India has three of the most populous and cosmopolitan cities in the world—Mumbai (Bombay), Kolkata (Calcutta), and Delhi. Three other Indian cities—Bengaluru (Bangalore), Chennai (Madras), and Hyderabad—are among the world’s fastest-growing high-technology centres, and most of the world’s major information technology and software companies now have offices in India.
Due to the progressive modernization of India and the accompanying introduction of well-developed infrastructure with a highly diversified industrial base, pool of scientific and engineering personnel (one of the largest in the world), pace of agricultural expansion, the Indian economy was able to recover easily. Economic growth has been almost constant since independence. Since the liberalization of the economy in 1991 and the resulting opening to the outside world, there has been an industrial boom that is still unbroken.
In addition to a lively industry, there is still a lot of export today, which is mainly based on textile products, jewellery, chemical products, electrical machinery, pharmaceuticals, vehicles, iron, steel and leather goods.
India offers a booming start-up scene, rapid economic growth, well-trained specialists and a constantly improving infrastructure. More than three million Indians graduate each year. India enjoys a high reputation especially in courses in the fields of information technology, engineering and trains specialists for the international market. The management forges, such as the Indian Institute of Management in Ahmedabad, achieve excellent placements in the worldwide rankings every year.
Major Sectors of India
IT & BPM
India is the world's largest BPM destination and emerging as the hub for “Digital Skills”. The country spends $1.6 bn annually on training workforce in the sector. The industry is the largest employer within the private sector, employing 3.9 mn people. India is transforming into a digital economy with over 450 mn plus internet subscribers; only second to China.
Indian IT industry has more than 17,000 firms, of which over 1,000 are large firms with over 50 delivery locations in India. The country's cost competitiveness in providing IT services, which is approximately 3-4 times more cost-effective than the US, continues to be its unique selling proposition in the global sourcing market.
India is the world's 4th largest vehicle market and expected to be the world's third-largest automotive market in terms of volume by 2026.
The industry currently manufactures 26 mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycles in April-March 2020, of which 4.7 mn are exported. India holds a strong position in the international heavy vehicles arena as it is the largest tractor manufacturer, second-largest bus manufacturer and third largest heavy trucks manufacturer in the world.
The EV industry will create five crore direct and indirect jobs by 2030. In April-March 2020, overall automobile exports registered a growth of 2.95%.
Passenger vehicles exports marginally increased by 0.17% and two-wheeler exports registered a growth of 7.30% in April-March 2020 over the same period last year.
The sector attracted $24.5 bn FDI during April 2000 - June 2020; accounting for 5.1% of the total FDI inflows. 100% FDI allowed under automatic route.
Capital Goods: Engineering, Manufacturing
India’s Capital Goods manufacturing industry serves as a strong base for its engagement across sectors such as Engineering, Construction, Infrastructure and Consumer goods, amongst others. The capital goods industry in FY 2018 -19 had an overall production figure amounting to $13.6 bn.
Capital Goods industry in India provides approximately 1.4 mn direct and 7 mn indirect jobs.
Market-oriented reforms such as "Power for All" along with plans to add 93 GW by 2022 will generate huge demand for power transmission and distribution (T&D) equipment.
- By 2022, the Electrical equipment industry, comprising generation and T&D equipment, is targeted to reach a size of $100 bn
- By 2022, the T&D equipment segment is targeted to reach a size of $75 bn
100% FDI is allowed under the automatic route
Aerospace / Aviation
India is the 5th largest market in terms of aircraft passengers (domestic and international). India is now the third largest and fastest growing aviation market in terms of domestic tickets sold.
India has 91 international carriers comprising of 5 Indian carriers and 86 foreign carriers, which ensure that India is well connected with most major countries. Revenue passenger kilometer (RPK) in domestic airline demand growth of 18.6% in 2018 was three times the global RPK growth of 6.5%.
- Indian carriers are projected to increase their fleet size to 1,200 aircraft by 2024.
- Freight traffic on Indian airports is expected to cross 11.4 MT by 2032.
- Government agencies projects requirement of around 250 brownfield and green-field airports by 2020.
- India is the fastest-growing aviation market and is expected to cater to 520 mn passengers by 2037.
- India has been projected to be the second-fastest-growing country in the world for passenger traffic by the Airports Council International (ACI) in its traffic forecasts between 2017-40.
- Demand for aircraft in India is expected to be 1,750 by 2037.
Up to 100% FDI is permitted in Non-scheduled air transport services under the automatic route.
Up to 100% FDI is permitted in helicopter services and seaplanes under the automatic route.
Up to 100% FDI is permitted in MRO for maintenance and repair organizations; flying training institutes; and technical training institutes under the automatic route.
Up to 100% FDI is permitted in Ground Handling Services subject to sectoral regulations & security clearance under the automatic route.
India is the 3rd largest pharmaceuticals industry in the world by volume. It is the largest provider of generic medicines globally, occupying a 20% share in global supply by volume, and also supplies 62% of global demand for vaccines. India ranks 3rd worldwide for production by volume and 14th by value. India is the only country with largest number of US-FDA compliant Pharma plants (more than 262 including APIs) outside of USA. India has more than 2000 WHO-GMP approved Pharma Plants, 253 European Directorate of Quality Medicines (EDQM) approved plants with modern state of the art Technology.
India is the source of 60,000 generic brands across 60 therapeutic categories and manufactures more than 500 different Active Pharmaceutical Ingredients (APIs). The API industry is ranked third largest in the world contributing 57% of APIs to prequalified list of the WHO.
The country is home to more than 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities. The domestic pharmaceuticals market turnover reached $20.03 bn in 2019, up 9.3% from 2018, growing as penetration of health insurance and pharmacies rise.
- From 2018-19, India’s pharmaceuticals exports were worth $19.3 bn with a growth of 10.72% year on year
- India holds 12% of all global manufacturing sites catering to US market
- The cost of manufacturing in India is approximately 33% lower than that of the US
100% Foreign Direct Investment (FDI) is allowed under the automatic route for greenfield pharma.
100% FDI is allowed in brownfield pharma; wherein 74% is allowed under the automatic route and thereafter through government approval route.
In 2019, India was ranked as the fourth most attractive renewable energy market in the world and has the largest renewable energy expansion plan globally.
The country has set an ambitious target of 450 GW of renewable power by 2030.
Up to 100% FDI is allowed under the automatic route for renewable energy generation and distribution projects subject to provisions of The Electricity Act, 2003.