring from India.
Source: Investment Commission
TOURISM
Outlook
- Foreign tourist arrivals are targeted to grow to 10 million in 5 years.
- Domestic tourism is expected to increase by 15% to 20% p.a. over the next 5 years.
- Rapid growth in average room rates is expected to continue until sufficient new supply comes on stream.
- Average room rates increased by over 15% in 2007; the fastest growth rate was in 4-star and 5-star segments.
- Commonwealth Games 2010 also offers significant opportunity.
Potential
- Favourable demographics and rapid economic growth point to a long-term secular uptrend in the domestic demand for hotels – for business and leisure.
- International inbound traffic is expected to grow rapidly with increasing investment and trade activity.
- World Travel & Tourism Council has identified India as one of the fastest growing countries in terms of tourism demand.
- The growth momentum in domestic and international travel is expected to receive a further boost with more budget airlines/lower air-fares, open sky policies and expected improvements in travel infrastructure (roads, airports, railways) .
- There are opportunities in all price and value chain segments due to the shortage of hotel stock; plans are on to increase quality accommodation from the current 110,000 rooms to 200,000 rooms by 2011.
- Hotel-asset construction and ownership.
- Low penetration of brands (about 30%) provides opportunities for management contracts and franchising with local hotel owners/developers.
- Serviced apartments in major cities – no chain operating in all cities, very little stock .
- Need for world-class MICE infrastructure in major Indian cities.
- Significant requirement of hotel stock and tourist infrastructure for the Commonwealth Games in New Delhi in 2010.
Source: Investment Commission
METAL : STEEL & ALUMINIUM
Outlook
- India has the potential to be among the world’s top 5 producers and markets for aluminium and steel, domestic steel consumption is expected to grow by 8% p.a. to 60 million tonnes by 2010.
- Aluminium demand is expected to grow at a CAGR of 9% till 2010-11.
- India’s per capita consumption of metals is projected to increase substantially in the future.
- Low per capita consumption today: 30 kg of steel as compared to an average 150 kg globally; 0.6 kg. of aluminium as compared to 3–4 kg. in other developing countries.
Potential
- India is one of the lowest cost producers of steel, alumina and aluminium.
- India presents large investment opportunities across the value chain.
- Integrated steel, copper and aluminium plants.
- Recycling plants for secondary aluminium.
- Booming automotive and infrastructure sectors are likely to drive future demand for steel.
- Currently only 5% of steel is routed through Steel Servicing Centres; likely to increase to 35% by 2012.
- Large integrated international metal manufacturers including Mittal Steel and Dubai Aluminium have announced plans for setting up plants in India.
- POSCO’s proposed US$12 billion investment in the mineral rich state of Orissa could be India’s largest FDI till date.
- Investments of over US$30 billion in steel and about $20 billion in aluminium are in the pipeline over the next 5 years.
Source: Investment Commission
TEXTILE & GARMENT
Outlook
- High growth in textile sector is expected in both domestic market as well as exports.
- The industry is expected to grow to US$120 billion by 2012.
- The domestic market growth is driven by a large consuming class and increasing per capita consumption (currently only 3 kg. of fibre per capita: 1/3rd of world average).
- India aims to become the second largest exporter of apparel among LCCs by 2010, next only to China.
Potential
- The removal of international quota restrictions allows India to convert its cost advantages into a larger share of the global market.
- Opportunity to exploit India’s large and growing consumer market with increasing spending power.
- Cost advantages of manufacturing textiles and garments in India derive from abundant supply of inputs at competitive prices.
- Low-cost manpower with a range of skill levels – from unskilled labour to fashion design.
- SEZs being set up in this sector will build on these advantages by :
- Exemption from domestic taxes or import duties.
- A 5-year income tax holiday followed by income taxes at 50% of the normal rate for as long as 10 years.
- Reduced transaction costs.
- Better infrastructure.
- The Ministry of Textiles plans to set up 30 integrated textile parks by March 2008 at an investment of US$3.2 billion.
- Total investment opportunity of over US$57 billion for capacity expansion and modernisation.
Source: Investment Commission
ELECTRONIC HARDWARE
Outlook
- The Electronics Hardware industry is expected to grow rapidly in the coming years ,projected US$62 billion in 2010 from about US$15 billion in 2006-07.
