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:

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.

  • We remain broadly constructive on the Indian economy, forecasting real GDP growth to accelerate to 7.6% in FY2015/16 (April-March) from 7.3% in FY2014/15. The government's pro-business initiatives and accommodative monetary policy by the central bank will support a gradual economic growth recovery over the coming quarters.

  • Headline inflation has eased significantly in India on the back of moderation in food prices, which accounts for approximately half of the...

To read the full article Register for Free or Login

India Operational Risk Coverage (9)

India Operational Risk

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 impacting heavily upon 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 long term economic growth. As such, India has an overall score of 56.6 out of 100 on the BMI Logistics Risk Index, placing the country 16th out of 38 states in the Asia...

To read the full article Register for Free or Login

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...

To read the full article Register for Free or Login

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.

Despite...

To read the full article Register for Free or Login

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...

To read the full article Register for Free or Login

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 18 th out of 38 Asia states and 107 th out of 201 countries on a global basis.

With vast natural resources and a large labour pool, India has developed a strong export sector based on an expanding domestic manufacturing...

To read the full article Register for Free or Login

India Industry Coverage (24)

Agribusiness

India Agribusiness

BMI View:

BMI View: We hold a positive view on India's agribusiness sector, as the country will remain an agricultural powerhouse and is likely 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 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 owing to climate change effects and serious water shortages. Moreover, the country will remain prone to erratic government intervention, which seriously hampers its reputation as an in...

To read the full article Register for Free or Login

Autos

India Autos

BMI View:

New vehicle sales have got off to a positive start for FY15/16 (April-March). Over the first quarter of the fiscal year, new passenger car (PC) sales were up by 8.57% y-o-y, at 482,332 units, with commercial vehicle (CV) sales up by 3.55% y-o-y, at 146,159 units, according to figures from the Society of Indian Automobile Manufacturers (SIAM).

However, June itself was something of a disappointment, with new vehicle sales dropping by 0.5% y-o-y, to 217,642 units. This marked the first monthly decline in Indian new vehicle sales since October 2014. Sales of utility vehicles declined 5.9%, while demand for vans fell 7.2%. According to a report in the Economic Times, the temporary closure of car production facilities for maintenance in June contributed to the decline in sales. 'Three major carmakers have shut their factories for annual maintenance that has resulted in this minor fall. The retail sales have been moderate, but the car...

To read the full article Register for Free or Login

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

To read the full article Register for Free or Login

Consumer Electronics

India Consumer Electronics

BMI View:

BMI View : India's status as a large emerging market that is making progress on the policy environment for a range of sectors, combined with its late developer status in terms of consumer electronics device adoption rates, means we expect it to be a regional outperformer over the medium term. We expect the market to remain on a strong growth trajectory 2015-2019, with particularly robust demand growth for computer hardware and handsets expected. We forecast the total consumer electronics spend in India will increase by 6.7% in US dollar terms in 2015...

To read the full article Register for Free or Login

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...

To read the full article Register for Free or Login

Food & Drink

India Food & Drink

BMI View:

BMI View: Over the long term, the Indian economy presents one of the best growth stories globally. The Indian population is the second largest in the world and is forecast to continue to grow for decades. Real GDP will also grow at an average of around 6.8% to 2024, with per capita incomes rising at a similar rate. We forecast that inflation will average around 4% over the longer term, which should be a sustainable level for the economy. We maintain a bullish long-term outlook on food consumption within the country, especially as multinationals penetrate the market with greater force and industry regulation becomes more favourable to foreign investors.

Headline Industry Forecasts (local currency)

  • 2015...

To read the full article Register for Free or Login

Freight Transport

India Freight Transport

BMI View:

BMI View: We expect positive growth across the board in India's freight transport sector in 2015 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.

India's trade will enjoy growth in real terms in 2015 (ending March 2016), driven by an expansion in both imports and exports. In real terms, we forecast an expansion of 1.8% in total trade this year, thanks to a real expansion of 1.0% in imports and 2.5% in exports. Growth in trade will accelerate moderately in 2016, when we forecast growth of 2.7%. In nominal terms, however, there will be a contraction in 2015, when we expect that trade will shrink by 1.4% to USD986.6bn. Growth will return next year at 5.7%, leading to trade...

To read the full article Register for Free or Login

Information Technology

India Information Technology

BMI View:

BMI View: With the exception of its role as an outsourcing hub, India's IT market development trails far behind fellow Asian giant China on virtually all metrics. However, India's position as a regional laggard, but one with a robust economic outlook and an improving business environment, means its relatively undeveloped status translates into great growth potential over the medium term. This could see it become a regional outperformer, although issues such as inequality, weak...

