With every economic sector affected by the current global crisis and everyone talking about a slowdown in business, there are still few sectors in India that will grow in this unfavorable situation. Let’s have a look.
Nobody can survive without basic foodstuffs such as milk, vegetables and drinking water. Food processing companies will hardly be affected and will more likely make profits through price increases. These are the basic needs that we as ordinary people cannot produce ourselves.
According to MFPI, the food processing industry in India has grown even as the world faced an economic recession. According to the minister, the industry is currently growing at 14 percent compared to 6-7 percent growth in 2003-04. The Indian grocery market is valued at over US$182 billion and accounts for approximately two-thirds of the total Indian retail market. Additionally, grocery retailing in India is expected to grow from around US$70 billion in 2008 to US$150 billion in 2025
As air travel has been badly affected and air ticket prices have risen sharply, frequent travelers will prefer rail to reduce travel costs, and this will lead to increased rail traffic and long queues at rail booking desks. Indian Railways freight traffic has continued to grow in recent months, albeit slowly, indicating only a minor impact of the global recession on the Indian economy.
Railways recorded revenue growth of 13.87% for the nine months ended 31st December 2008 to Rs.57,863.90 crore. While total revenue from cargo transport increased by 14.53% to Rs.39,085.22 crore during the period, revenue from passenger transport increased by 11.81% to Rs.16,242.44 crore. Railroads have increased freight revenue by increasing axle loads, improving customer service, and adopting an innovative pricing strategy.
3. PSU banks
As seen in the private sector, much of the job cuts due to the global slowdown have come from the PSU sector’s banks, which have gained a lot of confidence due to job security and security. More and more people are likely to turn to government institutions, especially banks, in search of safety and security.
A report, Opportunities in Indian Banking Sector, by market research firm RNCOS forecasts that the Indian banking sector will grow at a healthy compound annual growth rate (CAGR) of around 23.3 percent through 2011.
With education being seen as a basic requirement and in India as a long-term investment by parents, there remains a huge supply gap in terms of demand. The enthusiasm to study at foreign universities among the surviving Indian youth, which will prompt foreign educational institutions to target India, ensured a large young population ready to join. In the coming years, more and more foreign educational institutions will be established in India.
Huge government and private investments are likely to flow into the Indian education system. DE Shaw, a $36 billion global private equity firm, plans to invest approximately $200 million in India’s education sector.
People will not stop communicating with each other because of global crises, but it has been shown that it will greatly increase, especially in mobile communication. With cheap mobile phones available in the Indian market and cheaper calling rates, the sector has become the necessity and the main need of daily life.
According to industry estimates, the telecom sector started 2008 with a subscriber base of 228 million and is expected to end with a subscriber base of 332 million – a full century! Despite the recession, the telecommunications industry expects to add at least another 90 million subscribers in 2009. India’s telecoms industry is one of the fastest growing in the world and by 2010 India is projected to become the second largest telecoms market in the world.
Recent news showed that Indian IT sector will grow by 30-40% next year. And on the other hand, the industries need to cut costs to survive in the current slowdown and for that they will resort to customized IT solutions which will further fuel the demand for software solutions.
India is fast becoming a popular destination for outsourced e-publishing work. According to a report by the Confederation of Indian Industry (CII), the industry is growing at an annual rate of 35 percent and India’s outsourcing opportunities in the value-added and core services such as text editing, project management, indexing, media services and content deployment will help the Publishing BPO Industry to Reach $1.46 Billion by 2010.
India still has an adequate supply of healthcare facilities. In the healthcare sector, too, there is a huge gap between supply and demand at all levels of society. Still, there are so many urban areas where you can hardly find a multi-specialty hospital. And in the case of Metros, market sentiment itself created a need for psychological advice.
Healthcare, which is a US$35 billion industry in India, is projected to reach over US$75 billion by 2012 and US$150 billion by 2017. Clear advantages it enjoys in clinical excellence and low cost.
8. Luxury Products
The high and affluent classes of society will not be greatly affected by this global crisis, even if their value is significantly reduced. They will not change their lifestyle and stop spending on luxuries. So the luxury product market will not be affected and indeed the affluent will spend more to maintain the lifestyle. Luxury car makers are pouring in to woo the nouveau riche (Audi, BMW are recent entrants).
According to recent research on luxury trends, the number of families earning more than US$230,000 a year will more than double from 20,000 in 2002 to 53,000 by the end of 2005 and grow to 140,000 by 2010.
9. M&A and Marketing Advisors
As current business will focus on slowing down survival, marketing and business consultants will be challenged to cut costs and identify ways to survive and stay in the market. Others may band together to tackle this situation together and will challenge the marketing and M&A advisors. In a booming market there are growth strategies and M&A opportunities to advise on. When companies are making savings, consulting firms are at the right place to help clients decide where to swing the ax.
According to estimates by the Ministry of Trade and Industry, the current size of the consulting industry in India is around Rs./- 10,000 crores including exports and is expected to grow at a CAGR of around 25% in the next few years
10. Media and Entertainment
In the current bad times when people lose their jobs and have enough time to watch TV, they will look for entertainment at home and hence the advertising revenue for the commercial channels will increase. Businesses such as the production of religious texts and materials, and religious channels will also do well. The TRP of religious channels will increase compared to other entertainment/advertising channels.
According to a report released by the Federation of Indian Chambers of Commerce and Industry (FICCI), India’s M&E industry is expected to grow at a compound annual growth rate (CAGR) of 18 percent to US$23.81 billion by 2012 Dem According to the PWC report, the television industry was worth $5.48 billion in 2007, growing 18 percent from 2006. It is expected to grow 22 percent over the next five years and be worth $12-34 billion by 2012.