Top Emerging Sectors In 2023

In today's dynamic and ever-changing investment landscape, it is crucial to identify emerging industries that offer significant growth potential. By understanding market trends and analysing key statistics, investors can make informed decisions and capitalise on promising opportunities. In this article, we will explore several industries that are expected to thrive in 2023. Invest

Electric Vehicles (EV)

One of the emerging industries to invest in 2023 is the electric vehicle (EV) market in India. The transition to electric mobility is gaining momentum globally, and India is no exception. The Indian government has set ambitious targets and implemented various incentives to promote the adoption of electric vehicles.

According to industry reports, the Indian electric vehicle market size was valued at US$ 1.45 billion in 2021, and it is projected to reach a staggering US$ 113.99 billion by 2029, exhibiting a remarkable CAGR of 66.52% during the forecast period. Despite the challenges posed by the COVID-19 pandemic, the Indian EV market witnessed a growth of 11.34% in 2020 compared to the previous year.

The Indian electric vehicle market is dominated by two-wheelers, which accounted for approximately 90% of total EV sales in 2021. Three-wheelers and four-wheelers accounted for about 9% and 1% of total sales, respectively. The market size and growth rate for each segment vary, with two-wheelers expected to have a CAGR of 67% during 2022-2029, three-wheelers with a CAGR of 64%, and four-wheelers with a CAGR of 63% during the same period].

Several factors contribute to the growth of the electric vehicle market in India. The government's initiatives, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and the National Electric Mobility Mission Plan (NEMMP), have provided a significant boost to the EV industry. Additionally, the reduction in Goods and Services Tax (GST) for electric vehicles, income tax deductions, state-level subsidies, and incentives have further encouraged consumers to adopt electric vehicles.

Investing in the electric vehicle industry can be a lucrative opportunity as the demand for clean and sustainable transportation solutions continues to rise. Companies involved in electric vehicle manufacturing, battery technology, charging infrastructure, and related services are well-positioned to benefit from the market's growth. Furthermore, the government's push towards electric mobility and increasing consumer awareness of environmental issues make electric vehicles a promising sector for investment.

Healthcare And Insurance

The healthcare and insurance sectors in India have witnessed remarkable growth in recent years. According to the Indian Brand Equity Foundation (IBEF), the Indian healthcare market is projected to reach an impressive US$ 372 billion by 2022, growing at a compound annual growth rate (CAGR) of 22% from 2016 to 2022. Furthermore, the health insurance market is expected to reach US$ 94 billion by 2025, with a CAGR of 20% during 2020-2025. This growth is fueled by increasing health consciousness, rising healthcare expenditures, and a greater focus on comprehensive insurance coverage.

In addition, the number of health insurance policies issued has been on the rise. From 48.9 million policies issued in FY20, the number increased to 60.7 million in FY21. This surge in policy issuance reflects the growing awareness and demand for health insurance among the Indian population. As the healthcare and insurance sectors continue to expand, they present attractive investment opportunities for those seeking long-term growth prospects.

Renewable Energy

Renewable energy is another promising industry that investors should consider in 2023. India has made significant strides in renewable energy, with a current capacity of 95.66 GW as of March 2021. This capacity includes 38.79 GW of solar power, 39.24 GW of wind power, 10.31 GW of bio-power, and 4.7 GW of small hydropower. The government has set an ambitious target of installing 175 GW of renewable energy capacity by 2022, with solar contributing 100 GW, wind contributing 60 GW, bio-power contributing 10 GW, and small hydropower contributing 5 GW.

The renewable energy sector in India offers immense potential for growth and investment. As the country aims to reduce its dependence on fossil fuels and embrace sustainable energy sources, opportunities for solar, wind, and other renewable energy projects are expected to increase. With favourable government policies and incentives in place, investing in the renewable energy sector can yield attractive returns while contributing to a greener and more sustainable future.

Information Technology (IT)

The Indian IT industry has been a key driver of economic growth and employment in the country. Despite the challenges posed by the COVID-19 pandemic, the industry's revenue reached US$ 194 billion in FY21, marking a 2.3% year-on-year growth. The industry's export revenue accounted for approximately 8% of India's total exports, amounting to US$ 150 billion in FY21. With a workforce of around 4.47 million people as of March 2021, the IT industry continues to be a significant contributor to India's economy.

