Deloitte Cii Ges 2017 Interactive

India Services Sector
A Multi-trillion Dollar Opportunity for Global Symbiotic Growth

April 2017
India Services Sector | A Multi-trillion Dollar Opportunity for Global Symbiotic Growth
Contents
Message from Confederation of Indian Industry 04
Message from Deloitte 05
Executive Summary 06
Trade Facilitation in Services 45
Focus Sectors 48
1. Skills 49
2. Education 52
3. Banking & Financial Services 56
4. Healthcare Services 60
5. Information Technology 63
6. Next Gen Cities 69
7. Start-ups / SME in Services 73
8. Media & Entertainment 78
9. Sports Services 83
10. Telecom 88
11. Logistics 93
12. Retail & E-commerce 101
13. Environmental Services 104
14. Energy Services 109
15. Space 115
16. Railway Services 120
17. Professional Services 123
18. Tourism & Hospitality 131
19. Wellness 136
20. Facility Management 140
21. Exhibition and Event Services 143
Emerging Opportunities 146

1. Cyber Security 147
2. Northeast India 151
3. Research & Development 157
About Confederation of Indian Industry 160
About Deloitte 161
Acknowledgements 163
Contacts 164
References 166
03
India Services Sector | A Multi-trillion Dollar Opportunity for Global Symbiotic Growth India Services Sector | A Multi-trillion Dollar Opportunity for Global Symbiotic Growth
Message from Confederation Message from

of Indian Industry Deloitte
Services sector contributes mora than 60% to CII is proud to collaborate with Deloitte India to In order to showcase Indias potential in the Deloitte India is honored to work with the Ministry
India's economy and 28% to the total release a report on Services sector in India and we services sector and the numerous opportunities it of Commerce and Industry and CII for this grand
employment. Attracting highest FDI inflows, hope this would be useful for future businesses. presents, the Ministry of Commerce and Industry event. We have prepared a publication
services sector is on a growth trajectory driven by We are happy to release this important report at in association with the Confederation of Indian highlighting and introducing the opportunities in
digital efforts of the government and highly skilled the prominent event of Global Exhibition on Industry (CII) and SEPC have organised the third various services sectors in India. This publication
and low cost manpower. Services 2017 organized jointly by the Ministry of edition of the Global Exhibition on Services (GES), provides the industry profile of key services
Commerce and Industry, Government of India, to be held in Greater Noida. This year, 70 countries sectors, such as IT, telecom, media and
We have witnessed good revenue generation with Services Export and Promotion Council (SEPC) and are expected to attend this mega event, which is entertainment, healthcare, banking & financial
growing sectoral activities across tourism, Confederation of Industry (CII). The goal of GES is focussing on 20 sectors. services, retail, railways, environment, energy,
healthcare, telecom, information technology, to provide a strong fillip to the global services logistics, exhibition & event, facility, education,
banking, finance, education and space. The new sector becoming a forum for trade, knowledge India has the fastest growing (9.2% in 2015-16) space, skills, start-ups and sports. The publication
sectors, which have gained significant momentum exchange, and fresh partnerships between service sector in the world and contribute about in particular highlights the focus of each sector on
from government and private players, include countries, governments, and businesses. 66% to Indian GDP. The services sector, which various government initiatives Skill India, Digital
sports, railways and retail including e-commerce stands at about $1.48 trillion, has a potential for India, Start-up India and Make in India. We have
and hence, these are included as focus areas in exponential growth riding on various government emphasized on the key drivers of growth in
the Global Exhibition on Services 2017. These initiatives like Make in India, Skill India, Start-up various services sectors in India and the potential
sectors are increasingly gaining global visibility India and Digital India. Unique innovations of for global expansion of services. The publication
and attracting global players to invest and partner IndiaStack namely Aadhaar, DigiLocker, e-Sign, also focusses and delves into special areas such as
with domestic players. UPI, BHIM, and AEPS riding on JAM Trinity has cyber security, trade facilitation, and start-ups/
created presence less, paperless, cashless and SMEs in services sectors. In addition to this, the
Various government initiatives Smart Cities, consent platform will enable exponential growth. publication also focusses on emerging
Clean India, Digital India, etc. are creating enabling Indias distinctive competencies and competitive opportunities in space technology, R&D, cyber
environment giving further push to the services advantage formed by the knowledge-based security and the northeast region.
sectors such as communication, healthcare, services makes it unique emerging market in the
environment, technology, energy, banking to world. Wide range of service sectors have seen We hope the publication will enable various
name a few. With the right regulatory and policy Chandrajit Banerjee double digit growth in the last few years backed stakeholders such as the services industry, the
framework and creating a climate that will ease Director General, by digital technologies and institutional public as well as the private sector to identify the
the way of doing business in India, the services Confederation of Industry mechanisms facilitated by the government. With future prospects for each of the service sectors
sector can achieve new height and hold an significant progression in cultural and government covered in the publication and help in their
enlarged share of global services trade pie. These outlook, the ease of doing business in India has strategic thinking and planning.
conscious efforts of the government to engage substantially improved for both, domestic and
with global companies and governments have led international players. Today, India is home to
to increased investments and participation in some of the best companies of the world as a
Indias strategic initiatives. However, simplified result of the continuing reforms in terms of
regulations and standards, and the establishment reducing trade barriers, relaxing FDI restrictions
of global rules on services such e-commerce, etc. and deregulation.
to facilitate cross-border trade will be critical for
future growth.
04 05
Executive Summary
Information Technology
Potential for Global Expansion Strengths
Advisory services for the world in digital Large pool of STEM talent
transformation
Cost advantage
Asia Pacific Countries (Japan, China,
Expertise in technology enabled business transformation
Australia and ASEAN countries)
Emerging African countries Vibrant start-up ecosystem
South America Opportunities
Digital transformation of industries across the world
Growing domestic market in India, due to digital economy initiatives
Linkages Growth Enablers
Make in India Digital India To transform India into a knowledge empowered economy
Sector Overview Engineering R&D Digital delivery of Rising domestic demand

