In today's dynamic and ever-changing investment landscape, it is crucial to identify emerging industries that offer significant growth potential. Investors can make informed decisions and capitalise on promising opportunities by understanding market trends and analysing key statistics. In this article, we will explore the fastest growing industries in India that are expected to thrive in 2024.
One of the fastest growing sectors in India is the electric vehicle (EV) market. 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 significantly boosted the EV industry. Additionally, reduced Goods and Services Tax (GST) for electric vehicles, income tax deductions, state-level subsidies, and incentives have further encouraged consumers to adopt electric cars.
Investing in the electric vehicle industry can be lucrative 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.
India's healthcare and insurance sectors 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. Increasing health consciousness, rising healthcare expenditures, and a greater focus on comprehensive insurance coverage fuel this growth.
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 expand, they present attractive investment opportunities for those seeking long-term growth prospects.
Renewable energy is another of India's fastest growing sectors that investors should consider in 2024. India has made significant strides in renewable energy, with a 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, investing in the renewable energy sector can yield attractive returns while contributing to a greener and more sustainable future.
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 significantly contributes 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 it 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 long-term growth and profitability opportunities. 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.
India's fast-moving consumer goods (FMCG) sector has been experiencing steady growth and is one of the booming sectors in India. 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. The online FMCG market is also 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 allow investors to benefit from the growing consumer market in India. Companies focusing on innovation, distribution efficiency, and sustainability will likely excel in this competitive sector.
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. Notably, the construction sector's output is expected to grow at a CAGR of 7% during 2019-2024, while the transportation sector's production is forecasted to grow at a CAGR of 8% during the same period.
Infrastructure development is crucial 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.
Infrastructure investment can provide long-term, stable returns as the demand for improved infrastructure facilities rises. However, it's important to note that infrastructure projects often involve long gestation periods and require careful evaluation of risks and regulatory factors.
In conclusion, the healthcare and insurance, renewable energy, IT, FMCG, infrastructure, and electric vehicle industries are emerging sectors in 2024 to invest in. These industries offer substantial growth potential, driven by favourable market conditions, government initiatives, and changing consumer preferences.
However, investors must 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 high-growth sectors by investing in alternative investments via Grip Invest. Explore Grip Invest now!
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