India has a very large domestic market, and resilient private consumption is a major driver of economic growth. A vast supply of inexpensive but skilled labour has turned India into the back office of the world. Despite numerous problems, India has generally managed to avoid hard authoritarian rule or military coups, which have happened in many other developing countries, including India’s neighbours, Bangladesh, Myanmar and Pakistan.

We keep our clients informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 24 of India’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our expert teams. We aim to keep you one step ahead, so you can do business with ease in India.

Country Risk

India Country Risk

BMI View:

Indian Government To Continue Improving Business Environment

Core Views

  • The Indian government led by the Bharatiya Janata Party (BJP) has initiated various reforms in its first two years in office, and it will continue to enact incremental rather than big bang reforms over the coming years. That said, the lack of majority in the Rajya Sabha, India's 245-seat upper house, will remain a hurdle to the implementation of large-scale reforms. State elections, which will continue to take place over the coming years, will determine whether the BJP will attain an upper house majority by the time its term end in May 2019.

  • We remain broadly constructive on the Indian economy, and it will remain as the fastest growing major economy in Asia owing to the government's pro-business initiatives and accommodative monetary policy...

India Operational Risk Coverage (9)

India Operational Risk

BMI View:

BMI View: India offers enormous potential as an investment destination. The country's huge and diverse economy boasts among the highest trade volumes globally, and strong growth is expected over the medium term. The government is committed to attracting further foreign direct investment (FDI), and reforms and incentives are gradually removing some significant barriers to foreign entry. Nevertheless, there remain considerable risks to be considered, notably the entrenched culture of corruption, substantial trade barriers, and extensive bureaucratic hurdles, which impact upon most businesses sectors. Diverse policies and regulations implemented by different states further complicate the process of operating across the country, and will require extensive research and forward planning to navigate successfully. Overall India therefore has a score of 48.3 out of 100 on the BMI ...

India Crime & Security

BMI View:

BMI View: There are a variety of security risks that undermine India's operating environment, though none are significant enough to deter interest in this major emerging market. The country suffers from a range of internal threats including extremist religious groups, a long-running communist insurgency and separatist organisations, all of which carry out attacks on a fairly regular basis. There is also a constant underlying risk of an interstate conflict with neighbouring Pakistan. None of these threats have a considerable impact on day-to-day business operations, however, and criminal activity against property and persons is not a major concern. The main risks for foreign businesses relate to financial and...

India Labour Market

BMI View:

BMI View: India's labour market poses many challenges to businesses which hinder development and prevent the country from reaching its full economic potential. The education system remains substandard and is increasingly struggling to meet the demands of businesses in sectors such as IT services and technology. In addition, outdated labour regulations are difficult to navigate, hindering hiring and firing practices and ensuring that many workers remain trapped in the informal sector. Wholesale reform of labour laws will be necessary for investors to take advantage of India's considerable labour market potential, including a vast pool of workers and competitive wage costs. Consequently, India underperforms in BMI's Labour Market Risk Index, with a score of 44.2...

India Logistics

BMI View:

BMI View: Investors in India will face some considerable risks in terms of the country's logistics network. Electricity supplies are subject to frequent disruption, and water security is a significant concern with extensive pollution having a heavy effect on health in the country. The road and rail network - particularly in remote areas - are of poor quality, and accidents are a common occurrence. That being said, India does offer enormous growth potential and the government is making significant progress in terms of modernising and expanding the transport network, which will support sustainable...

India Trade & Investment

BMI View:

BMI View: India offers enormous potential as an investment destination. The country's huge and diverse economy boasts among the highest trade volumes globally, and strong growth is expected over the medium term. The government is committed to attracting further foreign direct investment (FDI), and reforms and incentives are gradually removing some significant barriers to foreign entry. Nevertheless, there remain considerable risks to be considered, notably the entrenched culture of corruption, substantial trade barriers, and extensive bureaucratic hurdles, which impact upon most businesses sectors. Diverse policies and regulations implemented by different states further complicate the process of operating across the country, and will require extensive research and forward planning to navigate successfully. Overall India therefore has a score of 48.3 out of 100 on the BMI ...

