Top Six Sectors in India Displaying Steady Growth

The Indian economic landscape is undergoing rapid evolution, fueled by remarkable growth across several key sectors. From the technological innovations in the IT sector to significant advancements in healthcare, the expanding FMCG market, the growing focus on sustainability in renewable energy, the infrastructure boom, and the digital transformation in FinTech, the mentioned sectors in India are displaying consistent growth.

According to the Asian Development Bank, the Indian economy is projected to grow by approximately 8% in the next 5-6 years. This growth is supported by increasing public investment in infrastructure and a rise in private sector investment. Nevertheless, global headwinds such as geopolitical situation, post-pandemic spillovers and supply chain disruptions continue to remain a concern.

Fastest Growing Sectors in India

The Indian economic landscape, which the Government of India claims will become the third-largest economy in the world with a GDP of $5 trillion, is undergoing rapid evolution, fueled by remarkable growth across several key sectors such as:

IT Sector: The IT tech business has flourished, with a notable focus on Artificial Intelligence, Data Analytics, Data Science, and Big Data. Nearly 130 Indian IT startups have achieved the”Unicorn” status, indicating their valuation exceeds $1 billion. The sector’s performance, as reflected by the Nifty IT Index, has been remarkable.

Healthcare Sector: The sector has a bright future, with projections indicating significant growth. The hospital sector, a major component of the healthcare industry, is expected to see substantial expansion. The government allocated Rs 89,155 crore (US$ 10.76 billion) to the Ministry of Health and Family Welfare (MoHFW) in the Union Budget 2023-24, and there is also a plan in place to introduce a credit incentive programme worth Rs 500 billion (US$ 6.8 billion) to boost the country’s healthcare infrastructure.

FMCG Sector: Driven by personal care and household items, the industry is among India’s fastest-growing. Elements such as accessibility, lifestyle changes, and increased digital connectivity have influenced the sector’s development, with e-commerce platforms playing a significant role in boosting sales. NielsenIQ projections have suggested that the fast-moving consumer goods (FMCG) sector is expected to grow at 4.5-6.5% in 2024. However, this rate is slower compared to the the robust 9.3% growth experienced in 2023 and 8.4% in 2022 most likely due to the rush of consumers turning to e-commerce sites experienced during the pandemic during the pandemic.

Renewable Energy Sector: Reducing carbon emissions has made renewable energy an attractive investment. India has significantly invested in this sector, resulting in increased installed capacity. The government’s support, including budget allocations, underscores the sector’s growth potential. Is statistics were to be quoted, the Indian Government allocated Rs 19,500 crore, which amounts to US$ 2.57 billion, for a PLI scheme to boost manufacturing of high-efficiency solar modules in the Union Budget 2022-23. Additionally, India launched the Mission Innovation CleanTech Exchange, a global initiative to help accelerate clean energy innovation. Further, as of 2021, Indian ranked fourth on the global scale in wind power capacity and solar power capacity, as well as in renewable energy installed capacity.

Infrastructure Sector: A key driver of any country’s economic growth, encompassing a wide range of projects. This sector is poised for long-term growth, supported by government initiatives and the Make in India campaign. The Government of India also is betting on this sector with 3.3% of GDP allocation to the infrastructure sector in the fiscal year 2024, with particular focus on the transport and logistics segments. While roads and highways account for the highest share, railways and urban public transport comes next.

Fintech Sector: This sector has seen remarkable growth, accelerated by the need for digital financial solutions. India is one of the fastest growing fintech markets in the world with the Unified Payments Interface (UPI) truly emerging as the game changer. With Indians having made 13 crore number of digital transactions, value of digital payment transactions done through UPI having crossed Rs 139 lakh crore, and 17 indigenous fintech unicorns, India as a country is well poised to reach a market size of 150 billion dollars by 2025.

(With inputs from IBEF)