Sectors of the Indian economy with high growth potential

Some promising sectors of the Indian
economy with high growth potential are
discussed below:
1. Engineering
The engineering sector has remained a
high potential business, which has played
a crucial role in boosting the economy
and supporting the growth of other key
sectors of the economy. It contributes
almost 8 percent to the annual GDP. India
is the largest exporter of machinery and
other engineering products in the third
world countries. India competes
successfully in the global capital goods
market, catering to the needs of steel
plants, power plants, cement,
petrochemical units as well as mining. It
also exports farm equipment, such as
tractors and harvesters, construction
machinery, passenger cars, electrics,
electronics and pollution control
equipment.
2. Transportation
The transportation industry is an
evergreen sector in India, with very large
potential for growth. This sector
comprises roadways, ports, super
highways, rail as well as aviation. It is a
high growth sector contributing to 8.5%
of GDP. This sector has unique
opportunities of foreign investments in
highway construction and management
but is also bogged down by issues of
land acquisition and environmental
clearances. Aviation too has good
potential under new FDI norms. Railways
are yet to open up for private investment,
but will offer tremendous opportunities as
and when it gets restrictions are lifted.
3. InfoTech Industry
The Infosys Auditorium
India’s strength in the Information
technology sector is based on the
development of sophisticated knowledge
base and competence of specially trained
professionals. The industry constitutes
the export driven IT services sector and
business process outsourcing. The IT and
ITES companies contribute substantially to
Indian GDP growth. It has been the prime
mover of the services sector in India,
which in turn contributes to the extent of
almost 60% of the GDP. The city of
Bangalore (now called Bengaluru) is the
IT capital of India. The industry accounts
for almost 25% of the total exports from
India. It has grown at an exponential
velocity and has led to accelerated
development of metropolitan cities
spurring the growth of other sectors. This
has continued to be the most preferred
sector of global investors. This sector will
be the immediate beneficiary of the
current global recovery.
Today an increasing number of equity
diversified mutual funds are seen favoring
technology companies and telecom firms,
among the sensitivity index stocks, as the
IT sector benefits from a rupee stabilized
at a lower level and there is an increasing
demand for IT services from US and the
other developed economies.
4. Banking and Insurance
The banking sector in India has witnessed
a vast growth, supported by sizeable
investments in IT and diversification of
innovative service offerings. The banking
sector index has increased at a
compounded rate of over 10-12 percent
per annum since the year 2001. Mutual
funds of this sector have given a return of
9 to 12% over last 3 years. As and when
public sector banks are privatized the
value discovery process could result in
gains for investors.
India’s life insurance business ranks fifth
among the largest global markets. The
sector has been growing at rates
exceeding 20%. The nonlife insurance
Industry has grown at rate of 15%. The
insurance sector opened up to private
investors in last few years and the market
is getting competitive with the entry of
global players. Overall this strengthens
the risk management capability of the
economy.
5. Real estate
With ever growing demand for housing
and commercial space, Indian real estate
has emerged as one of the fastest
growing sectors of the emerging markets.
It has attracted significant participation of
foreign investors. Real estate has been
contributing as much as 13% of the
country’s GDP. Rapid corporatization has
helped it to attract funds from the capital
market. Rapid urbanization has helped the
sector to grow.
6 Retailing business
From the present market size of US$ 500
billion, the Indian retailing trade is
expected to reach US$ 1.3 trillion by the
end of 2020, as per the report of Ministry
of food and consumer affairs in India.
The opportunity has attracted significant
investments from global players. India’s
rapidly growing urbanization has
contributed to the growth of the organized
retailing in the country. The retail industry
is the backbone of growth of the economy
with over 20% contribution towards the
national GDP. The Indian retail sector is
ranked among the top five global retail
markets.
Non conventional sectors like Education
and Training, Entertainment and media, as
well as Telecom and Pharma sectors also
have very good growth potential.