INDIA’S GROWTH PROJECTIONS, POLICY PUSH
India has seen a calibrated opening-up of the economy and a healthy recovery in economic growth and corporate earnings in 2022. By the government’s own estimates, it is set to grow by 9.2% in 2022. The Budget has increased India’s capital expenditure this year by 35% to INR 7.5 lakh crore, most of which is likely to be spent on critical connectivity projects and infrastructure, creating opportunities for Swedish companies to help India modernize its key infrastructure sectors. The government’s thrust on infrastructure is also evident from the announcement last year of the $1.4 trillion National Infrastructure Pipeline called the PM’s Gati Shakti Scheme.
EASE OF DOING BUSINESS, SECTOR FOCUS
The post-covid recovery in India has been led by sectors such as digital infrastructure, services, healthcare, metallurgy and construction.
To improve the ease of doing business, the government has eliminated 75,000 compliances and 1,486 union laws have been removed, the voluntary exits for corporates have been cut down from 2 years to 6 months and Special Economic Zones have been replaced with new legislation. The government’s budget promises an intent to strengthen India’s social infrastructure with an increase in the outlay for the National Health Mission by 8% and by 28% for the National Education Mission. Both these policies enable growth of India’s HealthTech sector and EducationTech sector, areas where Sweden is already a major stakeholder.
There is huge potential for investment in India, given its untapped rural economy, infrastructure, and industry production, along with its IT and startup landscape.
The goal is overall growth with a focus on digital economy and fintech, tech-enabled development, energy transition and climate change.
India is experiencing an explosion in fintech with innovation in financial products and services. India has the highest adoption rate for fintech in the world at 87%. Policies that have enabled this growth are the Digital India Initiative, a conducive policy environment in addition to a sizeable talent pool. Led by giants like Amazon, Flipkart and Myntra, India’s ecommerce promises to grow exponentially especially in tier-2 and tier-3 cities that have shown high consumption patterns over the last 2 years. There were also a record number of IPOs this year for Indian startups and unicorns such as food delivery app Zomato, payments giant Paytm and fashion ecommerce platform Nykaa. India saw 44 new startups turn into unicorns last year with Indian startups receiving a capital inflow of $39 billion in 2021.
OTHER POTENTIAL GROWTH SECTORS TO WATCH OUT FOR
-The construction industry where the government is seeking foreign investment to modernize infrastructure, develop smart cities, improve transportation, and build affordable housing.
-Electronics, Design and Manufacturing which is one of the world’s fastest growing industries. in India it is projected to reach a valuation of $400 billion by 2025.
-India is expected to emerge as the third largest automotive market by volume by 2026, and e-mobility is likely to see a major expansion and investor interest. Especially given the uncertain future of fuel prices this year.
-The ongoing covid pandemic has also highlighted India’s underserviced healthcare market which is now seeing investments directed towards R&D, medical devices, online medical deliveries, teleconsultations, and use of technology and pharmaceuticals.
In a nutshell, India has a lot of business opportunities to offer with the projected economic growth set to be 9.2% in 2022. This recovery is supported by widespread covid vaccine coverage, gains from supply-side reforms, easing of regulations, a fiscal revamp to increase capital spending and liberal FDI policies. Net capital inflows in the first half of 2021-22 were $65.6 billion on account of continued foreign investment and other domestic policy reasons.
CONNECT WITH BUSINESS SWEDEN TO INVEST IN INDIA
We at Business Sweden believe we can help Swedish companies tap into India’s market and provide the right platform for advice and information. Our team in India has local knowledge, expertise, and established networks to help you expand your business.