INDUSTRY

REPORTS
CURATED BY CONSULTING CLUB CO'21 & LEARNING
RESOURCE CENTRE, INDIAN SCHOOL OF BUSINESS
 Table of Contents

BFSI ... 3

FMCG ... 7

Healthcare & Pharmaceutical ... 12

Manufacturing ... 16

Media ... 21

Retailing ... 25

Telecommunication ... 29

Transportation - Logistics ... 33

 BFSI
Trends Key Drivers Services
•Robust Demand •Ecnomic and demographic drivers •Customer Support
•Rural Banking •Policy Support •Digital Lending
•Growing Digital Transacation •Infrastructure financing •Mobile banking
•Unified Payments Interface •Government Initiatives •Internet Banking Facilities
•Higher ATM Penetration •Shift to Financial Asset Class •Extensions of facilities at ATM stations
•Rising Rural Penetration •Privatise Public Sector Banks (PSU) •Cross-Selling
•Overseas Expansion/Expanding •Merger Execution •Capture latent demand
geographical Presence •Open Banking Ecosystem •Common Service Centres
•Innovation •Housing Finance
•Merger and acquisition •Personal Finance
•Stepped up IT expenditure

Snapshot

•As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-regulated.
The financial and economic conditions in the country are far superior to any other country in the world.
Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have
withstood the global downturn well.
•Indian banking industry has recently witnessed the roll out of innovative banking models like payments
and small finance banks. RBI’s new measures may go a long way in helping the restructuring of the
domestic banking industry.
•The digital payments system in India has evolved the most among 25 countries with India’s Immediate
Payment Service (IMPS) being the only system at level five in the Faster Payments Innovation Index (FPII).
•India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of
existing financial services firms and new entities entering the market. The sector comprises commercial
banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual
funds and other smaller financial entities. The banking regulator has allowed new entities such as
payment banks to be created recently, thereby adding to the type of entities operating in the sector.
However, financial sector in India is predominantly a banking sector with commercial banks accounting
for more than 64% of the total assets held by the financial system.
•The Government of India has introduced several reforms to liberalise, regulate and enhance this industry.
The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to
finance for Micro, Small and Medium Enterprises (MSMEs). These measures include launching Credit
Guarantee Fund Scheme for MSMEs, issuing guideline to banks regarding collateral requirements and
setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by
Government and private sector, India is undoubtedly one of the world's most vibrant capital markets.

•Market Size
•As of March 2021, AUM managed by the mutual funds industry stood at to Rs. 3,142,764 crore (US$
425.87 billion). Inflow in India's mutual fund schemes via systematic investment plan (SIP) were Rs.
96,080 crore (US$ 13.12 billion) in FY21. Equity mutual funds registered a net inflow of Rs. 8.04 trillion
(US$ 114.06 billion) by end of December 2019.
•Another crucial component of India’s financial industry is the insurance industry. Insurance industry has
been expanding at a fast pace. The total first year premium of life insurance companies reached Rs. 2.59
lakh crore (US$ 36.73 billion) in FY20.
•Furthermore, India’s leading bourse, Bombay Stock Exchange (BSE), will set up a joint venture with Ebix
Inc to build a robust insurance distribution network in the country through a new distribution exchange
platform.
•Fund raising from the equity market grew by 116% to Rs. 1.78 lakh crore in Initial public offering (IPOs),
Offer for Sale (OFS) and other market issuances in 2020. In FY20, the number of listed companies on the
NSE and the BSE were 1,795 and 5,377, respectively.

•Source: IBEF, Banking March 2021 & Financial Services -March 2021

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Market Size
•The Indian banks industry grew by 9.1% in 2020 to reach a value of $2,206.3 billion.
•The compound annual growth rate of the industry in the period 2016–20 was 8.9%.
•In 2025, the Indian banks industry is forecast to have a value of $3,477.2 billion, an increase of 57.6%
since 2020.
•The compound annual growth rate of the industry in the period 2020–25 is predicted to be 9.5%.

Trends
•Improved risk management practices - Indian banks are increasingly focussed on adopting
integrated approach to risk management. Banks have already embraced the international banking
supervision accord of Basel II. Most of the banks have put in place the framework for asset-liability
match and credit and derivatives risk management.
•Technological innovations - By 2022, digital assistants, social media and third-party channels are
projected to act as primary channels for banking.
•Focus on financial inclusion - Ministry of Finance, Government of India, launched the Financial
Inclusion Index. This index will measure access, usage and quality to financial services. Department
of Financial Services (DFS), Ministry of Finance and National Informatics Centre (NIC), launched Jan
Dhan Darshak as a part of financial inclusion initiative. It is a mobile app to help people locate
financial services in India.
•Consolidation - With entry of foreign banks, competition in the Indian banking sector has intensified.
Banks are increasingly looking at consolidation to derive greater benefits such as enhanced synergy,
cost take-outs from economies of scale, organisational efficiency and diversification of risks.
•Focus towards Jan Dhan Yojana - The Government of India made Pradhan Mantri Jan Dhan Yojana
(PMJDY) scheme an open-ended scheme and also added more incentives. Key objective of PMJDY is
to increase the accessibility of financial services such as bank accounts, insurance, pension, credit
facilities, etc. mostly to the low-income groups. As of February 27, 2021, the number of bank
accounts opened under the government’s flagship financial inclusion drive ‘Pradhan Mantri Jan Dhan
Yojana (PMJDY)’ reached 41.93 crore and deposits in Jan Dhan bank accounts stood at more than Rs.
1.70 lakh crore (US$ 23.07 billion).
•Wide usability of RTGS, NEFT and IMPS - Real Time Gross Settlement (RTGS) and National Electronic
Funds Transfer (NEFT) are being implemented by Indian banks for fund transaction. Securities
Exchange Board of India (SEBI) has included NEFT & RTGS payment system to the existing list of
methods that a company can use for payment of dividend or other cash benefits to their
shareholders & investors. The number of transactions through immediate payment service (IMPS)
increased to 346.55 million in volume and amounted to Rs. 2.88 trillion (US$ 39.57 billion) in value in
January 2021.
•Know Your Client - RBI mandated the Know Your Customer (KYC) Standards, wherein, all banks are
required to put in place a comprehensive policy framework in order to avoid money laundering
activities.
•Open Market Operations - On February 9, 2020, under open market operations (OMO), Reserve
Bank of India (RBI) announced to buy government securities worth Rs. 20,000 crore (US$ 2.75
billion).
•Source:IBEF, Banking March 2021

Covid Impact
•The COVID-19 outbreak during 2020 has forced many businesses to shut due to lockdowns and
consumers' restrictions.
•This has forced the central banks to cut down interest rates dramatically in order to boost consumer
spending and return the economy to normal.
•This would be achieved by making it easier to borrow money from banks due to the ultra-low
interest rate environment.
•However, this kind of strategy has reduced profit margins and revenues for big banks.
•Even though the lending output has been increased significantly, it is not enough to offset the losses
due to low interest rates, decreasing banks profit margins to a great extent.
•Source: MarketLine Industry Profile; Banks in India - April 2021

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 SWOT Analysis

Strength Weakness Opportunities Threats

• Many of India's leading financial
institutions have been established
for more than a century and the
legislative framework and regulatory
structure are well developed.
• The strength and stability of the
Indian rupee and the market's
growth potential have bolstered
foreign investment in the finance
sector.
• Earnings per share in the stock
market have increased as a result of
buy-back by listed companies.
• A huge potential consumer base with
a fast-growing middle class creates
demand for a range of formal
financial services.
• Public sector banks dominate the banking
sector, but their viability is undermined by
a high level of non-performing loans -
caused in part by the political drive to
appease farmers with loan waivers - and a
low level of non-performing loan
provisioning.
• Debt paper is the largest asset class for
asset management companies, and rapid
downgrades in credit ratings, in some cases
from investment grade to junk status, have
hit fund schemes.
• The cost of expenses in equity funds,
averaging 2%, is hindering growth in small
investment.
• The large number of mutual fund schemes
has caused confusion among retail
investors, deterring investment and
constraining growth.
• Liberalisation of the banking and
• The economy is still heavily affected
insurance sectors is continuing, with a
growing role for private corporations, as by trends in the agricultural sector,
well as divestment of stakes in, and which is 60% rain-fed and heavily
influenced by monsoons.
consolidation of, state-owned
corporations. • Poor weather could fuel food price
• Equities are rising in importance as a inflation and undermine the incomes
target of investment for mutual and of much of the 50% of the
pension funds and this is driving growth population that depends on
in the stock markets. agriculture for an income.
• The government is pressing ahead with • A second wave of the coronavirus
plans to extend banking, insurance and
pandemic in India is causing
retail investment to the wider significant disruption in 2021, risking
population in order to improve
the return to economic growth.
household financial stability and
• Further stock market volatility
stimulate investment. Rural and semi-
urban areas are likely to be a source of remains a source of downside risk.
long-term growth.
• Potential increase in the cap on foreign
investment, up from 49%, would attract
foreign entities.

Source: Fitch Solutions - India Banking & Financial Services Report | Q3 2021.

Category Segmentation Key Players - India

India banks industry category segmentation: $ billion, 2020 India banks industry share: % share, by value, 2020

Category 2020 % Company % Share

Bank Credit 1475.6 66.9% State Bank of India 23.6%
Trading Asset 690.5 31.3% HDFC 7.7%
Cash Assets 31.8 1.4% ICICI 6.3%
Inter-bank Loans 3.1 0.1% Axis 5.0%
Other 5.2 0.2% Other 57.4%
Total 2206.2 99.9% Total 100%
Source: MarketLine Industry Profile; Banks in India - April 2021 Source: MarketLine Industry Profile; Banks in India - April 2021

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 India banks industry value forecast: $ billion, 2020–25

• In 2025, the Indian banks industry is forecast to have a value of $3,477.2 billion, an increase of 57.6% since
2020.
• The compound annual growth rate of the industry in the period 2020–25 is predicted to be 9.5%.

