Growing Industries in India: Explore the Future Growth Sectors and Future Opportunities

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Stuck with stagnant investments or consistent returns? It’s time to explore the emerging sectors and growing industries in India for better investment opportunities.

India, one of the world’s fastest-growing economies, is set to achieve a remarkable GDP growth rate of 8.5% in the fiscal year 2023-24, according to the India Brand Equity Foundation (IBEF). The growing industries and emerging sectors offer diverse opportunities for investors, entrepreneurs, and businesses across a multitude of sectors. 

In this blog, we will explore the top emerging sectors in India, highlight the best sectors for investment, explore the fastest-growing industries, and identify future growth sectors that promise to shape the nation’s economic growth.

List of Growing Industries in India

1.     Agriculture and Allied Industries

2.     Auto Components

3.     Automobiles

4.     Aviation

5.     Banking

6.     Biotechnology

7.     Cement

8.     Chemicals

9.     Consumer Durables

10.  Defence Manufacturing

11.  E-Commerce

12.  Education and Training

13.  Electronics System Design & Manufacturing

14.  Engineering and Capital Goods

15.  Financial Services

16.  FMCG (Fast Moving Consumer Goods)

17.  Gems and Jewellery

18.  Healthcare

19.  Infrastructure

20.  Insurance

21.  IT & BPM (Information Technology and Business Process Management)

22.  Manufacturing

23.  Media and Entertainment

24.  Medical Devices

25.  Metals and Mining

26.  MSME (Micro, Small and Medium Enterprises)

27.  Oil and Gas

28.  Pharmaceuticals

29.  Ports

30.  Power

31.  Railways

32.  Real Estate

33.  Renewable Energy

34.  Retail

35.  Roads

36.  Science and Technology

37.  Services

38.  Steel

39.  Telecommunications

40.  Textiles

41.  Tourism and Hospitality

Growth Sectors in India

1.     Primary Sector: This sector involves activities related to natural resources, including agriculture, forestry, and mining.

2.     Secondary Sector: Known as the manufacturing and construction sector, it includes the production of goods and infrastructure development.

3.     Tertiary Sector: Also called the service sector, this sector encompasses services like education, healthcare, transportation, and communication. 

Exploring Emerging Sectors in India

In the financial year 2023, India experienced varied Gross Value Added (GVA) growth rates across sectors, showcasing the economic dynamism. 

GVA, representing the value of goods and services produced by an industry, sector, or region, serves as a key indicator of economic performance. 

Growing Sectors in India on the Basis of Annual GVA Growth Rate- FY 2023

Growing Sectors in India
Growing Sectors in India
SectorGrowth Rate (%)
Trade, Hotels, Transport, and Communication13.7%
Public Administration, Defences, and Other Services7.9%
Financing, Real Estate, and Professional Services6.4%
Manufacturing, Construction, Electricity, Water Supply4.3%
Agriculture, Forestry and Fishing, Mining, and Quarrying3.3%

Source- statista.com

Revealing the Performance Dynamics of the Future Growth Sectors in India

Trade, Hotels, Transport, and Communication: This category belongs to the tertiary sector of the economy, which provides services to consumers and businesses. It had the highest growth rate of 13.7% among all the sectors.

Public Administration, Defences, and Other Services: This category also belongs to the tertiary sector of the economy, which includes government activities and social welfare programs. It had the second-highest growth rate of 7.9% among all the sectors.

Financing, Real Estate, and Professional Services: This category is another part of the tertiary sector of the economy, involving financial intermediation, property transactions, and professional services. It had a growth rate of 6.4%, slightly lower than the average growth rate of the tertiary sector (9.3%).

Manufacturing, Construction, Electricity, and Water Supply: This category is part of the secondary sector of the economy, producing goods by transforming raw materials or intermediate products. It had a growth rate of 4.3%, higher than the average growth rate of the secondary sector (3.9%).

Agriculture, Forestry and Fishing, Mining, and Quarrying: This category is part of the primary sector of the economy, involving activities related to natural resources. It had the lowest growth rate of 3.3% among all the sectors in the given period, which was also lower than the average growth rate of the primary sector (3.5%).

Detailed Overview of the Growing Sectors in India

• Trade, Hotels, Transport, and Communication

The Trade, Hotels, Transport, and Communication sectors in India are quite diverse and essential for the country’s economy. According to recent data from Statista, the service sector has become the top among the emerging sectors in India, with up about 18% of India’s real Gross Value Added (GVA) in the fiscal year 2023.

  1. Trade: This involves buying and selling goods and services, both within India and internationally. Some well-known companies in this field are Avenue Supermarts (DMART), Future Retail (FRETAIL), Aditya Birla Fashion and Retail (ABFRL), and Titan Company (TITAN).
  2. Hotels and Restaurants: This includes places to stay and places to eat, like hotels, resorts, restaurants, and cafes. Companies like Indian Hotels Company (INDHOTEL), Lemon Tree Hotels (LEMONTREE), Jubilant Foodworks (JUBLFOOD), and Westlife Development (WESTLIFE) are notable players.
  3. Transport: This covers different ways of getting things from one place to another, such as road, rail, air, and water transportation. Some important companies in this sector are Mahindra Logistics (MAHLOG), Container Corporation of India (CONCOR), Interglobe Aviation (INDIGO), and SpiceJet (SPICEJET).
  4. Communication: This involves services like telecommunication, broadcasting, and information technology, including voice, data, internet, television, and radio. Key companies include Bharti Airtel (BHARTIARTL), Reliance Industries (RELIANCE), Tata Communications (TATACOMM), and Zee Entertainment Enterprises (ZEEL).