- 44% CAGR in domestic consumption (FY 2007-FY 2010).
- Rapid growth in exports.
Potential
- Availability of low-cost, high-skill manpower.
- Growing domestic market due to low penetration levels today (see chart).
- Domestic market provides opportunities in manufacture of consumer electronic goods and mobile handsets.
- Electronics Hardware is one of the largest and fastest growing industries globally.
- Special Economic Zones (SEZ) with duty-free imports and income-tax concessions will facilitate creation of large-scale manufacturing units for the world market.
- Contract Manufacturing: a US$500 billion outsourcing opportunity by 2010 of which India can tap US$11 billion.
- Design Services: US$7 billion projected by 2010.
- Component Exports: US$5 billion projected by 2010.
- Nokia and Elcoteq Network have set up a manufacturing base for mobile handsets in India.
- India could emerge as the next hub for semiconductor manufacturing.
- Major international chipmakers are planning to enter India.
- Government expects to attract an investment of US$6-10 billion by 2010.
CHEMICAL
Outlook
- The chemical industry is projected to grow to a US$70 billion industry by 2012 with a growth rate of 15% p.a. over the next 5 years.
- Share of India in the global industry could increase from 1.9% (2007) to 2.6% (2012).
- India is expected to became the third largest polymer consumer by 2010.
Potential
- Large and growing domestic market potential due to low per capita consumption of key petrochemical derivatives like:
- 5 kg. against global average of 25 kg. for plastics.
- 4 kg. against global average of 23 kg. for polymers.
- Good R&D base with access to low-cost, high-quality human resources .
- Proven capability for chemical process development.
- Major raw materials are available within the country or readily importable.
- SEZs have no import tariffs and provide income tax concessions.
- Petroleum, Chemicals and Petrochemicals Investment Regions with a refinery/ petrochemical feedstock company as an anchor tenant would be suitable locations for domestic and export led production in petroleum, chemicals & petrochemicals.
- Major opportunities lie in all segments: Basic, Specialty and Knowledge Chemicals.
- A strong global presence in the export of dyes, pharmaceuticals and agrochemicals.
- Investment opportunity of over US$75 billion in the next 10 years.
Source: Investment Commission
AUTOMOBILES
Outlook
- The Automobile Mission Plan envisages industry to grow 5-fold to US$145 billion by 2016.
- Vehicle production expected to increase from 11 million vehicles in 2006-07 to 17 million by 2011-12.
- Passenger cars expected to be the fastest growing segment at a CAGR of 15% over next 5 years.
- Heavy trucks and small commercial vehicles (below 1.5T payload) to drive growth in commercial vehicles.
Potential
- India has several advantages making it an attractive destination for investment in the automobile sector :
- Low-cost, high-skill manpower with an abundance of engineering talent – the second largest in the world.
- Well-developed, globally competitive Auto Ancillary Industry.
- Established automobile testing and R&D centres.
- Among the lowest-cost producers of steel in the world.
- National Automotive Testing and R&D Infrastructure Project (NATRIP), a US$400 million initiative, aims to create the state-of-art dedicated Testing, Validation and R&D infrastructure across the country.
- Hyundai, Honda and Suzuki are planning to use India as a global hub for manufacture of small cars and have already committed resources over US$2 billion for capacity expansion.
- Nissan Renault have set up alliances with local players for entering the lucrative auto segment.
- Indian manufactures – Tata Motors, Mahindra & Mahindra, Bajaj Auto have major expansion plans planned in commercial vehicles and passenger car segment.
- Opportunity to set up R&D and Engineering centers.
Source: Investment Commission
AUTO COMPONENTS
Outlook
- The Indian auto component industry has potential to grow at a CAGR of 13% to reach US$40 billion by 2015 , consequent to which India’s share in world auto components could grow from 0.9% in 2005-06 to over 2.5% by 2015.
- It is projected that the Domestic market will grow at around 8-10% p.a. in the next 10 years.
- It is projected that the exports will grow at over 30% p.a.
Potential
- India is amongst the most competitive manufacturers of auto components, especially :
- Metal intensive components: forgings, stampings, castings.
- Skilled labour-intensive components: machining, wiring-harness, other electrical components
- Hi-tech components: electronic fuel injectors.
- Opportunity to address the global Auto Components market while leveraging India’s large and growing domestic market.