services major governance and
Global Industry Digital India ($1 trillion dollar opportunity)
player in telecom citizen services
The worldwide IT services market will reach $938 billion in 2017 & semiconductors India Stack: Technology for 1.2 billion (Aadhaar, UPI, e-KYC, eSign, DigiLocker)
Technology
The global IT spending is expected to reach $3.5 trillion in 2017 Leveraging infrastructure for Rising popularity of ICT enabled services
domestic digital economy
26 billion internet connected devices and over 4 billion internet users by 2020 Tech savvy young demography
manufacturing
In 2016, IP traffic 1.1 Zeta Bytes (over 1 trillion GB), by 2020 IP traffic is expected to touch 2.3 ZB National
industry for next Upgradation of talent with new and emerging skills
e-Governance
Indian Industry gen services
plan 2.0 Moving to full transparency in online procurement by Government e-market place
Indian IT-BPM sector size is $143 billion and is expected to reach $155 billion by 2017
Skill India Start-up India Programming of chatbots and robotic process automation along with applications of
Exports market: $108 billion in 2016 machine learning
Creating Skillful Fueling the
Domestic market: $52 billion employment with technology
GDP contribution: 9.5% online vocational startups in India
courses. Making
Key Events Providing a
young students
platform to
World Conference on Information Technology, China employable and
technology savvy
providing working
Consumer Electronic Show (CES), Las Vegas entrepreneur
population with
culture in India
Mobile World Congress, Barcelona new skills
Demand Drivers Case Study
Digital transformation across industries Smart India Hackathon 2017: Worlds largest hackathon involving over 3 million technology students, 6400+ technology institutions in
Growing Internet penetration and smart devices ($4.3 trillion connected life opportunity) India, 36 hours nonstop digital product development competition over 25 centers across the nation solving 600 problem statements
by 25 ministries.
Mainstream adoption of frontier technologies such as artificial intelligence, machine learning, robotics, automation, virtual reality
Digital India
The cost of key technologies such as 3D printing, DNA, solar power, sensors, drones, etc. is falling rapidly
India Stack: Technology for 1.2 billion for paperless, presenceless, cashless and consent
Rising demand of cost effective IT services in the emerging economies (Africa, ASEAN countries)
World class digital payment infrastructure through JAM (Jan dhan, Aadhaar, Mobile), IMPS, UPI, AEPS
Unparalleled innovation for creating digital identity for 1.3 billion Indians using two biometrics (retina scan, fingerprint)
For details, see page 63
06 07
Healthcare
Currently patients from East Africa, Presence of world-class hospitals and skilled medical professionals
Middle East, neighboring countries come
Treatment for major surgeries in India costs approximately 10% of the cost in most of
to India
the developed countries
Indias cost advantage will significantly
Opportunities
open doors for the developed countries
including US, Europe, South East Asia, Increasing penetration of health insurance
Japan, Middle East, Africa
Use of technology for healthcare delivery in remote corners
Make in India Digital India National Health Policy 2017