Observable signs illustrating the foremost emerging sector’s positive influence on India’s economic development are:

1.     Diverse Activities: India’s services sector encompasses various activities, including trade, hotels, restaurants, transportation, storage, communication, finance, insurance, real estate, business services, community, social and personal services, and services related to construction.

2.     Global Market Expansion: The government is actively working to boost India’s commercial services exports, aiming to increase the country’s share in the global services market by 3.3%. This initiative seeks substantial growth in GDP.

3.     Major GDP Contributor: The service sector plays a pivotal role, contributing over 50% to India’s GDP. In the first half of 2021-22, it experienced a robust growth rate of 10.8%.

4.     Employment Growth: The service sector has become a key employment generator, witnessing a 5-7% year-on-year growth in 2022.

• Public Administration, Defences, and Other Services

This sector includes public administration, defence, community, social and personal services, and other services such as education, health, recreation, and other personal services. It accounts for about 12 per cent of the GVA and employs about 6 per cent of the workforce. This sector is mainly driven by government expenditure, social welfare schemes, and public service delivery.

• Financing, Real Estate, and Professional Services

Ranked third among the fastest-growing sectors in India, this encompasses financial services, real estate, and professional services, including legal, accounting, consulting, and other business services. This emerging sector in India is influenced by factors such as credit availability, interest rates, investment climate, business confidence, and regulations.

With over 2,100 fintech companies operating, India is on track to become a major digital market with the rapid growth of mobile and internet usage. The Government and Reserve Bank of India (RBI) have implemented measures to ease access to finance for MSMEs- Micro, Small, and Medium Enterprises, including initiatives like the Credit Guarantee Fund Scheme, issuing guidelines on collateral requirements, and establishing the Micro Units Development and Refinance Agency (MUDRA).

Key factors demonstrating the role of some government schemes contributing to the growth of the Financing, Real Estate, and Professional Services sectors in India:

• Pradhan Mantri Awas Yojana (PMAY): This initiative aims to provide affordable housing to both urban and rural populations by 2022. The scheme offers subsidies on interest rates, credit-linked subsidies, and incentives for developers and buyers. 

• Startup India: Geared towards fostering entrepreneurship and innovation, this scheme provides various benefits to startups. These include tax exemptions, funding support, ease of doing business, and intellectual property protection.

• myScheme: Serving as a national platform, this scheme facilitates easy discovery of government schemes across various sectors and for different beneficiaries. 

These government initiatives play a crucial role in driving growth within the Financing, Real Estate, and Professional Services sectors in India.

• Manufacturing, Construction, Electricity, Water Supply

In the hierarchy, ranked fourth among the fastest-growing sectors in India, it exerts a substantial multiplier effect on the economy by generating demand for raw materials, intermediate goods, and capital goods.

Indicators highlighting how the manufacturing, construction, electricity, and water supply sector contributes to India’s economic expansion are

  1. Contributing 17% to the nation’s GDP and employing over 27.3 million individuals, the manufacturing sector holds a crucial position in India’s economy. Government initiatives and policies aim to achieve a 25% share of the economy’s output from manufacturing by 2025.
  2. With improved physical and digital infrastructure, India is poised to increase the manufacturing sector’s contribution to the economy, positioning itself as a significant player in global supply chains.

• Agriculture, Forestry and Fishing, Mining, and Quarrying

Ranked as the fifth fastest-growing sector in India, it is dependent on climatic conditions, agricultural production, mineral resources, and fishing activities. It also provides food security, livelihood, and raw materials to the economy. Key Mining States in India are Andhra Pradesh, Madhya Pradesh, Maharashtra, Jharkhand, Odisha, Rajasthan, and Karnataka.

Observable signs illustrating the fifth fastest-growing sector in India sector’s positive influence on India’s economic development are:

  • Agriculture serves as the primary livelihood source for approximately 55% of the Indian population.
  • India’s agriculture sector boasts the world’s second-largest agricultural land, providing employment for around half of the country’s population. 
  • In FY22, there were 1,319 reporting mines, with 545 dedicated to metallic minerals and 775 to non-metallic minerals.

Conclusion

India is experiencing rapid economic growth and offers numerous investment prospects through fast-growing sectors and industries. However, a crucial takeaway is that an emerging expanding sector guarantees remarkable returns. Hence, adopting a diversified strategy is the optimal way to identify the best sector to invest in India.

FAQs | Growing Industries in India

Which is the best sector to invest in India?

The services sector, which includes financing, insurance, real estate, trade, hotels, transport, communication, and business services, stands out as the best sector to invest in India. With the highest GVA growth rate of 13.7% in FY 2023, this sector reflects robust economic performance and diverse opportunities.

Which is the fastest growing industry in India

Among the fastest-growing industries, trade, hotels, transport, and communication take the lead with a remarkable GVA growth rate of 13.7% in the financial year 2023. This industry segment plays a pivotal role in driving overall economic growth, making it an attractive space for investors.

Which is the top sector in the stock market?

The financing, real estate, and professional services sector showcase notable growth with a 6.4% GVA growth rate in FY 2023. This sector’s performance, coupled with its integral role in economic activities, positions it as a key player in the stock market, making it an area worth considering for investors.


Source- ibef.org, myscheme.gov.in, statista.com

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