To read the full article Register for Free or Login

Infrastructure

India Infrastructure

BMI View:

BMI View: We expect a slight pickup in India's construction sector in FY20115/16, after holding a more conservative outlook in FY2014/15 and forecast growth to come in at 5.0%. Growth will be underpinned by positive reform momentum, an improving funding environment and continued focus by the government to develop the country's infrastructure which will help to accelerate infrastructure projects. The country's potential will however, continue to be hindered by a relatively negative business environment.

Key Trends And Developments

  • We remain conservative towards the near-term outlook of...

To read the full article Register for Free or Login

Insurance

India Insurance

BMI View:

BMI View : Over the forecast period, India should remain one of the faster growing of the large national life insurance markets. Thanks to the new Insurance Bill, the maximum stake that a foreign insurer can hold in an insurance JV has been lifted from 26% to 49%. Many companies will have greater access to capital and know-how as a result. The government's successful launch of new and basic social security plans (including life insurance, accident and pension offerings) will boost the public's understanding of the advantages of insurance. In the non-life segment, growth will be boosted by the continuing expansion of health insurance. Micro-insurance should be a significant opportunity for growth from 2020.

The main challenges to India's insurance sector are...

To read the full article Register for Free or Login

Medical Devices

India Medical Devices

BMI View:

BMI Industry View : The Indian medical device market ranks among the world's top 20 but, despite strong growth rates, it remains disproportionately small with per capita spending of less than USD3.0. After registering strong growth between 2010 and 2012, the sharp depreciation of the rupee that took hold from May 2013 has dampened growth in US dollar terms. Much of future increased demand will come from the private sector which is expanding to meet the healthcare needs of India's growing middle-class. The underfunded public sector will struggle...

To read the full article Register for Free or Login

Metals

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...

To read the full article Register for Free or Login

Mining

India Mining

BMI View:

BMI View: India's inadequate operating environment will continue to hamper growth in the mining sector. Despite positive regulatory reforms, it is unlikely that the domestic coal deficit will be reduced anytime soon. India's new mining bill will generally improve mineral production by reopening previously closed mines and improve the operational certainty of miners. However, in an environment of lower prices, the additional costs that come along with the bill will dampen its impact on production.

While growing domestic demand for commodities will incentivise state-owned miners to expand production, we believe that India's poor operating environment will continue to restrict growth in the mining sector. A spate of bureaucratic and regulatory hurdles will remain major challenges for miners to grapple with over the coming quarters. For instance, the...

To read the full article Register for Free or Login

Oil & Gas

India Oil & Gas

BMI View:

BMI View: Continued regulatory reform is unlocking marginal and stranded resources, offering upside to India's mid-term production outlook. However, pricing remains insufficient to stimulate investment in the country's most prospective offshore and unconventional acreage, undermining a more sustainable growth in output. The outlook on the downstream sector is broadly bullish, supported by ongoing fuel price liberalisation, lower-cost crude feedstock and an expanding market domestically.

Headline Forecasts (India 2013-2019)
2013 2014e 2015f...

To read the full article Register for Free or Login

Petrochemicals

India Petrochemicals

BMI View:

BMI View: The outlook for the Indian petrochemicals industry has improved markedly in recent months due to a combination of President Modi's economic liberalisation, market growth and the positive effect of falling naphtha prices on competitiveness, according to BMI's latest India Petrochemicals Report. The scenario should boost opportunities for investment in new capacity as well as adding value through the production chain.

Q315 should see a surge in polymers capacities, particularly in polyethylene (PE) which could put the market in surplus by the end of the year. India's polyethylene (PE) market is moving into self-sufficiency with a number of plants due to open in Q315; it is poised for a slight surplus in 2015 with new plants coming on-stream in coming months. Project completions include ONGC Petro-additions Ltd's...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

India Pharmaceuticals & Healthcare

BMI View:

BMI View: Internationalisation of Indian generic drugmakers will continue. This is facilitated by the growing use of generic substitution as a tool of cost containment globally, as governments seek to curb rising healthcare expenditure. Key risks include the difficulties in ensuring quality manufacturing and medicine pricing pressures.

Headline Expenditure Projections

Pharmaceuticals: INR954bn (USD16bn) in 2014 to INR1,066bn (17bn) by 2015; +11.7% in local currency terms and 7.0% in US dollar terms. Historic data revised down after new data from AIOCD AWACS.