Source: MarketLine Industry Profile; Banks in India - April 2021

Source: Fitch Solutions - India Banking & Financial Services Report | Q3 2021

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 FMCG

Trends Key Drivers Segments

•Sustainability •Demand for complete new product •Personal care

•Digitalization type •Household care
•FMCG e-Commerce •Demand for “green” or “clean” •Packed food and beverages
•Big Data & Analytics products •Healthcare
•Artificial Intelligence •First to market
•Direct Distribution •Compliance with regulation
•Internet of Things (IoT) •Low cost
•Blockchain

Snapshot

•The production of fast-moving consumer goods as indicated by the index of industrial production (IIP)
contracted by 2.3 per cent for the 2020-21 financial year. While the pandemic-led lockdowns dealt a blow
to consumer non-durables during the June 2020 quarter, the index showed a quick turnaround and a
marginal expansion during the September 2020 quarter itself and a steady improvement during the
subsequent two quarters. The consumer non-durables basket closed the March 2021 quarter with a 4.1
per cent growth, the fastest since the June 2019 quarter. But the pace of growth was paltry at best given
that the index benefited from its low base of the year-ago quarter. The IIP had contracted by 7.7 per cent
then.

•The pandemic severely impacted consumption demand as consumers tightened their purse strings and
cut down on unnecessary purchases. The nationwide lockdown during the June 2020 quarter constrained
supplies as factories remained shut and only the movement of essential items was allowed. Come the
September quarter, the phased re-opening of the economy alleviated the problems to an extent, but
demand for discretionary products refused to increase discernibly. Naturally then, the products within the
FMCG basket showed divergent trends during the year. Essentials like drugs and pharmaceuticals
continued to grow, others like detergents and washing powders found traction as these products shielded
or lowered the risk of contracting infections. In contrast, varieties of soft oils that mainly find their usage
in the hospitality sector, alcoholic beverages and paper products were worse off.

•Drugs & pharmaceuticals, which command a significant share in the overall FMCG production, bounced
back to growth as early as May 2020. With more people staying indoors and postponement of elective
surgeries following the coronavirus outbreak, demand for anti-infectives, analgesics and gastro-intestinal
drugs did remain tepid. But the very nature of medicines ensured that demand from chronic therapy
segments and export markets sustained. As a result, APIs and formulations grew by 10.8 per cent and
anti-diabetic drugs recorded a robust 56 per cent growth during the year. The production of anti-cancer
and antihistamine drugs grew by 15.6 per cent and 14.3 per cent, respectively.

•The coronavirus pandemic worked in favour of soaps and hygiene products though. Demand for
disinfectants and cleaning supplies witnessed a turnaround during the pandemic year and production of
both detergent powders and soaps increased during 2020-21 after contracting in the preceding year.
Detergent powders production which had stagnated in 2019-20, inched up by 4.5 per cent during 2020-
21. Toilet soap production grew by 8.6 per cent during 2020-21 after falling by 2.4 per cent in 2019-20.
Washing soap bar production also returned to growth in 2020-21 after declining by 10.6 per cent in the
previous year. However, the demand for personal care products such as hair oils, hair dyes, toothpastes
and topically applied creams continued to remain low for the second consecutive year. Hair oils and dyes
production fell by 8.8 per cent and 2.2 per cent, respectively, while that of toothpastes fell by five per
cent. The production of topically applied creams and lotions stagnated in 2020-21 after falling by 18.5 per
cent in the preceding year.

•Source:Care Ratings, FMCG Production in 2020-21 a mixed bag, May 2021

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Market Size

•Fast moving consumer goods (FMCG) is the fourth largest sector in the Indian economy. There are
three main segments in the sector food and beverages, which accounts for 19% of the sector;
healthcare, which accounts for 31% of the share; and household and personal care, which accounts
for the remaining 50% share. From October 2020 to December 2020, the FMCG market rose 7.1%,
driven by food items, health, hygiene and rural areas. E-commerce is likely to contribute 5% or US$ 4
billion to FMCG sales by 2022.

Trends

•Urban and Rural Trends:

•India’s FMCG sector is categorized into the demographics of urban and rural segments. The urban
areas have always led the growth of FMCG revenues in India. However, semi-urban and rural
consumption has recently witnessed a significant rise such that the rural FMCG market is estimated
to grow up to 220 billion USD by 2025. Furthermore, with 12.2% of the total population living in
villages, rural demands for consumer goods cannot be neglected. In fact, some of the top FMCG
companies, like Dabur, Hindustan Unilever, etc., generate about 35 to 45% of their domestic revenue
from Indian rural markets.

•Increased Digitization: Post the COVID-19 crisis, digitization has been an emerging FMCG trend in
2021 India which has shaped the future of retailing consumer goods. Almost all FMCG brands
partnered with major e-commerce websites, like Flipkart, Groffers, Bigbasket, etc., to deliver
products to consumers. Here too, India’s rural market outperformed the urban consumer demand
and witnessed a 10.6% growth in Q3 2020. In fact, according to a senior executive at Jyothy Labs, the
sales share of e-commerce in the FMCG sector is expected to increase from 2-3% before COVID to
4.5% post-COVID.

•Growth in Food & Beverage and Health & Wellness Categories: The food and beverage segment is
one of the largest contributors to the FMCG sector in India and accounts for almost 30% of the total
household spending in the country. A rise in average income level, increase in the disposable income
of middle-income groups, increasing urbanization, and change in consumer preferences for hygienic
products have driven the growth of this sector. While the per-capita food consumption has been
emerging in the rural sector, the urban market has witnessed increased demands for instant meals
category; Ready to Cook (RTC), Ready to Eat (RTE) are shaping current consumer preferences as well.
Further, the changed consumer behavior towards hygiene and health post the COVID crisis has also
increased the demands for sanitizers, hand wash, disinfectants, wipes, and home cleaning products,
thereby setting a new trend in the FMCG sector.

•Source:Tecnova, Growth Trends in the Indian FMCG Sector

Covid Impact

•COVID 19 has had a mixed impact on Indian fmcg industries with select essential categories within
food and drinks benefiting due to panic buying and stockpiling. These categories are expected to
witness strong demand throughout 2020 as the situation looks uncertain.
•Furthermore, with COVID 19 led increased awareness around immunity, consumers are increasingly
focusing on personal health and hygiene which should benefit sales of home care, personal care and
consumer health products.
•Spending on discretionary products will take the biggest hit due to restrictions on sales of these
products during the lockdown, prolonged by the lasting impact on consumers’ disposable income.

•Source:Euromonitor International, The Impact of Coronavirus on Indian FMCG Industries, May 2020.

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 SWOT Analysis

Strength Weakness Opportunities Threats

• India has a very large domestic
market, and rising domestic
• The Indian middle class remains
demand is a major driver of
economic growth
• India is the second biggest country
in the world in terms of population
• Foreign retailers that are new to
size and will overtake China in 2027.
This large and youthful population
provides a big consumer base for
retailers.
• India has started its vaccination
drive in January 2021, and is
• Infrastructure in India remains
bringing in the private sector to
speed up the programme. The
government targets to vaccinate
300mn people by August 2021,
which represents 22% of its entire
population. A strong vaccination
programme will aid the consumer
recovery story.
relatively small, with only slow
growth projected in income levels
at the upper end of the scale.
the sector must compete with
more established independent
local stores, which have already
built up a certain level of customer
loyalty.
poor, increasing costs for retailers.
Logistics can account for up to
20% of the cost of a product
because of the reliance on road
transport.
• The key demographic for modern
retail - the 20-39 years old group - is
growing fast, presenting significant
opportunities for retailers to expand
and develop brand loyalty.
• Prime Minister Narendra Modi, who
is considered to be pro-business, is
continuing to liberalise the economy,
further facilitating foreign companies'
entry into India's market.
• Investment in technology is expected
to grow in the immediate future,
building the capacity for retail firms
to take advantage and offer high-tech
and modern services to increase their
productivity.
• There are opportunities for retail
development outside the main cities,
particularly in Tier II and Tier III cities.
• The Covid-19 outbreak in 2020 is
expected to hit India hard, as low
wage migrant workers lose their
incomes during the lockdown,
thereby negatively affecting
consumption in the country.
• Ingrained social hierarchy means
that opportunities for social mobility
are not equal, hindering the upwards
social mobility of the low-income
groups.
• Despite the government's efforts,
corruption remains high. If it
continues to be prevalent in Indian
society and its economy, it will incur
costs for retailers and put off
investors.
• Rental rates are high and predicted
to rise in Tier I cities in particular, as
space is limited, which puts more
pressure on retailers' bottom lines.

Source: Fitch Solutions - India Consumer & Retail Report | Q3 2021.

Category Segmentation Top FMCG Companies - India

India food & grocery industry category segmentation: $ billion, 2020 Market Capitalization
Company Name [Latest] (INRmm, Historical
Category 2020 % rate)
PepsiCo, Inc.
Food 497.0 83.9
1,49,98,940.3
Drinks 67.1 11.3
Anheuser-Busch InBev
Tobacco 20.4 3.4 1,10,17,171.0
Household Products 8.1 1.4 Hindustan Unilever
Total 592.6 100% Limited 57,54,668.3
Source: MarketLine Food & Grocery Retail in India – Feb 2021 ITC Limited
25,18,682.1
Avenue Supermarts
Limited 21,38,757.1
Nestlé India Limited
16,87,470.3
Dabur India Limited
10,00,457.3

Source: Capital IQ

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 Digitalisation, Localisation are Shaping FMCG in India

India is in the throes of a devastating second wave, now the country with the second highest number of cases, with a
record high number of infections and complete or partial lockdowns in select states as of April 2021. Three main trends
have emerged from the pandemic which are shaping the consumer market in India – the pivot to e-commerce, a reduced
dependence on exports with a focus on local supply chains, and reverse migration increasing demand from rural areas.
These trends will continue in 2021 and beyond.