India Industry Coverage (22)


India Agribusiness

BMI View:

BMI View: India will remain an agricultural powerhouse over our forecast period and should be able to maintain high levels of self-sufficiency for major food crops. Production growth of various commodities will be driven by strong government support and robust demand growth for manufactured foodstuffs. We see significant growth opportunities in sub-sectors such as dairy, coffee and livestock. However, India will be increasingly vulnerable to exceptional weather phenomena and serious water shortages. Moreover, the country will remain prone to erratic government interventions, which seriously hamper its reputation as an international provider.

Key Forecasts



India Autos

BMI View:

BMI View: We believe that a combination of positive demographic trends and solid economic growth should lead to another positive year for the Indian new vehicle sales market in 2016. We are targeting 6.1% sales growth for the sector as a whole, with commercial vehicles set to outperform passenger cars.

Passenger Car and Light Commercial Vehicle Sales
f = BMI forecast. Source: SIAM, BMI
Key Views
  • Commercial vehicles are outperforming...

Commercial Banking

India Commercial Banking

BMI View:

Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Consumer Electronics

India Consumer Electronics

BMI View:

BMI View : India trails much of APAC in terms of device penetration rates and household incomes - but with our Country Risk team's positive outlook for household income, we expect the market to exhibit robust medium-term growth at a CAGR of 6.3% over 2015-2019. We expect to see more than 50mn additional Indian households gain the purchasing power to be full consumer electronics market participants over the medium term, supplementing existing replacement demand from the large premium segment. Meanwhile, increased local device manufacturing, fostered by the 'Ma...

Defence & Security

India Defence & Security

BMI View:

BMI View: India is one of the biggest defence spenders globally. The country has one of the world's largest armed forces - much of which requires modernisation - and faces a range of external and internal security threats that drive investment into military personnel and equipment including terrorism, insurgencies, tensions with neighbouring Pakistan, and China's growing assertion in the region. India remains reliant on imports to meet much of its armed forces' requirements for technologically advanced equipment; however, amid efforts to develop and expand the local defence industry under Prime Minister Modi's 'Make in India' initiative, we expect the country's huge defence trade deficit to gradually narrow over the coming decade.

Headline Defence Expenditure Forecasts (India 2016-2020)

Food & Drink

India Food & Drink

BMI View:

BMI View: Over the long-term, India offers one of the most attractive consumer bases globally, benefitting from a large and young population, rapid urbanisation and rising incomes. This will drive consumption of processed food, as well as soft and alcoholic beverages. Nevertheless, severe operating and regulatory challenges remain, hampering industry dynamism and limiting investment in some sectors such as mass grocery retail.

Headline Industry Forecasts (local currency)

  • 2015 food consumption growth = +7.0%; compound annual growth rate (CAGR) 2014-2019 = +7.0%.

  • 2015 alcoholic drink value sales growth = +13.5%; CAGR 2014 to 2019 = +12.3%.

  • 2015 soft drink value sales growth = +17.2%; CAGR 2014 to 2019 = +15.6%.

  • 2015 mass grocery retail...

Freight Transport

India Freight Transport

BMI View:

BMI View: We expect positive growth across the board in India's freight transport sector in 2015 (ending March 2016) and over the medium term. However, the growth will not be even, with the anticipated expansion in air freight especially to outperform, while road freight - where growth will be tempered in the near term by a gloomy outlook for agricultural produce - will lag.

According to our forecasts, Indian trade will see moderate growth in real terms in 2015 (ending March 2016), rising by 1.8% - although this is an improvement on the real contraction recorded the previous year. Growth will accelerate in 2016, rising to 2.7%. Exports will be the key driver of growth in both years - in 2015 exports will rise by 2.5% compared to imports' 1.0%, while in the following year the growth levels will be 3.5% and 1.8% respectively. In...