- Opportunity to set up R&D centres in India.
- Indian technical skills acknowledged as among the best in the world.
- High level of sourcing of auto components from low cost countries (LCC’s) to act as a driver for growth.
- Potential of over US$5 billion for investment in India.
Source: Investment Commission
GEMS & JEWELLERY
Outlook
- India is the fastest growing jewellery market in the world.
- Branded jewellery likely to be the fastest growing segment in domestic sales ,expected to grow at 40% p.a. to US$2.2 billion by 2010.
- Exports expected to grow from US$17 billion in 2006 to over US$25 billion by 2012.
Potential
- India has several well-recognised strengths which have made it a significant force in the global Gems & Jewellery business.
- Highly skilled, yet low-cost labour.
- Established manufacturing excellence in jewellery and diamond polishing.
- India is the most technologically advanced diamond cutting centre in the world.
- Opportunity to address one of the world’s largest and fastest growing Gems & Jewellery markets.
- Opportunity to leverage India’s strengths to address the global market.
Source: Investment Commission
FOODS & AGRO PRODUCTS
Outlook
- The domestic processed-food market, at US$115 billion in FY 06, is expected to grow to US$310 billion by FY 15.
- India aims to increase its share of world trade in this sector from 1.7% currently (US$7.5 billion) to 3% by 2015 (US$20 billion).
Potential
- Factors that will fuel rapid growth in demand for processed foods in the domestic market are:
- Changing lifestyles and growth in disposable income.
- Rising double-income families and proportion of women in the workforce.
- Decreasing prices of processed foods, making them more affordable thereby creating a much larger market..
- Rapid growth in organised retail (> 20% p.a.) with a variety of retail formats being developed.
- Estimated investment opportunity of about US$24 billion in the next 8 years.
- Major investment opportunities lie in processing milk, sugar, fruit, vegetables, grain-based snacks and marine products.
- An estimated 30% of new capacity could be for the export market.
Source: Investment Commission
COAL
Outlook
- Demand for coal expected to increase to 730 MMT p.a. by 2011-12 .
- Current shortage of coal is expected to increase to over 50 MMT by 2011-12.
Potential
- Availability of large reserves suitable for thermal power generation could be used for metal manufacturing.
- The coal sector is expected to grow rapidly, driven by the increasing gap between power supply and demand due to rapid economic growth.
- 9 coal-fired Ultra Mega Power Projects planned over the next 5 years could utilize over 40 MMT PA of coal.
- 4 captive coal plants will each consume over 15 MMTPA of domestically mined coal.
- 5 coastal plants will each need over 11 MMTPA imported coal.
- Need for improved technology, higher production and better productivity at existing mines.
- A US$10-15-billion investment opportunity over the next 5 years to :
- Explore and develop new coal mines.
- Manufacture and sell state-of-the-art mining equipment and technology.
- Create related infrastructure for efficient channelisation of mined coal.
Source: Investment Commission
METAL ORES
Outlook
- Iron ore production is expected to grow at a CAGR of 10-12% over the next 5 years, in step with rapid growth in the steel industry.
- Bauxite production is expected to double to over 23 million tonnes by 2010.
- High growth expected in the consumption of manganese and chromium.
Potential
- India has several advantages, making it an attractive destination for mining and value addition.
- India is relatively under-explored in terms of mineral prospecting.
- Large quantity of high-quality reserves.
- India is among the lowest cost producers of steel and alumina.
- Large and growing domestic demand.
- Strategic location: proximity to the developed European market and the fast-developing Asian markets for export of steel, aluminium.
- India presents substantial mining opportunities across all metal ores.
- Estimated 82 billion tonnes of reserves of various metals yet to be tapped.
- Large scope for investments in mining of iron ore and bauxite.
- While India has 7.5% of the world’s total bauxite deposits, aluminium production capacity is only 3% of world capacity, indicating the scope and need for new capacities.
- Recent acquisitions by Indian companies (Tata Steel and Hindalco) in the metals space auger well for increased mining activity in India.
- National Mineral Policy will encourage mineral prospecting and mining investments in India.
Source: Investment Commission
OIL & GAS EXPLORATION
Outlook
- Crude oil demand is likely to increase to about 235 MMT by 2012.
- Rising global crude oil prices have triggered increased E&P focus to expand domestic production.