Indian economy bounces back before being battered by second wave

From being one of the fastest growing economies prior to the pandemic, India saw one of the largest real GDP declines
globally in Q2 2020, down 25.9% from the previous quarter, due to measures imposed to control the spread of the virus.
Manufacturing facilities were shut down and supply chains disrupted affecting economic output. By May 2020 economic
activities started to resume and by Q3 2020, India saw one of the fastest growth rates, up 23.8% from the previous quarter.
However, given the rise in infections, India’s recovery is now expected to slow.

Despite expected recovery in the employment rate in Q1 2021, consumer confidence remains low due to uncertainty
about the pandemic and an increase in the prices of essential goods such as edible oils, pulses, spices, as well as petrol
and diesel. Electronics and appliances are also expected to get expensive, due to increasing raw material prices.

With the emergence of a much stronger second wave in April 2021, there will be greater demand for hygiene, health and
immunity products and players will continue to focus on immunity and hygiene positioning. And the impact of the three
major trends to emerge out of 2020 – digital, local supply chain and reverse migration – will intensify in 2021. COVID-19
has already brought about drastic changes to consumer lifestyles, and these trends will remain relevant beyond 2021,
even when restrictions are eased.

Companies becoming digitally ready to remain future-proof.

Leading grocery brands in India are leveraging the existing delivery networks of pure play commerce companies like
Amazon, Flipkart or Big Basket to expand their e-commerce service. Further, leading companies like Dabur India Ltd,
Marico Ltd and Emami Ltd have been launching products exclusively for e-commerce, to reach consumers faster. While
partnering with pure play e-commerce companies remains a key strategy, an increasing number of brands are
strengthening last mile connectivity by focusing on direct-to-consumer models which will continue to be relevant in 2021.
Some notable examples include ITC Ltd, PepsiCo and Bisleri India Pvt Ltd.

10
In 2020 e-commerce sales of food and drink saw exponential growth of 80%. With India’s second wave, growth
momentum is only expected to continue with the category expected to grow by a further 60% in 2021. Despite dynamic
growth, e-commerce accounts for less than 10% of overall retail sales in India, showing that the Indian ecommerce space
has yet to explore its full potential. In line with e-commerce, digital payments are growing as a greater number of
consumers look for contactless payment options. India being a mobile first country, scan and pay with wallets and UPI
(Unified Payments Interface) options are emerging as popular alternatives among consumers, given wide acceptance in
traditional retail channels.

With a stronger second wave, COVID-led trends are here to stay.

With the emergence of a much stronger second wave in April 2021, there will be greater demand for hygiene, health and
immunity products and players will continue to focus on immunity and hygiene positioning. And the impact of the three
major trends to emerge out of 2020 – digital, local supply chain and reverse migration – will intensify in 2021. COVID-19
has already brought about drastic changes to consumer lifestyles, and these trends will remain relevant beyond 2021,
even when restrictions are eased.

India on its way to becoming self-reliant with brands going proudly local.

The Indian Prime Minister, Narendra Modi, has announced a special economic package to encourage local manufacturing,
local sourcing, strengthening the local supply chain and finally the consumption of Indian-made products, aiming to make
India self-reliant. There is also a push on selling locally-produced products to international markets, and to position India
as a lucrative country and a serious competitor in the global supply chain. With import restrictions, delays in shipments,
hikes in custom duty and incentives offered by government for setting up factories in 2020, foreign companies are looking
to expand manufacturing in India and looking at India as an export hub. A number of global brands are looking to move
their manufacturing units out of China, and India is emerging as the next lucrative option for them. For instance, BSH
Home Appliances is shifting production of top-loading fully automated washing machines to India, followed by blenders
and refrigerators with bottom-mount freezers.

Source: Euromonitor International, How Digitalisation, localization and reverse migration are shaping FMCG in India, May 2021

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 Healthcare & Pharmaceutical

Trends Key Drivers Segments

•Shift from communicable to •Growing demand •Geographic

lifestyle diseases •Policy support •Demographic
•Expansion to tier ii and tier iii •Focus •Psychographic
cities •M&A •Behavioral
•Emergence of telemedicine
•Rising adoption of AI
•Focus on Universal Immunization
•Technological initiatives

Summary

•India's pharmaceutical sector will remain a key destination for foreign direct investment , and
drugmakers will continue to build their manufacturing presence in the country, aligning themselves
with the government's push to develop the biomedical sector. Key foreign players include
GlaxoSmithKline, Novartis, Sanofi, Abbott Laboratories, Merck Sharp & Dohme and Roche. Vision
2025 aims to expand India’s global leadership and relevance in life sciences while driving domestic
access by becoming the world’s largest and most reliable drug supplier; providing access to
affordable, quality medicines to every Indian; and establishing a globally recognised presence for the
Indian industry in pharmaceutical innovation. Given India's position as an emerging market revenue
growth driver in the Asia-Pacific region, it will continue to attract investment from multinational firms
despite the prevailing risks from the regulatory environment.

•Healthcare Sector

•The Ministry of Health and Family Welfare comprises the Department of Health and Family Welfare,
the Department of Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathy; the Department
of Health Research; and the Department of AIDS Control, each headed by a secretary to the
Government of India. The Ministry of Health and Family Welfare is responsible for the
implementation of national health and family welfare programmes, such as the prevention and
control of major communicable diseases, maternal and child health and family planning, as well as
the promotion of traditional and indigenous systems of medicine. The ministry is also responsible for
the provision of technical assistance to states in the prevention and control of seasonal disease
outbreaks and epidemics.

•One of the central problems is the low levels of public spending on health and, as a result, the poor
access to affordable and good quality healthcare for the majority of India's population. Public health
facilities suffer from poor infrastructure and human resource inadequacies.

•Currently, the private healthcare sector dominates more than 80% of the entire market. Owing to
rising income levels, more and more consumers are demanding access to quality healthcare facilities.
The long-term rise of household incomes will provide a boon for private hospitals, which generate a
substantial amount of their revenue from out-of-pocket payments. Major private healthcare players
anticipate ongoing strong growth within the sector, and we view this as a major driver behind total
healthcare market growth over the coming years. This will also provide a boost to medicine sales
growth in India over the coming years.

•Source: Fitch Solutions, India: Pharmaceuticals & Healthcare Report, Q3,2021.

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Market Size

•The performance of the market is forecast to accelerate, with an anticipated CAGR of 3.5% for the
five-year period 2019-2024, which is expected to drive the market to a value of $38,554.5m by the
end of 2024. Comparatively, the South Korean and Chinese markets will grow with CAGRs of 3.9%
and 7.7% respectively, over the same period, to reach respective values of $23,822.0m and
$206,279.4m in 2024.

Trends

•Emerging Technology Trends in Data Science Technologies in Drug Discovery

•Cloud based Platform: Secure, cost effective and collaborative platform for data hosting and
integration of siloed data, and project management.

•AI/Synthetic Chemistry Retrosynthesis: Fast, accurate & comprehensive chemical space navigation.

•Blockchain Data Sharing: Secure data sharing between pharma companies using blockchain to
improve R&D efficiencies.

•Advanced DL/ML (GANs+RL): DL in general and Generative Adversarial Networks (GANs) in particular
are being increasingly regarded as a “golden standard” of innovation in the pharmaceutical AI space.

•source: Frost & Sullivan: Data Science Impacting the Pharmaceutical Industry Part I: Drug Discovery
Applications, Aug 2020. ,

Covid Impact

•With the COVID-19 pandemic testing even the more developed healthcare systems globally, the
foundations of India’s healthcare system have naturally also been shaken. The overall response to
the pandemic witnessed both the private and government sector working in tandem. The private
Indian healthcare players rose to the occasion and have been providing all the support that the
government needs, such as testing, isolation beds for treatment, medical staff and equipment at
government COVID-19 hospitals and home healthcare.
•The healthcare industry, along with the central and state governments, undertook a robust response
plan to tackle the pandemic by setting up of dedicated COVID-19 hospitals, isolation centres and
tech-enabled mapping of resources. In order to effectively manage the outbreak, the Indian
government also leveraged technology and developed various applications both at the central and
state-levels. The Aarogya Setu mobile app which assisted in syndromic mapping, contact tracing and
self-assessment was widely used throughout the country. Such technology platforms were used to
supplement the response management, which included delivery of essential items in containment
zones, tele-consultations with patients, bed management and real-time monitoring and review by
the authorities.

•Source: KPMG: India’s healthcare sector transformation in the post COVID-19 era ,01st Feb 2021.

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 SWOT Analysis

Strength Weakness Opportunities Threats

•Significant market growth
potential, with a large and
fast-growing population.
•Well-established local
industry, with domestic
players prominent in
manufacturing.
•Sizeable and strong generic
drug market, largely owing
to the low-income
population and government
support.
•Low purchasing power of a
large section of the
population.
•Regulatory system biased in
favour of local drug
producers.
•Reliance on imported active
pharmaceutical ingredients
makes the industry sensitive
to currency fluctuations.
•Inadequate healthcare
coverage and lack of disease
monitoring systems.
•Demand for low-cost drugs.
•Continuing expansion of the
healthcare sector and rising
cost awareness.
•Ageing population and
increasing burden of
chronic diseases to provide
ample long-term
opportunities for
prescription products.
•Government resistance to
aligning patent law fully
with international standards
could deter multinational
sector expansion.
•Increased focus on cost
containment in relation to
services and drugs provided
under the National Health
Insurance Scheme.

Source: Fitch Solutions, India: Pharmaceuticals & Healthcare Report, Q3,2021.