Information Technology

India Information Technology

BMI View:

BMI View: India's IT market is a regional laggard, as low incomes have stymied PC market development, leaving it far behind China, a situation that is similar in terms of enterprise IT spending. The medium-term outlook is however much improved compared to the past decade, with our household income growth forecast illustrating the potential for retail hardware vendors to capitalise on a massive deepening of the market as disposable incomes for around 50mn households pass our threshold for PC market participation. This must however be considered in the context of a high degree of price sensitivity - as well as a greater level of competition from other device categories than when East Asian economies passed through similar developmental stages. We also believe there to be the foundations for enterprise...


India Infrastructure

BMI View:

BMI View: We maintain our positive forecast for India's construction industry, underpinned by the government's plans to promote ambitious expansion across all sectors, backed by policy reform. The growth in the sector will be driven by the industrial and commercial construction and the transport sector, and persistent regulatory challenges combined with high levels of bureaucracy will continue to pose major risks to our outlook.

Latest Updates & Structural Trends

  • India's construction sector will expand throughout our forecast period up to 2025, posting 6.6% real growth in 2016 and averaging annual growth of 6.4% over 10 years. The government's plans to revitalise the PPP framework under the...


India Insurance

BMI View:

BMI View: India's insurance market will continue to expand at a fast pace over the forecast period as a favourable economic climate and rapidly growing middle class demographic driver sales of life insurance, health covers and other insurance products. The market will nevertheless remain very underdeveloped in terms of both density and penetration. Following the easing of regulations surrounding foreign ownership of Indian insurance companies, multinational insurers will play an increasing role in the industry's development.

Headline Insurance Forecasts (India 2012-2019)
2012 2013 ...

Medical Devices

India Medical Devices

BMI View:

BMI View : The Indian medical device market has entered a phase of more moderate growth. The market will still outperform within the Asia Pacific region, underpinned by a strong economy, but y-o-y growth rates will be a long way off the dynamic growth achieved up until 2012, reflecting an increasingly competitive operating environment and growing market share for lower cost domestically produced products in some areas. The expanding private sector will remain the main growth driver.

Projected Medical Device Market, 2014-2019
Total (USDmn)


India Mining

BMI View:

BMI View: India's mining sector will experience solid growth, primarily boosted by the country's positive reforms and vast mineral reserves. Despite this, the sector will continue to face challenges due to the country's inadequate operating environment, mining royalties and low metals prices, which will prevent India from reaching its full growth potential.

India - Mining Industry Value Forecast
2015e 2016f

Oil & Gas

India Oil & Gas

BMI View:

BMI View: India's oil and gas production outlook is heavily bearish, with rapid decline rates and a narrow project pipeline weighing down growth. Incremental reform of the country's fiscal and regulatory regime, alongside progressive price liberalisation, offers risks to the upside. However, further reform will be needed to unlock exploration and development in the most prospective but hard-to-access areas. The outlook on the refining sector remains broadly bullish, supported by strong forecast consumption growth, supportive government policies and continued market deregulation.

Headline Forecasts (India 2014-2020)
2014e 2015e ...


India Petrochemicals

BMI View:

While India did report growth in Indian petrochemicals production in 2015, this growth was largely unspectacular, even as feedstock prices fell and profit margins grew. The long-term challenge to the industry is removing the bureaucratic obstacles to investment, which would require greater government action on land acquisition, corruption and environmental approvals.

With a soaring domestic market and growing export-led manufacturing, India has significant potential and could replace China as Asia's premier investment destination for petrochemicals. In 9M15, chemicals growth was 4.5%, up from -0.3% in 2014, while rubber and plastic rose 3.1%, up from 2.5%. Average growth in petrochemicals demand is forecast at 8% per annum over the next five years, with the polymer market...

Pharmaceuticals & Healthcare

India Pharmaceuticals & Healthcare

BMI View:

BMI View: India's pricing regime will continue to weigh on its pharmaceutical sector's growth potential. Affecting both local and multinational pharmaceutical firms, the price cuts can be substantial, thereby compounding the uncertainty created, especially as the decision process is carried out with limited consultation with the industry. Risks will also become more acute as the government looks to reform the pricing regime following the Supreme Court's verdict that existing prices are set at unreasonably high levels.