Healthcare: INR5,085bn (USD83bn) in 2014 to INR5,716bn (USD90bn) by 2015; +12.4% in local currency terms and 7.6% in US dollar terms.

Risk/Reward Index

...

To read the full article Register for Free or Login

Power

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 witnessing notable progress in the Indian power market with regards renewable energy expansion, reducing red tape for power projects and improving fuel availability for thermal generation. We believe the government will increasingly turn its attention to reforming the power distribution segment and boosting India's energy independence. Our long-term outlook for the sector is similarly positive as we believe that several fundamental drivers of growth for the sector are beginning to align in India's favour.

We forecast that electricity generation in India will grow by 6.5% in 2015, faster than 5.5% growth that we estimate the sector will have experienced in 2014. Our 2015 forecast can be attributed to the strengthening economic outlook...

To read the full article Register for Free or Login

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...

To read the full article Register for Free or Login

Renewables

India Renewables

BMI View:

BMI View: Our view that power sector reforms would be a top priority for Modi's government is playing out and we have witnessed notable progress in India's renewables expansion. Investor interest in the market is high, the project pipeline continues to swell and rising power consumption and off-grid requirements will ensure the demand for renewable energy technologies remains high.

Modi is a strong supporter of renewable energy and the government - through the Ministry of New Renewable Energy - has scaled up India's 2022 renewables targets dramatically since the 2014 election. In particular, the ambition and high degree of government involvement in the solar sector is helping to drive growth and we view the solar segment as a clear outperformer across the power market. Key Trends And Developments

  • The Ministry of New...

To read the full article Register for Free or Login

Retail

India Retail

BMI View:

BMI View: India is more open to FDI due to Modi's belief that foreign investment will help the economy continue its recent strong growth and move to the next level. As a result, less barriers of entry are opposing foreign retailers looking to enter the potential lucrative market of India, as one of the most promising markets in the world. The improving incomes combined with the second largest population in the world, means a potentially huge market for retailers as household spending will reach USD1,881bn by 2019. There are still limitations to the Indian market, as much of the infrastructure remains poor, and the household income per a capita is still small, while most of the country 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.

...

To read the full article Register for Free or Login

Shipping

India Shipping

BMI View:

BMI View: The primary issue in Indian shipping continues to be the state of the nation's ports. Investment in the 12 major state-run facilities has not kept up with the demand engendered by rapid economic growth experienced in India over the past decade. This is leading to repeated issues of congestion at ports. Investment is now starting to be made, but this may be a case of too little too late. Furthermore, plans to push ahead with the privatisation of the state-run facilities risk mass strikes in the sector in the coming years...

To read the full article Register for Free or Login

Telecommunications

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...

To read the full article Register for Free or Login

Tourism

India Tourism

BMI View:

BMI View: The tourism market in India offers substantial long term growth potential. The domestic travel market is huge, and as population affluence increases we are seeing greater volumes of outbound travel from India to a wide range of global destinations. Inbound travel is also increasing as visa restrictions are reduced and international travel connections are expanded leading to renewed interest from investors, particularly in the hotel sector. As such, we hold a positive outlook for growth in India's tourism industry.

India's tourism sector is relatively well established, attracting visitors from a diverse range of source markets due to its myriad attractions which cover winter sport activities in long mountain ranges, all inclusive beach holiday packages along the extensive coastline and a broad range of historical and cultural attractions in major, and well connected,...

To read the full article Register for Free or Login

Water

India Water

BMI View:

BMI View: Overall, we believe that despite vast amounts of investment in water extraction and production (or recycling), distribution and treatment and sanitation, there is a lot of room for improvement. This is particularly true of water extraction and water reclamation sectors, as demand for water continues to rise off the back of increasing agricultural, industrial and domestic requirements, as the population expands and India becomes more industrialised.

Inadequate access to clean water impacts investors involved water-intensive industries or those with a large labour force. Furthermore, the level of sanitation affects the facilities that are on offer across the country. According to UN estimates, 626mn people practice open defecation, contaminating water supplies and making employees prone to water-borne diseases. However, there is a separate, equally acute problem in built up urban areas...

To read the full article Register for Free or Login

Latest India Articles

  • China's stock market collapse and currency devaluation have revealed the un...

  • Autonomous vehicles will only be gradually introduced to consumers past 202...

  • The Asian consumer will provide an unparalleled opportunity for consumer go...

Latest India Blogs

Latest India Podcasts

  • Multinational pharmaceutical companies face significant declines in re...

  • Central banks across key emerging markets are hiking interest rates in...

  • Several Asian countries are set to see their telecoms industries exper...