India Healthcare Providers – Market Segmentation Top Pharmaceutical Companies - India

Market Capitalization
Company Name [Latest] (INRmm,
Data type Value Historical rate)
Novartis AG
Measure Billion 1,53,66,797.5
GlaxoSmithKline plc
72,93,495.3
Sun Pharmaceutical
2020 2021 Industries Limited 16,13,001.4
Inpatient care 30.1 33.5 Divi's Laboratories
Outpatient care 49.1 54.6 Limited 11,27,943.5

Long-Term care 2.1 2.4 Dabur India Limited

9,97,893.8
Medical goods 28.9 32.2
Fosun International
Collective services and capital Limited 9,02,902.2
formation 6.9 11.4 Dr. Reddy's
Laboratories Limited 1,53,66,797.5
Source: MarketLine
Source: Capital IQ

14
 Industry - Expenditure Forecast

• Pharmaceuticals: INR2,159.8bn (USD29.1bn) in 2020 to INR2,458.4bn (USD33.4bn) by 2021; +13.8% in local

currency terms and +14.8% in US dollar terms. Forecast revised up from last quarter.
• Healthcare: INR8,286.7bn (USD111.8bn) in 2020 to INR9,406.2bn (USD128.0bn) by 2021; +13.5% in local
currency terms and +14.4% in US dollar terms. Forecast revised down from last quarter.

Key Updates:

• In April 2021, it was reported that India’s healthcare sector is not equipped for the unprecedented rise in Covid-
19 cases, highlighting the continued lack of medical funding to build healthcare infrastructure.
• In April 2021, India’s Ministry of Health and Family Welfare unveiled an upgraded version of its Integrated
Health Information Platform that will track more diseases and collect near real-time disease incidences across
the country.
• In the same month, India banned the export of antiviral drug remdesivir and its active pharmaceutical
ingredients as demand rocketed due to a record surge in Covid-19 infections and led to crippling shortages.
• In April 2021, India announced that it will import Russia's Sputnik V vaccine to cover as many as 125mn people.
• Also in April 2021, approvals were granted to 16 firms to manufacture drugs such as valsartan, losartan,
levofloxacin, sulfadiazine, ciprofloxacin and ofloxacin, among others, under the Production-Linked Incentive
scheme for the domestic pharmaceutical sector.

Source: Fitch Solutions, India: Pharmaceuticals & Healthcare Report, Q3,2021.

15
 Manufacturing

Marketing Key Drivers Services

•Target Audience •Government Initiatives •Customer Demand for
•Customer Needs •Domestic Consumption Personalization
•Drivers •Huge Labour Pool •Technology Adoption
•Purchase Process •International Investment • The Drive To ‘As-a-Service’ Models
•People involved with the purchase •Public Private Partnership (PPT)
•Innovation
•Forward looking

•The sector’s Gross Value Added (GVA) at current prices was estimated at US$ 350.27 billion as per the first
advanced estimate of FY21. The IHS Markit India Manufacturing Purchasing Managers Index (PMI) reached 55.4
in March 2021 from 57.5 in February 2021. The manufacturing GVA accounts for 19% of the country's real gross
value added.
•As per the latest survey, capacity utilisation in India’s manufacturing sector stood at 63.3% in the second quarter
of FY21 and 66.6% in the third quarter of FY21
•India’s textiles industry contributed 7% to the industry output (by value) in 2018-19. The Indian textiles and
apparel industry contributed 2% to the GDP, 12% to export earnings and held 5% of the global trade in textiles
Market and apparel in 2018-19. Exports of textiles stood at US$ 26.08 billion, as of February 2021.
Size
•India’s exports of electronic goods were valued at US$ 11.7 billion in FY21. The smartphone shipments reached
150 million units and 5G smartphone shipments crossed 4 million in 2020, driven by high consumer demand
post-lockdown. The consumer electronics and appliances industry in India is expected to become the fifth
largest in the world by 2025.
•Electronics system market is expected to witness 2.3x demand of its current size (FY19) to reach US$ 160 billion
by FY25.
•Electronics design segment, growing at 20.1%, was 22% of the ESDM market size in FY19; it is anticipated to be
27% of the ESDM market size in FY25.

•In March 2021 the IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) slipped to a seven-month
low of 55.4 from 57.5 in February 2021. Data for April indicates a slight improvement to 55.5 after declining to a
seven-month low in March at 55.4. This marginal increase doesn’t hide the fact that “the headwinds facing
manufacturers cannot be ignored. The surge in COVID-19 cases could dampen demand further when firms’
financials are already susceptible to the hurdle of rising global prices.”

COVID- •As the sector with the maximum amount of backward and forward linkages, manufacturing crucially sustains and
19 propels economic recovery. But restrictions on account of the surge in COVID-19 cases has led to a massive
Impact deceleration in the manufacturing sector. And the worst is yet to come both in terms of the spread of the
coronavirus and the slowdown of manufacturing.

•According to a survey conducted by United Nations Industrial Development Organization (UNIDO), after
lockdown was imposed last year, manufacturing in India had stopped, except for the rice milling sector where
production reportedly dropped by half. In manufacturing, some of the most affected industries have been metals
and chemical products, motor vehicles, machinery and equipment, textiles, etc.

Source:
Indian Textile Industry, Manufacturing and Consumer Electronics Reports by IBEF, Apr 2021;
The Impact of COVID-19 on India’s Manufacturing Sector by Vaishali Basu, The Wire, May 10, 2021;
Why you can’t ignore Marketing for manufacturers by Robin Henery, BigCommerce.Com;
Three Trends Driving Change For Industrial Manufacturers In 2021 by Judy Cubiss, Forbes.Com, Jun 03, 2021

16
 Trends

•Emergence of smart spaces: The most notable trend in the manufacturing industry is the smart spaces -
to leverage a plethora of technology combinations to dynamically coordinate with people and
production processes in a flexible and automated fashion. Advanced manufacturing companies are
implementing new technologies like AI, IoT and Data analytics to drive growth and profitability. 34% of
manufacturers have plans to incorporate IoT technology into their processes, while 32% plan to embed
IoT technology into their products.

•Increasing interest towards emerging technologies like 3D printing: Manufacturers’ shift to 3D

printing to support prototyping, a highly cost-effective way for product designers to test and
troubleshoot new products, is expected to gain ground in 2021, especially in sectors like jewellery-
making, medicine, aviation etc. There has been a gradual shift from conventional manufacturing
techniques to new and emerging technologies that provide higher precision and resolution, thus
speeding up the manufacturing process. This will help manufacturers to produce items on demand,
saving up on warehousing costs thereby increasing the overall efficiency of the sector.

•Focus on skilled human capital: It’s not all tech that is calling for attention, post COVID19, to stay
aligned with the Government’s agenda of being Atmanirbhar, organizations will have to focus on
building skilled human capital equipped for the future. Many state governments have already taken up
the initiative of skilling migrant laborer's to equip people with value-added skills to enhance the
employability factor.

•Export Driven Expansion: As per the India Manufacturing Barometer2020, 80% respondents were
confident of India’s export growth in the next 5 years. Going forward, business leaders expect global
demand to play a major role in expansion of India’s manufacturing industry.

•Motherboard Manufacturing: Electronic motherboards demand in India is expected to grow by over six
folds to reach~US$81.5 billion by 2026,according to Manufacturers’ Association for Information
Technology report. Between FY21 and FY26,India is expected to generate cumulative export revenue of
US$ 101 billion.

•Industrial Internet of Things (IIOT) and Industry 4.0: According to Ericsson's Capturing Business
Opportunities Beyond Mobile Broadband Report,5G industry revenue in India is anticipated at US$
17billion by 2030,with the manufacturing sector being one of the key contributors(US$3.74billion).Smart
manufacturing is expected to boost the 'MakeinIndia’ initiative.

•Advanced Robotics: While stand alone robotic workstations are already commonplace even in Indian
companies, advanced robotics use enhanced senses, dexterity, and intelligence to automate tasks or
work alongside humans.

Source:
Indian Textile Industry, Manufacturing and Consumer Electronics Reports by IBEF, Apr 2021;
Top Trends for Manufacturing in 2021 by Debashish Debsikadar, Manufacturing Today, Jan 01, 2021

17
 SWOT Analysis
Strength
• A vast domestic consumer
market in a population of
1.35 B.
• Rich pool of low-cost
unskilled labour.
• Growing Startup business
culture.
• Large contribution of
MSME to Indian industrial
growth.
• A Large technical and
managerial talent pool.
• Well formulated National
Manufacturing Policy.
• Substantial young
addressable market with
rising disposable incomes
will support demand for
consumer electronics and
spending in the medium-to-
long term.
• Rising levels of adoption of
cheap mobile data services
has underpinned the demand
for smart devices, namely
low-cost smartphones.
• Sustained economic growth
will translate into rising
disposable incomes, which
will mean increased spend
on key electronics segments.
• Digitisation drives from both
the public and private sector
could see elevated demand
for electronics.
Source: Fitch Solutions, India: Consumer Electronic Report, Q3,2021.
Ojha, R. (2021). Indian Manufacturing Sector in the Post Covid-19 Period: A SWOT Cum TOWS Analysis. Industrial
Engineering Journal, 25-30.
Weakness
• Quality of Infrastructure
(Port and IT connectivity
issues)
• Low labour productivity and
rigid labour laws.
• Illegal mining, environment
issues and slow mining
growth.
• Liquidity constraints in the
informal MSME business.
• Covid-19 shocks exacted a
heavy toll on the economy
over 2020-H121.
• Still-low disposable incomes
has skewed demand toward
lower-end devices. The
demand for premium higher-
margin devices, such as LED
TVs and premium
smartphones, remains
relatively low.
• Vendors continue to struggle
in rural areas, where lack of
basic infrastructure.
• The grey market for
electronics remains large,
with illegal products
• The Indian middle class
remains relatively small,
with only slow growth
projected in income levels at
the upper-end of the scale.
18
Opportunities
•Large export market –
Automotive, Healthcare,
Electronics, Pharma &
Textile.
•Gains from resource
extraction efficiency to
support manufacturing.
•US-China trade tiff & Post-
COVID-19 scenario leading
to relocation of
manufacturing factories
•The market has many 'low-
hanging fruit', as the
penetration rates of basic
electronics products,
including PCs,
smartphones and tablets,
remain very low.
•Intensifying infrastructure
drives in the rural regions
of the country will allow
vendors to penetrate into
smaller, less developed
cities in the future.
•Government-led
initiatives, such as the
National Electronics Policy
and 'Make In India' will
continue to drive FDI into
domestic manufacturing
facilities
•Smart city initiatives could
see increased adoption of
Internet of Things (IoT)
solutions.
Threats
•Aggressive Chinese
competition.
•Burgeoning informal
employment in the Post-
COVID-19 period.
•Post – COVID - 19
extinction of many MSME
leading to large firm driven
‘Dual’ structure.
•Non-performing and
bleeding PSUs.
•Covid-related lockdowns
continue to pose downside
risks over the H221 period.
•The demand for notebooks
and desktops continue to
be cannibalized by low-
cost smart devices, the
adoption of which have
accelerated owing to
generous mobile data
allocations offered by
Indian operators.
•Revised labelling
guidelines from the Bureau
of Indian Standards could
hurt the growth of white
box vendors.
•The beginning of high-end
iPhone manufacturing in
India could squeeze
Android smartphone
vendors.
Production Automation Top Manufacturing Companies - India