Comprehensive primary healthcare package
Promoting Fueling innovative
Health Card for access to primary healthcare facility services anytime , anywhere
manufacturing work in space
Free drugs and diagnostics
Sector Overview of medical of m-health,
Free healthcare to victims of gender violence
equipment, devices, telemedicine,
Global Industry Digital Intervention tele consultation, National Knowledge Network, National Digital
consumables and electronic medical
Health Authority and introduction of electronic health records
The global healthcare market had a turnover of $7 trillion in 2015 drugs in India. records, e-ICU,
diagnostics through AYUSH Ministry is working with various agencies, institutions, Ayurveda researchers and
Indian Industry
Reduce the cost of health apps, etc. practitioners across the globe to turn India into a global hub for knowledge, research,
In 2016, the Indian healthcare market had a turnover of $110 billion and is expected to touch $280 billion by 2020. Healthcare delivery these devices, which practice and developmental projects on traditional medicines
constitutes 65% of the overall Indian healthcare market. were so far imported
FDI in hospital and diagnostic centers: $4 billion (April 2000 and September 2016) (with the associated
import duties)
Medical tourism in India
Current: $3.9 billion (2016) Skill India Start-up India
Projected: $8 billion (2020) Healthcare Sector Start-ups are
Tourist arrivals: ~230,000 (2016) Skill Council (HSSC) rapidly increasing
Key Events has been set up in number,
to aid skilling and covering aspects
World Congress on Healthcare and Medical Tourism, Dubai UAE
vocational training like diagnostics,
Demand Drivers for healthcare aggregation of
Large ageing population industry health providers,
electronic
Increasing healthcare costs in the western world medical records,
Increase in chronic and communicable diseases video/remote
consultations
Increase in disposable income aiding affordability of healthcare services
second opinion
consultations, etc.
Case Study
A leading eye care hospital in India provides cataract surgery for $16 including 2 night stay at hospital, and medication and cost of lens.
Only 30% of their patients pay for treatment and rest go free of charge and yet the hospital makes 35% operating profit.
Indian Scientist developed credit card sized ECG machine costing INR 4000 compared to imported machines which are heavier, bigger
and 10 times more expensive.
Healthcare innovation by an Indian: A origami-based, use and throw microscope costing 50 cents for on-field diagnosis of diseases like
malaria, in remote areas of the world like Africa, Thailand.
A knee replacement surgery could cost $40,000 in the US, $10,000 in Thailand, and $8500 in India. Similarly, for bone marrow
transplant costs $400,000 in the US, $150,000 in the UK, and $30,000 in India.
Pradhan Mantri Suraksha Bima Yojana at a cost of INR 12 per annum with a coverage of INR 2,00,000

08 09
Skills
According to OECD, all countries which Low cost skill development capabilities
are likely to face shortage of skills
English proficiency in Indian skill development sector can attract global students
including Japan, Australia, Germany, US,
China, UK, etc. National Skill Development Corporation offers free and paid skill development courses
to Indian students and gives skill certifications
Other geographies including Africa, Nepal,
Sri Lanka, Myanmar, Bangladesh and Intermediate skill development programs like ITIs, Diploma programs in PPP mode
other Middle East countries
Opportunities
Focus on imparting skills through online and onsite medium.
Business models like National Skill Development to provide affordable skill development
courses to global students
Revenue sharing franchisee model