The IT industry's resilience and adaptability make it an attractive sector for investment. India's skilled workforce, technological advancements, and outsourcing capabilities have positioned the country as a global IT hub. The rise of digital transformation, cloud computing, artificial intelligence, and other emerging technologies further enhances the growth potential of the Indian IT industry. As organisations worldwide continue to invest in technology solutions and digital infrastructure, the demand for IT services is expected to remain strong.

Investing in the Indian IT industry can provide opportunities for long-term growth and profitability. Companies involved in software development, IT consulting, cybersecurity, and digital transformation are well-positioned to benefit from the increasing reliance on technology across various sectors. Furthermore, the government's initiatives to promote digitalisation and the adoption of emerging technologies create a favourable environment for IT investments.

Fast-Moving Consumer Goods (FMCG)

The fast-moving consumer goods (FMCG) sector in India has been experiencing steady growth and is expected to continue its upward trajectory in the coming years. According to IBEF, the Indian FMCG market is projected to reach US$ 220 billion by 2025, with a CAGR of 9.4% during 2020-2025. The rural FMCG market is also poised for substantial growth, estimated to reach US$ 100 billion by 2025, with a CAGR of 10.6% during 2019-2025. Additionally, the online FMCG market is expected to expand rapidly, reaching US$ 18 billion by 2023, with a CAGR of 31% during 2018-2023.

Several factors contribute to the growth of the FMCG sector in India. The rising disposable income, urbanisation, changing consumer preferences, and the increasing penetration of e-commerce platforms have fueled the demand for FMCG products. Furthermore, the FMCG industry has shown resilience during uncertain times, making it an attractive investment option.

Investing in established FMCG companies or exploring opportunities in niche segments can provide investors with a chance to benefit from the growing consumer market in India. Companies focusing on innovation, distribution efficiency, and sustainability are likely to excel in this competitive sector.

Infrastructure

The infrastructure sector in India presents significant investment prospects driven by the country's ambitious plans for development and modernisation. According to IBEF, the Indian infrastructure sector is expected to attract investments worth US$ 1.4 trillion during 2019-2023. The sector's output is projected to grow at a CAGR of 7.6% from 2016 to 2025[^4^]. Notably, the construction sector's output is expected to grow at a CAGR of 7% during 2019-2024, while the transportation sector's output is forecasted to grow at a CAGR of 8% during the same period.

Infrastructure development plays a crucial role in supporting economic growth and improving quality of life. The Indian government's focus on initiatives like Smart Cities, affordable housing, renewable energy infrastructure, and transportation networks opens up opportunities for investment in various sub-sectors. Projects related to roads, highways, airports, railways, power generation, and urban infrastructure are among the areas that offer potential returns for investors.

Investing in infrastructure can provide long-term, stable returns as the demand for improved infrastructure facilities continues to rise. However, it's important to note that infrastructure projects often involve long gestation periods and require careful evaluation of risks and regulatory factors.

Conclusion

In conclusion, the healthcare and insurance, renewable energy, IT, FMCG, infrastructure, and electric vehicle industries are emerging sectors in 2023 to invest in. These industries offer substantial growth potential, driven by favourable market conditions, government initiatives, and changing consumer preferences. 

However, it's important for investors to conduct thorough research, analyse market trends, and consider their risk tolerance before making investment decisions. You must be wondering how you can capitalise on the growth of such booming industries. Get exposure to such high-growth sectors by investing in Asset leasing(LeaseX) and Startup Equity opportunities via Grip. Sign up on Grip now!  

Want to stay at the top of your finances? Don’t forget to sign up!

Join the community of 2.5 lakh + investors and learn more about Grip, the latest financial knick-knacks and shenanigans that take place in the world of investing.

Happy Investing!

Disclaimer: This communication does not constitute advice relating to investing or otherwise dealing in securities and is not an offer or solicitation for the purchase or sale of any securities. Grip Invest Technologies Private Limited ("Grip", formerly known as Grip Invest Advisors Private Limited) is not registered with SEBI in any capacity and does not advise, encourage, or discourage its users to invest or not invest in any securities. Grip is solely an execution-only platform and does not guarantee or assure any return on investments made by you in any opportunities sourced by Grip and accepts no liability for consequences of any actions taken based on the information provided. Your investment is solely based on your judgement. Investments in debt securities are subject to risks. Read all the offer related documents carefully.