Market
Capitalization
Company Name
[Latest] (INRmm,
Historical rate)
Larsen & Toubro Limited
(BSE:500510) 2,112,729.8
Adani Enterprises Limited
(BSE:512599) 1,658,893.4
Titan Company Limited
(BSE:500114) 1,580,839.6
Adani Ports and Special
Economic Zone Limited 1,455,302.3
(NSEI:ADANIPORTS)
Siemens Limited
(NSEI:SIEMENS) 721,022.8
InterGlobe Aviation Limited
(NSEI:INDIGO) 663,662.5
Havells India Limited
(NSEI:HAVELLS) 623,785.3
Container Corporation of
India Limited 428,133.5
(NSEI:CONCOR)
Bharat Electronics Limited
(BSE:500049) 416,791.8
Astral Limited
(BSE:532830) 387,241.3

Source: Capital IQ, June 2021

Export Growth

19
 Industrial: Capital Investment to get major push from PLI

Industry Forecast

• The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025. The implementation of the
Goods and Services Tax (GST) will make India a common market with a GDP of US$ 2.5 trillion along with a
population of 1.32 billion people, which will be a big draw for investors. The Indian Cellular and Electronics
Association (ICEA) predicts that India has the potential to scale up its cumulative laptop and tablet
manufacturing capacity to US$ 100 billion by 2025 through policy interventions.
• India is working on major initiatives, to boost its technical textile industry. Owing to the pandemic, the
demand for technical textiles in the form of PPE suits and equipment is on rise. Government is supporting the
sector through funding and machinery sponsoring.
• Top players in the sector are attaining sustainability in their products by manufacturing textiles that use
natural recyclable materials.
• Fueled by strong policy support, huge investments by public and private stakeholders and a spike in demand
for electronic products, the ESDM sector in India is predicted to reach US$ 220 billion by 2025, expanding at
16.1% CAGR between 2019 and 2025.

Source: Consumer Electronics, Manufacturing & Textiles Sector Report by IBEF, April 2021

20
 Media

Trends Key Drivers Segments

•OTT •Rising Income •Television

•Digital Population •Investments •Print
•Online Gaming •Government Inititatives •Films
•App •Digital

Snapshot

•Media is consumed by audiences across demographics and various avenues such as television, films, out-
of-home (OOH), radio, animation, and visual effect (VFX), music, gaming, digital advertising, live events,
filmed entertainment, and print.

•Indian M&E sector is expected to grow at a CAGR of 13.7% to reach US$30.6 billion by 2023.

•The Indian M&E industry is projected to grow at a pace of 14% over the period 2016-2021,
outshining the global average of 4.2% CAGR, with advertising revenue expected to increase at a
compounded Annual Growth Rate (CAGR) of 15.3% during the same period.

• Television is expected to grow at a CAGR of 14.7% over the next five years as both advertisement
and subscription revenues are projected to exhibit strong growth at 14.4% and 14.8% respectively.

• Television, Print and Films are the largest segments constituting nearly 80% of the M&E market.

• In 2020, digital channels of Prasar Bharati across DD and Akashvani have registered more than 100%
growth, clocking over a billion digital views and over 6 billion digital watch minutes.

• The online video streaming platforms may become an INR 4000 crore revenue market by the end of
2025, according to reports.

• The online gaming industry is expected to grow at a compound annual growth rate (CAGR) of 40% to
$2.8 bn by 2022, up from $1.1 bn in 2019.

• The AVGC sector is the fastest-growing sector, rising at a rate of 29% between 2019 and 2024, while
the audiovisual and services sector is expanding at a rate of 25%.

• OTT content investments in India touched $700 mn in 2020.

• India's pay-TV industry will grow at 7% CAGR between 2020-25 as total industry revenues, including
subscription and advertising, reach $12.3 bn by 2025.

•Source:https://www.investindia.gov.in/sector/media

21
Market Size

•According to the ratings firm Crisil, the Indian Media and Entertainment (M&E) sectors 's revenue is
projected to grow at 27% to reach Rs 1.37 lakh crore in FY22 due to acceleration of digital adoption
among users across geographies.
•In FY22, ad revenue is expected to increase by 31% YoY and subscribtion revenue by 24% on back of
anticipated strong economic recovery.
•In Dec 2020, Star disney stated that the media & entertainment sector has the potential to increase
to US $ 100 billion by 2030.

•Source:IBEF, Media and Entertainment, March 2021.

Trends

•Television: Direct to home (DTH) broadcasting account for 37% of the total television subscribers in
India and estimated at Rs 220 billion in FY 21. in FY 20, TV penetration in India stood at 69% driven by
DTH market share of 37% to the total TV market.

•Emerging Stakeholders in Cloud Gaming: Reliance Jio is likely to be one of the initial players in the
Indian cloud gaming industry. The company has partnered with Microsoft to launch, Project Xcloud,
a cloud gaming service in India. According to media reports of March 2021, Microsoft is testing 1080p
streaming resoloution for its Xbox Game pass cloud gaming service.

•Digital and OTT Video: Despite of slowing economy, robust growth in infrastructure and content
suppy allowed the digital segment to post a 26% of increase in FY20, with digital and OTT ads
increasing by 24%. In 2020 paid video in demand subscription increased by 60% YoY due to the rising
number of consumers switching to mobile/tablet /laptop screen for entertainment.

•Regional Language Streaming Service: In Feb 2021, Spotify annoucned to stream songs in 12 Indian
languages (including Hindi) on its Platform. Accoridng to FICCI - EY 2021 Media & Entertainment
Industry report, the share of regional language consumption on OTT platform will cross 50% of the
total time spent by 2025.

•Source:IBEF, Media and Entertainment, March 2021

Covid Impact

•The COVID-19 pandemic, which began in China in late 2019 and has disrupted almost all markets in
2020, has had varying impacts on different segments of the media industry. For programmatic
advertisers like Google and Baidu, more time spent online during lockdowns has been a boon, whilst
many in traditional advertising fear that COVID-19 could be another nail in the coffin.
•The situation for publishers remains fairly consistent, since ecommerce and subscriptions enable
books and newspapers to cater to increased demand from consumers with more free time.
Broadcasters and movie producers have perhaps been the worst-affected. Whilst demand for their
output has gone up, cinemas have ceased to operate as distribution channels throughout the year,
and studios are struggling to produce more content with lockdown restrictions in place.

•Source:MarketLine: Media in India – Oct 2020.

22
 SWOT Analysis

Strength Weakness Opportunities Threats

•M&E is categorised as
“essential services” and
permitted to continue
operation (except
theatres and events)
•Need for escapism, news
and knowledge increases
in times of trouble –
demand for content
expected to remain high.
•Inability to produce •Consolidation –
content (physical Financially stronger
presence critical) brands consolidating
weaker brands.
•High dependence on
•Sharing resources
advertising for revenues.
•Inability to connect with between competitors (co-
ompetition)
and sell to large number
of advertisers and SMEs •Back-office to the world.
(traditional media) •Direct to consumer and
digital community
creation.
•WFH and manpower
optimisation.
•Stressed balance sheets for
smaller players, increasing
credit days due to liquidity
squeeze.
•Supply chain disruptions –
Print distribution.
•Continuity risk – one positive
case in a studio can derail
content production.
•Increased piracy of content.
• Reduced willingness to
spend more on subscription
products can impact price
increases

Source: Excerpted from an EY (Ernst & Young) report.