Sector Overview
India Industry Skill India Digital India Skill India Initiative was launched by the Prime Minister in 2015 to train 400 million
To benefit economically from the demographic dividend, Planning Commission has identified 20 sectors to prepare students for people by 2022.
Aim to skill 402 Aim to provide
employment. The sectors are: Construction, Chemicals, M&E, Electronics, Furniture, Tourism, BFSI, Gems & Jewellery, Leather, IT and million workers training to the Government of India has launched Skill Acquisition and Knowledge Awareness for
ITeS, Education and Skills, Food Processing, Healthcare, Retail, Transportation, Textiles, Automobile, Real Estate. by 2022 through youth in the skills Livelihood Promotion Programme (SANKALP) to provide vocational training to 35 million
In 2020, the average Indian will be only 29 years old, compared to 37 in China and the US, 45 in Western Europe and 48 in Japan. Pradhan Mantri required for availing youth.
Kaushal Vikas employment
Over 9.2 million people trained in NSDC, and 3.6 million placed in a short span Government has launched next phase of Skill Strengthening for Industrial Value
Yojana, National opportunities in the
Enhancement (STRIVE), to focus on improving the quality and market relevance of
Vocational training introduced in 10 States, covering 2400+ schools, 2 Boards, benefitting over 250,000 students. Skill Development IT/ITES sector.
vocational training provided in ITIs and strengthen the apprenticeship programmes
Mission, and loans
Net enrolment in vocational courses in India is about 5.5 million; US: 11.3 million; China: 90 million through industry-cluster approach.
up to INR 150,000
Demand Drivers
Case Study
Top countries in the world including Japan, India, Australia, Germany, US, China etc. are facing great skill shortage, creating demand for
skilling programs 1. National Skill Development Corporation: The objective of NSDL is to contribute significantly (40%) to the overall target of skilling /
up-skilling 400 million people in India by 2022, mainly by fostering private sector initiatives in skill development programmes and to
Alleviation of poverty as more than one billion people in the world live on less than $1 a day. In total, 2.7 billion struggle to survive on provide funding. NSDC has 290 training partners, 4526 training centers and has created a world-class scalable platform using digital
less than $2 a day1. technologies2.
Youth make up 25% of the global working-age population; yet their share in total unemployment is 40%. Young people are almost
2. deAsra: deAsra's vision is to support entrepreneurship through a scalable business modelling strategy. deAsra's target is to generate
three times more likely to be unemployed as adults.
1,00,000 jobs in the next five years, (2015 to 2020) by facilitating the creation of 25000 enterprises3.
Government initiatives
Online channel gaining momentum
Corporate partnerships
Private participation
Digital trends
10 11
Education
Opportunity to provide world class cost Low cost education

effective education to people who cannot
Low cost of living attractive for International students
afford the high cost of education in the
developed world. World-renowned educational institutions, including IITs, IIMs, IISc, and AIIMS
Support developing world both through Government's push towards higher education
online and onsite education.
India and China do better in global rankings and have greater opportunities for
South Asia (Nepal, Afghanistan, and
international collaboration
Bhutan)
Middle East Opportunities
Africa (Nigeria and Sudan)
Technological advancements driving innovation in teaching methodologies.
Tutoring in the schooling segment is expected to grow from $8 billion in 2011 to $26
billion in 2020. Similarly, pre-school segment is at nascent stage, and growing.
Sector Overview
In the next 35-40 years, about 700 million to 1.3 billion youth could potentially go
Global Industry through Indias higher education system.
The global education market, in terms of revenue, stood at $4.4 trillion in 2013. Linkages Growth Enablers
Indian Industry Start-up India Digital India Government of India allows 100% FDI in the primary education sector under the
automatic route. The government has also permitted 100% FDI in construction projects,
The Indian education market, in terms of revenue, stood at $97.8 billion in 2016. Many start-ups All schools to be
related to educational institutions.
FDI in education sector in India: $1.4 billion (April 2000-Dec 2016) are entering to connected with
support education broadband and Alignment of academic year, course-curriculum and credit system with the leading
One of the world's largest higher education systems with enrollments of ~33.3 million students in colleges, institutions, across 50,000+ programmes Wi-Fi educational hubs including the US.
higher education institutes and 750+ universities. in remote rural
Pilot MOOCs Government's target to increase digital literacy to at least 50% in the next three years
Key Events locations. About
(Massive Online from the current 15%.
591 education
The Global Education Conference - A week-long virtual conference using Blackboard Collaborate platform involving 25000+ students, Open Courses)
technology startups Rules and policies by UGC to facilitate the creation of world-class institutes in India
educators, and organizations at all levels from 180+ countries launched through
were present in 2015 which can admit up to 30% foreign students.
SWAYAM portal
Demand Drivers with a funding of
which has 93 National Education Policy (NEP) 2016 proposed the introduction of a new system of
ICT and technological developments Telecom driving geographical and financial inclusion about $135 million.
under graduates measuring annual learning outcomes in schools, wherein emphasis will be given on
Demand for skilled resources and 83 graduate science education to promote creativity through innovative content.
programs
Increasing affluence in society The FY2017-18 budgetary allocation stood at $11.9 billion.
Participation of female labor force and demand for pre-school facilities

