India's Growth Opportunities

India is the second most populous nation with nearly 50% of India's 1.2 billion population below the age of 25, in terms of average age of its population then it has a much higher percentage below 25 then it’s Bric Partner China. With the biggest youth population in the world this represents a large percentage of the population going to join the work force in the coming years. It's estimated that India needs to create 12 to 15 million jobs each year to ensure there is enough work so that its population can make a living and to do this it must maintain a good growth rate. The Indian economy is one of the world's best performers with an average growth rate of more than 8% over the last ten years, the IMF expects that this will decrease to between 5% to 6% for 2012/2013. India’s dilemma is that it will need to continue to grow closer to 9% to be able to support its growing population.

With nearly 600 million people being under 25 this creates a problem as well as an opportunity as this gives India a Huge resource of eager workers. The Indian population is generally well educated with English widely spoken; the Indian government has set an aspirational target of providing skills training to 500 million workers across 30 Industrial sectors by 2025. At the moment the average graduate in India is earning € 3700 euros per year on entering the labor market with a good English language capability and a strong work ethic then this is a great reason for companies to invest in India.

The middle class in India like in its fellow Bric Partners China and Brazil is growing rapidly, by 2015 it's expected that India will have 250 million people who can be classed as middle class. This is creating more disposable income and therefore higher demand for consumer related products and services such as white goods, cars, electronics, fashion, mobile phones, travel, leisure products, shopping malls and Western brands. With the rising income and growing middle class,  India today offers significant opportunities for businesses.

Government Infrastructure is an area where the Indian government is targeting improvements with the current system still running along the lines of the British Raj of some 70 to 80 years ago, 200 billion dollars has been pledged to improve this over the next 10 years.   

Urbanization is another very important issue in India; currently 30% of its population lives in urban areas but by 2050 this is expected to rise to 50%. At the moment there are 55 centers of urbanization in India with over one million people. In a recent report the Indian government stated that it needs to spend $ 1 trillion dollars on infrastructure between 2012 and 2017 to keep peace with India's growing modernization.

With this infrastructe spending and growing population of new workers it’s creating opportunities for suppliers of resources, construction equipment and services, Education/training service providers, Logistics technology and support. With the growing wealth of the Indian population and a fast emerging middle class eating habits will also change and this means a changing Agribusiness which will create opportunities in sectors for companies who can supply technology and services to meet India's changing consumption habits. India will need to greatly improve its Environmental infrastructure to support its growing economy, this includes areas such as Energy, Waste/recycling, water resource management and infrastructure and air pollution control which means moving away from an over reliance on Coal use. The renewable energy sector will also need greater investment in India so that India can diversify its Energy mix. The nuclear industry in India is developing and with recent agreements signed in October with Australia to supply uranium then this sector is moving forward.

The largest segment of Indian industry is the Engineering sector which is India’s largest foreign exchange earner; the Engineering sector gets around 63% of all foreign business activities and was worth just under € 60 euros in 2011. The Indian government is continuing to invest in this industry by providing better training and education  for its future workforce ; by 2015 India is targeting to grow this Industry to be worth over € 120 billion euros. In the Engineering service side India expects to have a 20% share in World trade by 2015.

Another area which is expected to attract significant Foreign Direct Investment (FDI) is the retail Industry with the Indian Government is recently relaxing the restrictions in this area. On September 14 2012 the Indian Government reached a landmark decision to allow up to 51% FDI in multi brand retail in India; this is expected to lead to major international companies entering the Indian market. Currently the Indian retail market is worth € 400 billion euros which is the 5th largest in the world; some retail experts expect the consumer market to be worth € 2.8 trillion Euros by 2020.

Without a doubt India offers opportunities for companies supplying technology and services growth for 2012/2013 will slow when compared to the previous 10 years but it won’t be long until this gets closer to double digit growth again so that India can achieve its target of being the 3rd largest economy on the planet by 2025.