Category Segmentation Top Media and Entertainment

Companies - India

India media industry category segmentation: $ billion, 2019 Market Capitalization

Category 2020 % Company Name [Latest] (INRmm, Historical
Advertising 11.2 47.5 rate)
Alphabet Inc.
Broadcasting & Cable TV 5.7 24.3 12,35,62,112.5
Publishing 4.4 18.8 Info Edge (India)
Movies & Entertainment 2.2 9.4 6,35,487.6
Total 23.5 100% Sun TV Network
Limited 2,11,354.1
Source: MarketLine: Media in India – Oct 2020
Zee Entertainment
Enterprises Limited 2,07,766.0
Affle (India) Limited
1,17,936.2
PVR Limited
81,727.6
TV18 Broadcast
Limited 74491.2

Source: Capital IQ

23
 Size of Indian Media & Entertainment Industry

Source: KPMG in India’s digital future

24
 Retailing

Marketing Key Drivers Services

•Platform-based businesses •Value •Customer Support
•Direct to Consumer •Convenience •Digital Payment
•Multinational Retailers •Experience •Timely Delivery
•Value Retailers •Choice •After Sale Follow up
•Category Specialists •Privacy and Security
•Independent/Mutuals •Purpose
•National Heroes •Price

Operations

•Informal Retailing continues to account for a considerable share of retailing in terms of value sales,
because of its easy availability and the low prices offered by such retailers. The concept of informal
retailing is popular in India because of the large rural population. Most people in rural areas continue
to live in poor economic conditions, which is why informal retailing is preferred – purely due to the
low prices.
•Opening Hours - Retail opening hours in India tend to vary between rural and urban areas of the
country. As increasing numbers of Indian retailers, especially modern grocery retailers, are expected
to remain open 24 hours a day, as changing lifestyles and more intense and irregular working
schedules are creating demand for 24-hour retailers in the country.
•Physical Retail Landscape - Retailing in India still predominantly takes place in physical stores.
However, retailing practices between urban and rural consumers are vastly different. For urban
consumers, shopping in high streets and shopping centres is a common phenomenon, in both
specialists and department stores. Meanwhile, in rural areas, consumers primarily shop in smaller
stores, which are more focused on product categories than brands.
•Cash and Carry - The presence of cash and carry remains limited in India, with most companies
involved in the channel engaging mainly in business-to-business sales. Cash and carry players position
themselves as inexpensive mass retailers through which businesses can purchase stock in bulk, and
save significant sums of money in the process. Metro Cash & Carry has outlets in Delhi-NCR and
Bangalore, and these continue to cater exclusively for commercial and institutional customers. These
outlets still do not cover business-to-consumer retailing in India.
•Seasonality - Consumer electronics and appliances, apparel and footwear and leisure and personal
goods are the leading consumer durables purchased during the Diwali season sales. Specialist
retailers and e-commerce retailers earn most of their year’s sales during this period.
•Payments and Deliverry - Cash continues to be the primary method of payment at the checkouts of
most retailers in India. This is because most retailers still do not accept cards, as they do not have
card-accepting machines. The preference for cash in India is mainly due to familiarity with this
payment method; hence it has a higher level of comfort and trust. Also, acceptance of cards is still
low in the country, as informal retailing is relatively high, and these retailers continue to prefer cash
to avoid paying taxes.
•Emerging Business Models - Subscription-based retailing was starting to pick up at the end of the
review period. Although still relatively niche, and limited only to urban India, the subscription-based
model for beauty and personal care and consumer health has become quite popular in metropolitan
cities. Apparel specialist retailers and department stores experimented with the “store on wheels”
concept to reach out to consumers in 2020. Some retailers even tied up with residential societies to
display their products, making it convenient for consumers to shop during the pandemic.

25
 Market Size
•Retail industry reached US$ 950 billion in 2018 at CAGR of 13% and is expected to reach US$ 1.1
trillion by 2020. Online retail sales were forecast to grow 31% y-o-y to reach US$ 32.70 billion in
2018. Revenue generated from online retail is projected to reach US$ 60 billion by 2020.
•Revenue of India’s offline retailers, also known as brick and mortar (B&M) retailers, is expected to
increase by Rs. 10,000-12,000 crore (US$ 1.39-2.77 billion) in FY20.
•According to the Ground Zero Series findings of the consulting firm RedSeer, the retail sector is
expected to recover ~80% of pre-Covid revenue (amounting to US$ 780 billion) by end-2020.

Trends
•The acceleration of digital adoption generated winners and losers. Several large retailers saw
significant increases in both e-commerce and total revenue, while mid and small businesses were
largely on the losing end. With the new baseline, it is existential for traditional retailers to act with
urgency and speed to expand their digital footprints.
•Digital-First Retailing - The new heart of any retailer - the digital platform - will be revitalized with
tighter content, community and commerce integration designed to maximize profitability. 2021 will
force retailers to place digital shopping experiences first, as more and more volume shifts to online
channels.
•Data at the Canter - To drive higher profitability, retailers will need to monetize their data on top of
sophisticated CDPs or data platforms. And to refine this asset, retailers will break down data silos
and increase demand for data by democratizing access to that data, enabling the business leaders to
make decisions and enhance end-end business performance.
•Retailers as Platforms - Retailers will focus on creating value by enhancing differentiated
ecosystems which will drive customers' perception of value and increase loyalty. Engagement &
loyalty platforms, Real-time offers and pricing, digital ad platforms, and marketplaces all augment
the customer value proposition of a retailer
•Retail Digital Ecosystem Modernization - Retailers need to unify their ecommerce, supply chain,
data hubs (customer, product, and orders) and machine learning repository, as well as their in-store
technology into a single unified and self-learning ecosystem, which is the backbone to help them
evolve for the future.
•Digital enablement of Stores goes from Important to Existential - The store of the future will have
much greater amount of technology in it – from outdoor displays showing next pick-up times, to
dedicated BOPIS lines, to self-checkout and mobile-based scan and go apps
•Algorithmic Supply Chain - The shift to digital is will pressure test supply chains in terms providing
high degree of customer centricity, operational excellence and digital profitability. High performing
supply chains of the future need to be measurable, connected, agile, pre-emptive and continually
optimizing and leveraging data as an asset
•Contactless everything- Retailers will work to use digital technologies to ensure they are providing
safe, frictionless experiences in-store. Think: contactless returns, curbside, seamless checkout, store
appointment scheduling etc.

Covid Impact
•The current disruption has only accelerated existing trends. Indeed, the pre-pandemic shift can be
easily illustrated in just a few stats. E-commerce retail sales are expected to increase by almost 17
percent (in CAGR terms) between 2010 and 2024.
•The next fastest growing channel (Discounters) will only achieve 3.4 percent growth over that time.
Then consider the fact that, before the pandemic, almost 16 percent of sales were already flowing
through non-store retailing. The shift towards online and digital channels was already well underway.
•The pandemic pushed disruption into hyperdrive. In some markets, consumers were essentially
mandated to limit themselves to online shopping during lockdowns. In-store retailing was put into a
timeout. Some business models thrived while others were nearly choked into a premature demise.

Source:
KPMG Future of Retail, 2021; Indian Retail Industry Analysis by IBEF, May 2021; Trends in Retail Sector-ET-Retail.com,
Dec 2020.

26
 SWOT Analysis

Strength Weakness Opportunities Threats

•Large Domestic Market
•100% FDI in single-brand
retail under the
automatic route
•Strong Online Retail
Segment
•The Indian middle class
remains relatively small.
•Essential goods are still
the bulk of retail
purchases.
•Foreign Retailers must
compete with the
established local
independent stores
•Infrastructure in India
remains poor.
•India's large rural population,
could provide opportunities for
retailers willing to accept the
logistical challenges.
•Opportunities for retail
development outside the main
cities, particularly in Tier II and
Tier III cities
•Online retail sector is
expanding rapidly as internet
connectivity increases.
•Households with a net income
of more than USD5,000 a year
is set to rise.
•Govt. facilitating foreign
companies' entry into India's
market.
•key demographic for modern
retail - the 20-39 years old
group - is growing fast.
•The Impact of COVID-19
affecting consumption in
the country.
•Despite the
government's efforts,
corruption remains high.
•India is struggling to
improve the strength of
its intellectual property
rights, which will affect
the performance of retail
firms looking to build a
strong brand.
•Rental rates are high and
predicted to rise in Tier I
cities, as space is limited,
which puts more
pressure on retailers'
bottom lines.

Source: Fitch Solutions, India: Consumer & Retail Report, Q2,2021.

Key Segments Top Retailing Companies - India

Sales of Retailing by Category
Retail Value RSP excl Sales Tax - INR million - Current - 2020
Category Category Current % CAGR %CAGR Total Revenue [FY
Value Year {Historic} {Forecast} Company Name 2021] (INRmm,
Growth Historical rate)
Reliance Fresh Limited
Store-based Retailing 43,224,942.60 -4.2 6.9 10.7 1,318,003.5
Grocery Retailers 30,130,330.10 6.7 8.8 8.6
Flipkart India Private
Non-Grocery 12,910,602.20 -22.3 3.2 14.7 Limited 345,461.3
Specialists Avenue Supermarts
Non-Store Retailing 3,242,293.70 24.7 33.1 25.1 Limited (NSEI:DMART) 241,430.6
E-Commerce 3,037,227.60 28 36.8 25.7 Cloudtail India Private
Limited 115,377.4
Mixed Retailers 184,010.20 -32 2.6 21.1
Direct Selling 140,101.40 -8 5.3 10.8 Lifestyle International
Pvt Ltd. 92,333.8
Home shopping 64,964.70 -13 13.4 18.3
Off-price Retailing 16,866.90 -28 15.1 - Source: Capital IQ
Luxury Retailing 15,594.90 -30.3 -3.1 -
Vending - - - -
Source: Euromonitor

27
 Scope for Expansion
FY2021F, 7%
FY2019, 3%

FY2021F, 18% FY2019, 88%

FY2019, 9%

FY2021F, 75%

Traditional Retail Organised Retail e-Commerce

• In FY19, traditional retail, organised retail and E-commerce segments accounted for 88%, 9% and 3%
of the market, respectively.
• The organised retail market in India is growing at a CAGR of 20-25% per year.
• The unorganised retail sector in India has a huge untapped potential for adopting digital mode of
payments as 63% of the retailers are interested in using digital payments like mobile and card
payments.
• Many fintech companies are competing for their presence in local stores. In May 2020, Paytm
announced a US$ 1 billion loyalty programme and launched online ledger services for kirana stores in
India. Other fintech companies such as PayNearby, Phonepe, BharatPe and Mswipe introduced
different services for small shop owners, enabling better digital payments and delivery options at
these stores.
• For example, Amazon partnered with local stores to provide a platform for many small shops and
merchants on its Amazon marketplace. While, Walmart has its own network of 28 ‘best-priced’ stores
serving local stores across the country.
• In March 2021, Big Bazaar announced expansion into the instant home delivery service, aiming to
offer 2-hour delivery guarantee service; it has started the service in Delhi NCR, Mumbai, and
Bengaluru.
Source: IBEF