Case Study
Demand for vocational education
Growing significance of MOOCs MHRD has launched Study Webs of Active Learning for Young Aspiring Minds (SWAYAM), a web portal where Massive Open On-line
Courses (MOOCs) are offered. It provides affordable and flexible way to learn new skills, pursue lifelong interests and deliver quality
educational experience at scale.
A learning app, launched in 2015 for students, with focus on K-12 classes, and competitive exams (CBSE, CAT, IAS, GMAT, GRE, JEE,
NEET, and Bank Exam). It caters to 200,000 school and college students, and attracts 30,000 new users every month.
12 13
Banking & Financial Services

Advisory for creating digital identity digital Government focus on digital

payments through UPI, IMPS, AEPS, BHIM
Large customer base
eSign.
High mobile penetration
Inward Investments - Mauritius,
Singapore, US, UK, Netherlands Increasing last-mile connect via technology - lowering cost for customer
Outward Investments - Emerging Preferred destination of cost, strategic & talent arbitrage
economies in Asia, Africa
Opportunities
Refinancing capital: Real estate, infra and bad loans
Innovation capital: Fintech, RPA, cognitive, blockchain
Investment capital: New banks
Sector Overview Re-engineering capital: GIC/shared services
Global Industry Linkages Growth Enablers
The global banking industry is expected to be $163 trillion in 2017. Make in India Digital India Digital India vision to transform India into a digitally empowered society and knowledge
economy. Digital payment being key driver of this.
Indian Industry Easy loans and New Bank Licenses
benefits to SMEs Strong government and regulator push GOI has raised FDI cap in Insurance and
The Indian Banking and Insurance sector accounted for ~5.8% of GDP (at factor cost, current price) in FY 134. Indian GDP in 2015 stood Digital
pension from 26% to 49% and in ARC to 100%; RBI is considering allowing 100% FDI in
at a whopping $2.095 trillion5, valuing the industrys contribution in GDP at > $121 billion in 2015. Based on MOSPI's advanced first Push for usage of infrastructure
private sector banks; New Banking licenses; Universal banking license available on tap;
estimates of National Income for FY 17, the share of the Financial and insurance sector* in GVA stood at INR 7,106.13 billion in FY17. local resources for (JAM Trinity) UPI,
Demonetization; NPA management; Aadhaar; and other digital initiatives:
Key Events currency printing USSD, IMPS, BHIM
Paperless (Digilocker)
app, QR code
World Economic Forum Annual Meeting Focus on Presence less (Finger Prints, Retina Scans)
infrastructure Demonetization Cashless (Aadhaar Enabled Payments Systems - AEPS)
The Future of Banking (The Economist)
financing Consent Layer (E-Signatures)
Central KYC
FT banking summit
Increased competition
Skill India Start-up India
Demand Drivers
Strategic arbitrage of GICs
Penetration of financial services has significant growth potential Talent arbitrage for Fintech
global support opportunity Foreign banks allowed to operate via WOS
Growing income levels
Technology Agile and
Evolving consumer behavior
learning digital focussed
institutions -Challenging
traditional models
Case Study
IndiaStack: Technology for 1.2 billion with paperless, cashless, presence less and consent.
A leading Indian wallet provider started operations in Canada via initial partnerships with 1,000 merchants. The app allows Canadians
to pay bills (mobile, electricity, water, internet, cable, etc.), insurance and property tax and is available on Android and iOS platforms in
the market.
Note: *Financial and Insurance sector is valued at 29% of the Financial, Insurance, real estate and professional services as per press note on First Advanced estimates
of National Income, MOSPI, 2016-17.
14 15
Start-ups / SME in Services

Major market: Domestic Strong IT/ITeS presence

Analytics and Technology startups export High adoption of Internet Services
services to US , UK, Mid East and ASEAN
Tech savvy and entrepreneur driven demographics
Countries
Huge mobile Penetration
Large investments
Strong presence of Angel Investors and incubators
Opportunities
Skilled manpower
Evolving consumer demand
Sector Overview: SMEs and Startup Services JAM trinity means to address large scale opportunities in rural markets
Global Industry Demand for online service
US and UK are the major startup ecosystems Linkages Growth Enablers
US: 52,000 startups, UK: 4,900 Make in India Digital India Start-up India initiative by Government of India
Israel and China: Growing ecosystem Platform for NOFN, Cloud, Digital India initiative
Indian Industry new product Pradhan Mantri
Commoditization of consumer technology
and engineering Jan-Dhan Yojana,
3rd largest start-up ecosystem in the world; 10,000+ start-ups by 2020; 4750 tech-based start-ups companies Aadhaar, Mobile Smartphone and internet penetration
$4 billion funding in 2016;46.5% CAGR (2010-2016) (JAM) provides a
Availability of risk capital
great platform for
Average age of start-up founders: 28 years
start-ups Global venture capitals interest in Indian start-ups
Around 800 investors in the market
Boost to Fintech,
MSME sector contributes 38% to the GDP; MSME services sector: 30% of the GDP HealthCare,
Key Events Education,
Ecommerce
Global Startup Weekend
Demand Drivers
Entrepreneur Liberal policies
Growing interest of global investors and silicon valley entrepreneurs
driven skills to encourage
Easy exit route for Indian start-ups due to rising M&A activity, offering opportunity for global players business
Partnership from
Increasing demand for cost effective and high quality services globally institutes like IIMs Start-up centers,
Growing investments in R&D and Engineering in India and IITs incubators and
policy support
Case Study: Start-up India program
Start-up India program provides a platform for new technology players for self-certification, patent application, tax benefits, funding up
to INR 100 billion through alternate investment funds, and INR 20 billion through credit, etc.
16 17
Media & Entertainment