Headline Expenditure Projections

Pharmaceuticals: INR954bn (USD16bn) in 2014 to INR1,066bn (16bn) by 2015; +11.7% in local currency terms and 4.9% in US dollar terms.

Healthcare: INR5,085bn (...


India Power

BMI View:

BMI View: Our view that power sector reforms would be a top priority for Modi's government is playing out. We are seeing notable progress in the Indian power market regarding renewable energy expansion, reducing red tape for power projects and improving fuel availability for thermal generation. That said, investment in India's power grid infrastructure will need to increase if Prime Minister Modi's ambitious power plans are to be realised. The transmission and distribution network remains highly inefficient, posing a significant risk to the expansion of the power and renewables...

Real Estate

India Real Estate

BMI View:

BMI View: India has a promising outlook in terms of commercial real estate investment as the barriers previously opposing FDI have been reduced through government policy updates. With the economy growing and higher consumer spending, office and retail markets are currently being supported financially, with a knock-on effect to the industrial warehouse market as online retail is seeing growth. Rental rates are either sustained or marginally increasing due supply and demand level in most locations; however risks in the marketplace are reducing over the coming years as India looks to modernise.

Growth in India's commercial real estate market will be supported by an uptick in economic growth. GDP is forecast for 4.2% y-o-y growth in 2015 which is expected to be sustained over the next 5 year with 10.5% in 2016. Growth will be supported by regulatory improvements and an...


India Renewables

BMI View:

BMI View: India will be a global renewables outperformer over our 10-year forecast period, with non-hydro renewables capacity to more than triple from 2015 to 2025. Ongoing government support, strong investor interest and advantageous natural conditions will drive growth in the industry, particularly in the solar segment.

India - Headline Renewables Forecasts
2015e 2016f 2017f 2018f ...


India Retail

BMI View:

BMI View: The government is playing a substantial role in India's retail sector in 2016. First, it has relaxed domestic sourcing requirements, then it allowed stores and malls to stay open 24/7 and now it is expected to allow foreign e-commerce retailers to have their own inventories. These decisions received an immediate response, with IKEA beginning the construction of its network, Apple considering first store and Amazon expanding its fulfilment centre network. We expect that 2016 will feature more entries by international retailers as the country's retail scene is becoming increasingly favourable to foreign players.

Headline Household Spending


India Shipping

BMI View:

BMI View: We expect growth at India's biggest container ports to remain robust in 2015 and 2016 with total trade recovering from negative growth in 2014. Drivers to Indian shipping are strong economic growth sustained over the past decade which is increasing domestic consumption and therefore demand for imports, improved trade between countries using Indian ports as transhipment hubs and the country's concentration on manufacturing which is boosting export volumes. The major restrain remains congestion at facilities caused by strikes and traffic exceeding handling capacity of ports.

Over the medium term 2015-2019 we anticipate average real growth in trade at 4.23% and container throughput growth at the ports of Chennai and Jawaharlal at 4.1% and 2.6% respectively. We expect infrastructure and logistical improvements at ports enabling facilities to accommodate this growth and...


India Telecommunications

BMI View:

BMI View: Our forecast maintains healthy growth in the Indian telecommunications market out to 2020 - driven by rising incomes, heavy infrastructure development and foreign investment in the sector. Currently, voice remains the main source of revenue but operators' strategy of migrating customers to higher-value 3G and 4G services will drive data consumption and market growth over the next decade. The Indian tower market is another key area of growth, as operators are increasingly offloading assets to third party tower companies in order to free up the capital needed to invest in spectrum and services. The upcoming spectrum auction towards the end of 2016 is expected to be the largest in the country's history and we...


India Tourism

BMI View:

BMI View: We maintain a broadly positive outlook for India's growing tourism industry. While the market has not yet developed to rival other regional destinations such as Thailand and Malaysia in terms of international arrivals, the inbound travel market is growing and India also presents an enormous domestic tourism market. With inbound and domestic travel growing steadily, we observe growing investor interest in India's hotel market. A number of leading global hotel groups are expanding their presence in the country, improving the range and quality of accommodation on offer. However, the market faces challenges...

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