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 Telecommunication

Trends Key Drivers Segments

•Green telecom •Economic Cycles •Mobile (wireless)

•Expansion to rural market •Consumer Demand and Changing •Fixed Line
•Emergence of BWA technologies Mindset •Internet services
•Commercial SMS traffic •Technological Innovation &
•Internet of Things (IoT) Business Intelligence
•Public Wi-Fi Networks •Regulatory Approach

Summary

• Telecommunication Operators are focusing on extracting greater value from existing subscriptions as
well as on improving network service quality and deepening their content strategy in order to retain
subscribers. Partnerships, such as the one between Airtel and Amazon announced in January 2021 to
sell over-the-top (OTT)-focused prepaid plans, signal a new paradigm, where telcos work together
with OTT providers to develop new content-focused products and services. This is especially
important as the existing bundling model, whereby OTT services are offered for free, is increasingly
becoming commoditised and will eventually become unsustainable for OTT players. Plans to shut off
3G services will also go a way in improving 4G service quality. However, the 3G shutoff may be
delayed if operators struggle to convince consumers - who have been hard hit by economic pressures
from the Covid-19 pandemic - to migrate to 4G-compatible handsets. Many Indian mobile users are
low-value prepaid customers who do not take out contracts, and subsidising the upgrade of handsets
might be financially unviable if operators are unable to secure recurring revenue from them.

•Industry Developments:

•The mobile market recorded net subscriber gains of 7.87mn in the quarter ending September 2020.
This brings the market to roughly 1.149bn mobile subscribers, suggesting growth of -2.1% y-o-y and
0.7% q-o-q. We maintain that growth opportunities in the Indian mobile market remain strong, and
that fluctuations in growth are largely a result of deactivations of inactive prepaid SIMs. The market
has also contracted, with big mobile players exiting the market following a wave of market
consolidation, the decommissioning of code-division multiple access (CDMA) networks, as well as
lapses of spectrum rights.

•In March 2021, the Telecoms Regulatory Authority of India (TRAI) raised INR771.4bn (USD10.62bn) in
an auction which saw spectrum in the 800MHz, 900MHz, 1,800MHz, 2,100MHz and 2,300MHz bands
allocated to the country's three principal mobile operators. Reliance Jio acquired 488.35MHz across
the all the spectrum bands for a purported INR571.2bn, while Airtel and Vodafone Idea bid
INR187.0bn and INR19.93bn respectively for 355.45MHz and 11.80MHz of spectrum. No other
auction specifics were disclosed by TRAI or the operators. All operators avoided bidding for spectrum
in the 700MHz band, citing high reserve prices.

•India's mobile market and its lofty 5G ambitions could be a victim of rising tensions with China, as the
potential ban on 5G gear made by Huawei and ZTE in all Indian mobile networks could raise costs for
operators and delay its roll-out. This could add further downside pressure on our already bearish
forecasts for 5G in India. We only expect uptake to take off in the medium term when operators have
sufficiently monetised their 4G networks, and when the ecosystem of 5G devices becomes more
affordable. By the end of 2030, we forecast 611.97mn 5G subscriptions, accounting for 44.7% of the
market at that time.

•Source: Fitch Solutions, India: Telecommunications Report, Q2, 2021.

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Market Size
•The Indian telecommunication services market experienced volatile growth during the historic
period, fluctuating between -27.9% and 22.6%. The market is expected to be more stable over the
forecast period and grow strongly.
•Market consumption volume increased with a CAGR of 3.9% between 2015 and 2019, to reach a
total of 1,209 million users in 2019. The market's volume is expected to rise to 1,684.3 million users
by the end of 2024, representing a CAGR of 6.9% for the 2019-2024 period.

•Source: MarketLIne, Telecommunication Services in India, June, 2020

Trends

•Green telecom
•The green telecom concept is aimed at reducing carbon footprint of the telecom industry through
lower energy consumption.
•The Government proposed a joint task force between Ministry of New and Renewable Energy
(MNRE) and Department of Telecommunication to promote green technology in the sector.

•Expansion to rural market

•Over 62,443 uncovered villages in India will be provided with village telephone facility with subsidy
support from the government’s Universal Service Obligation Fund (thereby increasing rural tele-
density).
•Broadband service provider, Excitel, plans to raise Rs. 200 crore (US$ 28.37 million) in funding as it
plans to expand FTTH (fibre to the home) deployment on its network and establish presence in 50
cities by December 2021.

•Emergence of BWA technologies

•BWA technologies, such as WiMAX and LTE, is among the most recent and significant developments
in wireless communication.
•Bharti Airtel VoLTE and Reliance Jio 4G services are live across all the 22 telecom circles since 2019.
•India is expected to be the second-largest market in 5G services followed by China in the next 10
years.

•Source:IBEF, Telecommunications, March 2021

Covid Impact
•Telecom as an industry has been impacted by the pandemic, but to a lesser extent than other
industries. While telecom has always been “essential,” COVID-19 brings that truth into the light. The
coming of a new generation of mobile technology—5G NR—brings with it a myriad of growth
opportunities that have been anticipated for the last eight or so years since work on 5G began.
• For most CSPs, the consumer market is their largest. Initial offerings in 5G NR will mirror existing 4G
LTE offers while promoting the greater capacity and speed of 5G. As 5G will require new devices,
such as new smartphones, one growth opportunity comes from marketing new devices with the 5G
service. The initial focus may be technophiles, but as other consumers look to update their existing
4G LTE device, new 5G devices are a natural upgrade path. In the short term, the pandemic will
impact the discretionary budgets of many consumers, which will slow the transition from 4G LTE
devices and service to 5G NR. In the longer term, this transition will still happen, and the impact will
be minimal. 5G NR subscriptions are projected to make up approximately 29% of the world’s 8.9
billion mobile subscriptions in 2025, while 4G LTE makes up approximately 54%.

•Source: Frost & Sullivan: COVID-19 Impacts on Telecom and 5G, June 2020.

30
 SWOT Analysis
Strength
•The mobile market still has
room for further growth
and a healthy degree of
competition, particularly in
rural regions.
•The mobile market hosts
several strategic investors,
including Vodafone, Bharti,
Reliance Industries, and
more recently, US tech
majors such as Facebook
and Google.
•Demand for mobile value-
added services (VAS) is
strong and expected to
grow.
•Relaxing spectrum cap rules
in India is positive for the
ongoing wave of
consolidation within the
industry.
Source: Fitch Solutions, India: Telecommunications Report, Q2, 2021.
Industry Overview – Turnover 2004-2024
Source: Euromonitor International: May 2020
Weakness
•Ongoing dispute regarding
the definition of adjusted
gross revenues highlights
the government's reliance
on the sector for revenues,
and continues to impede
investor confidence.
•Mobile market is still highly
skewed towards prepaid
users, with a significant
portion considered to be
inactive, which contributes
to a declining mobile
average revenue per user
(ARPU).
•Regulatory framework has
been under intense
spotlight amid corruption
and mismanagement
scandals, affecting investor
confidence.
31
Opportunities
•Leading operators are
actively deploying
multimedia content
services, providing
opportunities for content
providers
•Aggressive price cuts for 2G
and 4G mobile data have
encouraged more
consumers to use premium
nonvoice services.
•With a large number of
small operators in the
market, there is
considerable scope for
industry consolidation.
•Launch of IPTV services by
major operators could
stimulate demand for
broadband services..
Top Telecommunication Services- India
Company Name
Bharti Airtel Limited
Indus Towers Limited
Tata Communications
Limited
Vodafone Idea Limited
HFCL Limited
Tata Teleservices
(Maharashtra)
RailTel Corporation of
India Limited
Source: Capital IQ
Threats
•Network capacity,
particularly in the mobile
market, is not keeping pace
with demand, leading to
poor service quality.
• Fluid regulatory and
business environment will
continue to impede future
investments.
•Fixed-line sector may
decline at a more rapid rate
than envisaged, with
potentially negative
consequences for ADSL
growth.
Market Capitalization
[Latest] (INRmm,
Historical rate)
29,36,531.2
6,58,761.7
3,67,418.8
3,04,604.3
83,101.7
76,733.2
47,371.9
 Industry Forecast

The outlook for the Indian telecoms sector is ameliorating, with operators reporting improving financial
performance in 2020. Operators are looking at improving pricing and increasing value from existing subscribers,
rather than gaining new customers. Significant spending in the March 2021 spectrum auction also highlights the
fact that operators are focusing strongly on improving service quality and delivery, rather than on a price-led
strategy. However, the reinvigorated push into fibre-to-the-home services will unlikely reach significant scale,
given that a majority of Indian households are in the low-income bracket and thus use low-cost mobile services.

