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:

Asia's Outperformer But Challenges Remain

Core Views

  • The Indian government led by the Bharatiya Janata Party has initiated various reforms in its first year 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.

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

India Operational Risk Coverage (9)

India Operational Risk

BMI View:

BMI View: There are a variety of security risks which 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 cyber...

India Crime & Security

BMI View:

Despite boasting Asia's third largest economy and second biggest military, India suffers from high levels of crime and security risk and the country poses moderate security risks for foreign business travellers, expatriates, and tourists. The country faces persistent terrorist risks and experiences elevated levels of petty crime and female sexual assault. Furthermore, foreign governments advise their citizens to avoid certain areas due to instability. India is a regional underperformer in the BMI Crime And Security Index, in 24th place out of 29 Asian countries with a score of 25.8 out of 100. Neighbouring states rank as follows: China (17th), Sri Lanka (19th), Nepal (21st) and Pakistan (29th).

India is a relatively safe place for business assets in terms of property crime, with only a small number of investors citing crime and theft as a major impediment to doing business. Pick-pocketing is one of the most commonly...

India Labour Market

BMI View:

BMI View: India's labour market offers many potential benefits for prospective investors. As one of the most populated countries in the world, the labour market is immense and further benefits from a low minimum wage and relatively few labour market restrictions. There are also, however, considerable risks such as the weak quality of education which suffers from large regional disparities and limited female participation in both education and the labour force. Overall therefore India is a regional underperformer on the BMI Labour Market Risk Index with a score of 47.9 out of 100 placing the country 23rd out 38 Asian states.


India Logistics

BMI View:

India, despite its considerable size and population, remains something of a sleeping giant in terms of its international trade potential and the overall value of its supply chain. While India's l economy has become increasingly liberalised over the past few years, the country's trade and logistics sectors remain hamstrung by a combination of mediocre transport infrastructure and high levels of bureaucracy and red tape. A poor utilities framework, both in terms of power generation and the availability and fuel and water are further impediments to an effective supply chain. Despite ongoing challenges, in the past few years there have been signs that the Indian government is beginning to address these inefficiencies and is channelling increased resources into modernising the country's transport and utilities framework. This improvement explains India's position in the top half of BMI's Asia Logistics Risk Index. The country places 14 th...

India Trade & Investment

BMI View:

BMI View: India offers enormous potential as an investment destination. The country boasts some of the highest regional export and import growth rates and already has a substantial total trade volume. Barriers to foreign entry, though still significant, are being reduced and the government is keen to attract further foreign investment. There are, however, significant risks to be considered, not the least of which are the high rate of corruption in the country and extensive bureaucratic hurdles which impact upon most businesses sectors. Overall India therefore has a score of 48.5 out of 100 on the BMI Trade and Investment Risk Index. This places the country 18th out of 38 Asia states and 108th out of 201 countries on a global basis.

With vast natural...

India Industry Coverage (23)


India Agribusiness

BMI View:

BMI View: We hold a positive view on the outlook for India's agribusiness sector, as the country will remain an agricultural powerhouse 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 foodstuff. 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.



India Autos

BMI View:

BMI View: A combination of helpful demographic trends and solid economic growth continues to underpin BMI's positive stance towards the Indian new vehicle sales market in 2016 and beyond. This quarter, we revised our auto sales forecasts for India and extended our forecast period to 2020.

Passenger Car and Light Commercial Vehicle Sales
e/f = BMI estimates/forecasts. Source: SIAM, BMI

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: We believe that India's defence ambitions will continue to face challenges over 2015. That said, the increase of the foreign investment cap to 49% from 26% should boost the defence industrial base.   India's security risk is   medium given India's issues with transborder and domestic terrorist groups and particularly in light of the growing prevalence of international terrorism.  BMI highlights the corruption probe into the VVIP helicopter deal has the potential to complicate further...

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: Various development plans outlined by the Indian government such as the 100 Smart Cities scheme will continue to drive and prioritise infrastructure projects. Growth will remain below potential as a still-challenging business environment, coupled with a weak currency and limited funding limits investment into the sector over the near-term.

Latest Updates And Structural Trends

  • We maintain our real growth forecast of 5.0% for India's construction sector for FY2015/16 (April - March), which represents a slight acceleration in growth, relative to the 4.8% registered in FY2014/15.

  • Numerous infrastructure development plans such as the 100 Smart Cities initiative, the Atal Mission For Rejuvenation and Urban Transformation (AMRUT) and the 'Housing For All' scheme underscores 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 see 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 increasing 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) Per Capita (USD) ...


India Metals

BMI View:

BMI View: India is set to become a major consumer of metals over the coming years as the government makes substantial efforts to improve infrastructure in the country. That said, though some roadblocks concerning the availability of raw materials has been cleared, institutional weaknesses will continue to hinder growth in the metals industry.

In contrast to the dimming outlook in major steel-producing countries, we believe India's steel sector is on track to experience moderate growth over our forecast period to 2019. While steelmakers in countries including China, Japan and South Korea are struggling with overcapacity and sluggish steel demand, the fortunes...


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 will prevent India from reaching its full growth potential.

India - Mining Industry Value Forecast
2014e 2015f 2016f

Oil & Gas

India Oil & Gas

BMI View:

BMI View: Despite incremental improvements in the country's licensing and regulatory regime, India's oil and gas production outlook remains comparatively bearish. Small field developments will buoy production in the mid-term, but are insufficient to reverse a longer-term trend of decline. Low domestic gas prices and weak international crude prices pose major headwinds to growth and will continue to disincentivise investment in the upstream. Prospects in the downstream segment are better, due to a strong fuels consumption outlook, supportive government policy and continued price deregulations.

Headline Forecasts (India 2013-2019)
2013 2014e...


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 sector in India. R...

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: The huge oversubscription of a solar PV tender in Andhra Pradesh aligns with our view that India's solar market - and the wider renewables sector - will attract significant investor interest over the next five years, given the sizeable rewards on offer in the market. The biggest risk to this positive outlook is that such high levels of competition for solar auctions have the potential to drive tariff costs to unfeasibly low levels, jeopardising project realisation.

India - Headline Renewables Forecasts
2014e 2015f 2016f


India Retail

BMI View:

BMI View: Improving income levels in India, combined with the second largest population in the world, mean a potentially huge market for retailers as household spending will reach USD1,772bn by 2019. There are still limitations to the country's market, as much of the infrastructure remains poor, and the household income per a capita is still small, while the majority of the population lives in rural areas. Two growing sectors that retailers should consider are clothing and footwear as the young urbanites become more fashion conscious and e-commerce which is growing with greater internet penetration.

India's economy is one of the fastest growing in the...


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: There have been positive changes to the fluid regulatory and business environment in India, which have increased the attractiveness of India's telecoms sector. We believe that whilst voice remains the main source of revenue at the moment, operators' strategy of migrating customers to higher-value 3G and 4G services will drive data consumption and market growth over the next five years. In addition, we also highlight India's towers market to be another key area of growth, as operators are increasingly offloading their passive infrastructure to third party tower companies in order to free up the...


India Tourism

BMI View:

BMI View: India's tourism market is growing rapidly, bolstered by a relaxation in visa restrictions and an ever expanding range of international air travel connections. The country offers a huge range of tourist attractions, and in established tourism destinations supporting infrastructure is relatively well developed. There is significant scope for expansion of both transport infrastructure and the hotel and accommodation sector, particularly outside major cities and in more rural areas, which would benefit from an expansion of tourism spending. The government is increasingly supportive of the tourism industry and is investing in a range of initiatives to increase both domestic and in...

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