- Gas demand is expected to reach 279 MMSCMD by 2012 at a CAGR of 12% for the next 5 years.
- Increased use of gas for power generation, petrochemicals, fertilizers and city gas distribution will drive demand growth.
Potential
- The growing demand-supply mismatch provides ample opportunities for investment.
- Exploration and production of crude oil, gas and CBM.
- The government is actively promoting the creation of strategic oil and gas reserves through partnerships with the private sector.
- 22% of the Indian sedimentary area is unexplored – discovery of oil fields by investors such as Cairn Energy and “giant” gas fields by Reliance, ONGC, etc. indicate a large potential for profitable investment in exploration.
- An investment need of US$40 billion is expected in exploration and production by 2012.
Source: Investment Commission
PHARMACEUTICAL
Outlook
- The Indian Pharmaceutical industry (including exports) is expected to grow at 24% p.a. till 2010.
- The pharma industry is expected to grow to US$25 billion by 2010.
- The Biotech industry is projected to grow at a CAGR of 33%, with India expected to have a significant share of the global market.
Potential
- India is an attractive global sourcing destination for pharmaceuticals.
- Availability of low-cost, high-quality production and regulatory compliance.
- Large and growing US FDA-approved plant capacity.
- Synthetic chemistry talent for early stage compound development.
- Low cost of research and world-class testing facilities.
- Cost of a research scientist in India is only about 1/6th to 1/4th of that in USA .
- Major opportunities in pharmaceuticals are in the following areas :
- Marketing of Patented Drugs.
- Contract Research and Manufacturing (CRAM).
- IT-enabled services including clinical/market data analysis.
- Clinical trials: revenues to grow from US$70 million (2002) to US$1-1.5 billion by 2010 driven by a 60% cost advantage and large gene pool for trials.
- Major opportunities in Biotechnology are in the areas of Bio-informatics, Bio-pharma, Bio-agri and Bio-services.
- Many international biotech companies like Chiron Corp, GSK and Sigma Aldrich Corp have expressed interest, especially in Bio-manufacturing.
- Recent acquisition of India pharma company , Ranbaxy by Japan Major Diachi, reflects the inherent potential in India pharma sector.
Source: Investment Commission
HEALTHCARE
Outlook
- The Indian healthcare industry is expected to grow to US$79 billion by 2012.
- Medical tourism is expected to become a US$2.2 billion industry by 2012 and India is expected to become very hub of .
Potential
- High-growth in the domestic market arising from:
- Increasing health awareness, share in total private consumption expected to increase by 10%.
- Increasing penetration of health insurance.
- Rapid growth in private sector companies owning and managing hospitals
- High-growth in medical tourism, cost of comparable treatment is on average 1/8th to 1/5th of those in western countries.
- Opportunities exist in multiple segments along the value chain
- Service providers: curative and preventive in primary, secondary and tertiary care.
- Diagnostics services: imaging and pathology labs.
- Infrastructure: hospitals, diagnostic centres.
- * 44% growth in health insurance during 2006-2007.
- Healthcare BPO: medical billing, disease coding, forms processing and claims adjudication.
- Training: large opportunity for training doctors, managers, nurses and technicians.
- Investment opportunity of over US$25 billion by 2010.
Source: Investment Commission
IT & IT ENABLED SERVICES
Outlook
- The Indian IT and ITeS industry is expected to grow to US$77 billion by 2010 ,over 25% p.a. CAGR expected.
- Exports expected to reach US$60 billion in 2010.
Potential
- India’s inherent IT capabilities - talented workforce and world-class companies.
- Availability of technically skilled and English-speaking labour force at a fraction of the costs in USA and Europe.
- Quality orientation, project and process management expertise.
- Enhanced global service delivery capabilities of Indian companies through a combination of greenfield initiatives, M&A, alliances and partnerships with local players.
- Increasing awareness among global companies about India’s capabilities in higher, value-added activities and in the Global Delivery Model.
- Leading international companies have identified custom application development and maintenance as priority areas due to a high offshoreable component.
- Increased investments by enterprises in IT infrastructure, applications and IT outsourcing.
- Demand for domestic BPOs has been largely driven by faster GDP growth and by sectors such as telecom, banking, insurance, retail, healthcare, tourism and automobiles.
Source: Investment Commission
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