Latest Updates:

• 10-year forecast period to cover the 2021-2030 period. We believe that, by the end of 2030, mobile
subscriptions will reach 1.368bn, equating to mobile penetration rates of close to 91.0%. Operator
efforts to obtain new spectrum to provide 4G services as well as a focus on low-cost 4G featurephones
and smartphones underpins our optimistic forecasts. Government-led manufacturing initiatives,
namely 'Make in India', could further improve the affordability of handsets.
• 5G forecasts for India are predicated on the possibility that services will be commercialised in 2022,
although it is unclear whether 5G licenses and spectrum will be allocated in 2021. However, given the
strong potential for operators to monetise their 4G networks, we do not expect 5G to be a strong
opportunity in the near term, with investments and uptake only set to accelerate in the medium term.
Rising tensions between India and China could also see Chinese vendors Huawei and ZTE being banned
from the market, which could needless increase capital expenditures for Indian operators as they would
then need to rely on costlier European vendors. By the end of our forecast period in 2030, we expect
about 611.97mn 5G connections, accounting for about 44% of the market.
• The wireline voice telephony market continues to decline due to mobile substitution and the closure of
ageing wireless local loop (WLL) networks. This hampers the development of the wireline broadband
market, although metropolitan areas are benefiting from FTTx rollout, supported by value-added
services such as VoIP and IPTV. Voice accesses will number 16.61mn by the end of 2030, down
considerably from a forecast 20.65mn connections at the end of 2021.
• In the near term, the expansion of wireline broadband networks will be hampered by lack of investment
in infrastructure and low consumer discretionary spending power. On the flipside, we see the
introduction of fibre services, and a keen focus on bundling from the private operators will likely
reinvigorate growth in the market. The dedicated mobile broadband market will see negative growth
as consumers increasingly move toward voice-and-data plans, used on smartphones. By the end of
2030, we expect to see a total of 58.69mn broadband subscriptions, of which 28.08mn are forecast to
be fixed connections.

Source: Fitch Solutions, India: Telecommunications Report, Q2, 2021.

32
 Transportation – Logistics

Trends Key Drivers Segments

•Blockchain •Demographics and urbanization •Freight Transportation

•Data Analytics •E-commerce expansion and •Warehousing and Value added
•Internet of Things (IoT) growth services
•Digital Platform •Trade policy •Freight Forwarding
•Augmented Reality •Connectivity through •Courier, Express and Parcel
•Robotics infrastructure
•Business Model •Supply chain resiliency

Summary

•Advancements in digital technologies, changing consumer preferences, and shift in service-sourcing

strategies are expected to lead the transformation of the Indian logistics ecosystem:

•Air Freight
• Freight traffic at airports in India has the potential to reach 6 million tonnes by FY2024.
•Freight traffic at airports in India has the potential to reach 6 million tonnes by FY2024.

•Ocean Freight
•India’s cargo traffic, managed by ports, is expected to reach 1,461.2 million tons by 2021–2022 (according
to a study by the committee on National Transport Policy).
•Indian ports handled a cargo traffic of 1,236.3 million tons in 2019. Traffic in major ports is forecast to
grow at a CAGR of 2.9% and at 9.2% in non-major ports between 2019 and 2025.

•3PL
•The market was valued at $20.51 billion in 2019 and is forecast to grow at a CAGR of 16% between 2019
and 2025.
•The Third party Logistics (3PL) market is fueled by the eCommerce boom in the market, leading to an
increase in logistics outsourcing, which is supported by favorable government reforms and initiatives.

•Road Freight
•Road freight traffic volume stood at 2,894.1 billion tons km in 2019 and is forecast to grow at a CAGR of 9%
between 2019 and 2025.
•With 100% Foreign Direct Investment (FDI) in the road sector, many global firms have partnered with
Indian participants to capitalize on the growth potential.

•Cold Chain
•India is among the world’s leading food manufacturers and is one of the top-5 countries for key
perishables. The extent of waste across the value chain of key perishables is a major challenge faced by the
Indian food processing industry.
•Wholesalers accounting for almost 70% to 75% of the market are driving the growth in this segment.

•Warehousing
•GST implementation, grant of infrastructure status to logistics, largescale institutional investments, and
the ‘Make in India’ campaign are the major growth drivers for this segment.
•There is a multi-model logistics parks policy, under which the identified 35 logistics parks will cater to key
production and consumption centers, accounting for 50% of India's road freight.

•source: Frost & Sullivan: Indian Logistics Industry Outlook, 2020,

33
Market Size

•The logistics market in India is forecasted to grow at a CAGR of 10.5% between 2019 and 2025.
•Total warehousing space supply is estimated to double by 2022.
•Multi-modal Logistics Parks Policy, India, 2019.

Govt. Regulations
•Grant of Infrastructure Status to logistics, introduction of E-Way bill, and GST implementation are set
to streamline the logistics sector in India.

•GST, an Efficient Taxation System

•Reduced transportation time: There has been a significant decrease (18%–20%) in the turnaround
time since GST implementation due to reduced scrutiny of goods and indirect tax compliance.
•Warehouse consolidation: With the implementation of GST, the number of warehouses has started
declining, as companies do not have to setup warehouses in different states to save tax.
•Increase in tax base: GST implementation is increasing the tax compliance by the unorganized sector.
• GST tax rates: Pre-GST, indirect taxes were up to 26.5%, while GST rates for logistics typically range
between 5% and 12%.

•E-way Bill
• Saving tax evasion: For consignments whose value exceeds INR 50,000, E-Way bills are needed. The
movement of goods without an E-Way bill has legal consequences which limits tax avoidance, as
shippers need to have the necessary documentation for transiting within the nation.
•Reduction in compliance burden: With the introduction of the E-Way bill, a single bill is sufficient for
the movement of goods through several states.

•Infrastructure Status
• The logistics sector was granted infrastructure status in November 2017, with a focus on reducing
the overall logistics cost. The measures include setting up of multi-modal logistics parks comprising
ICDs, cold chain facilities, and warehousing facilities with minimum investment and area size.

•source: Frost & Sullivan: Indian Logistics Industry Outlook, 2020,

Covid Impact
•India’s transport and storage industry contracted sharply, affected by strict lockdown restrictions and
other impacts of the COVID-19 pandemic. Due to restrictions on cross-border movement, supply
chains were disrupted and the availability of drivers was affected, leading to revenue contraction in
the logistics industry. Water and rail freight traffic was also negatively impacted by the
macroeconomic slowdown, with the sharpest contraction among the industry’s segments, as freight
volumes saw a substantial drop.
•In addition, transportation companies faced increased costs, as regular sanitisation and protective
gear had to be ensured.
•Over the forecast period of 2020-2025, the industry is anticipated to see strong growth, and return
to pre-pandemic turnover in 2021. Transport and storage industry growth is predicted to be driven
by the expansion of e-commerce and companies’ adoption of technology. Additionally, online direct-
to-consumer (D2C) businesses are anticipated to witness accelerated growth, initiated by the
pandemic, leading to logistics growth.

•Source: Euromonitor International, Transport and Storage in India, March 2021.

34
 SWOT Analysis

Strength Weakness Opportunities Threats

•India is an emerging
economy with a large
population, plentiful natural
resources and strong
growthprospects.
•Strong labour force with
growing domestic consumer
base.
•India's major ports and
lengthy road and rail
networks boost supply
chain access.
•Growing services sector and
outsourcing hubs.
•Red tape, bureaucracy and
corruption limit freight
transport potential.
•The country has a
significant deficit in
transport infrastructure
investment
•India’s second wave of
Covid-19 infections has
derailed the country’s
economic recovery and
trade prospects.
•India runs chronic trade and
fiscal deficits, both of which
are likely to persist.
•Prime Minister Narendra
Modi's Make in India
campaign is likely to boost
exports.
•India's ports are set to play
a bigger role as a
transhipment hub for the
region.
•India's emerging middle
class will continue to drive
demand for new goods and
services.
•Strong growth in the
country's steel industry is
boosting demand for coal,
iron ore and crude steel
imports and exports.
•The country's ports are
struggling to cope with
demand owing to a lag in
development.
•Government plans to
privatise the major state-
run ports could result in
large strikes.
•Slowing global economic
growth to pose headwinds
to India's Make in India
campaign through
•Exports growth will be
hampered by the Covid-19
outbreak’s impact on
production lines, suitably
skilled labour availability,
and vaccine export
restrictions.

Source: Fitch Solutions, India: Freight Transport & Shipping Report, Q3,2021.

Transportation & Logistic Deals Top Transportation Companies - India

Market Capitalization
Company Name [Latest] (INRmm,
Historical rate)
Siemens
Aktiengesellschaft 9672635.1
BP p.l.c.
6733002
Sumitomo Mitsui
Financial Group, Inc. 3596129.9
ITOCHU Corporation
3265266
Maruti Suzuki India
Limited 2225708.4
Larsen & Toubro 2105768.4
Limited
Deutsche Bank 1994199
Aktiengesellschaft
Source: PWC, Transportation and Logistics deal Insights: 2021 midyear Outlook
Source: Capital IQ

35
 Industry Forecast

Trade will rebound strongly in 2021, despite significant downside risks posed from the second wave of Covid-19.
Imports will grow faster than exports, having been more significantly constrained by lockdown measures
enforced during 2020. We forecast real trade growth of 15.0% in 2021, from an estimated contraction of 11.7%
in 2020.

Key Updates:

• Trade volumes will rebound by 15.0% in 2021 on the back of improved domestic and global economic
conditions. The lingering economic fallout from the second wave of Covid-19 presents significant downside risks
to trade volumes. Fitch Solutions expect India’s Covid-19 resurgence to cap its economic rebound in FY22 (April
2021 to March 2022) and have revised forecast for FY22 real GDP growth to 9.0%, from 9.5% previously,
following a 7.3% contraction in FY21.

• Furthermore, slow Covid-19 vaccination progress in India, particularly amid the emergence of increasingly
virulent mutant strains of the coronavirus, will also weigh on business confidence, given that India’s second wave
of infections has exposed the country’s weakness in healthcare infrastructure and ability to quickly arrest a
domestic outbreak.

• Exports will be boosted by stronger global economic growth, which will increase demand for Indian
manufactured products including refined fuels, vehicles and machinery. We forecast exports to grow by 12.0%
in real terms in 2021, from a contraction of 7.0% in 2020.

• Imports of fuel, vehicles, capital equipment and consumer products into India will all grow strongly in 2021 as
domestic lockdown measures are eased and the economy recovers. That said, the second wave of Covid-19 and
the associated restrictions imposed by the government to contain the virus poses a major downside risk to our
forecast of 18.0% real growth in imports.

Source: Fitch Solutions, India: Freight Transport & Shipping Report, Q3,2021.

36