Captive NRIs across the world Liberalization of FDI policy (e.g. in broadcast sector)
Increasing interest from US, UK, China, Government initiatives to promote India as a filming destination
Middle East, Africa and South East Asia in
Talented crews to assist in filmmaking at comparatively low cost
India cinema
Online platforms and dubbing in local Growing internet penetration due to proliferation of broadband through public Wi-Fi
language networks
Shooting in India at historical monuments Opportunities

and scenic places Digital adoption across value chain
Co-production treaties
Increasing penetration of multiplexes
Growth potential in animation, VFX, gaming sectors

Sector Overview
Edutainment channels that provide educational content to young minds
Global Industry
Investments from major film studios in regional cinema
Global Media & Entertainment (M&E) industry is expected to touch a market size of $2.14 trillion by 2020
Distribution of channels by Indian broadcasters in overseas countries
Indian Industry
India M&E industry market size estimated to be $20.5 billion in 2016
Television, print and films are 3 largest sectors Make in India Digital India Ministry of Information and Broadcasting has set up the Film Facilitation Office (FFO) to
facilitate efficient approvals and improving ease of shooting in India
Indian film industry: Largest in the world in terms of number of films produced in more than 20 languages, 2nd highest footfall in the FFO offers a single Digital India
world window mechanism campaign to Setting up of Centres of Excellence with state-of-the-art facilities by state governments
for facilitating strengthen the to promote gaming, animation, media & entertainment sector
2nd largest television market with 181 million television households in 2016; ~892 television channels in India
shooting to promote sectors such as
Increase of FDI limit to 49% in television news channels and FM radio and 100% FDI
Largest newspaper market with 110,851 registered publications (March 2016) foreign films video streaming,
allowed in digital cable, DTH services
shooting in India online music
FDI inflows: $6.3 billion (April 2000-Dec 2016)
consumption and
Key Events gaming by increasing
NAB Show, Las Vegas, Nevada internet penetration
Broadcast Asia, Singapore Skill India Start-up India
Cannes Film Festival, France Government Tax exemption

initiatives focusing to encourage
Emmy Awards, USA
on generation of animation and
The Oscars (Academy Awards), California, USA adequately skilled gaming start-up
Demand Drivers workforce which is companies
industry-ready and
Evolving lifestyles and affluence
employable
Upcoming use of visual effects (VFX) in movies
Case Study
Deployment of emerging technologies such as virtual reality, augmented reality, drone shootings, etc.
"India as an international filming destination": After the success of India-based movies such as Slumdog Millionaire, many international
Demand for over-the-top (OTT) services that offer advertising, free content studios are increasingly considering shooting large portions of their films in India. Life of Pi, The Second Best Exotic Marigold Hotel,
Million Dollar Arm, and Mission Impossible IV were some of the movies recently shot in India
18 19
Sports Services
Australia, France, Hungary, Kazakhstan, Increase in the number of academies and training centers by Indian corporates and
Kuwait, Maldives, Mauritius, Netherland, renowned sportspersons
New Zealand, Seychelles, Turkey and
Unexplored rural market and demographic profile in India
Turkmenistan (MOUs in sports with India)
Opportunities
South Asia Association for Regional
Cooperation (SAARC) nations NITI Aayog has advised the government to bid for and host 100 major international
sports events till 2026 by creating a separate arm under the Sports Authority of India
Demand for sports infrastructure, favorable government policies
Sports tourism and sports medicine have high potential
Make in India Digital India Inclusion of sports in the harmonized master list of infrastructure sub-sectors by Union
Sector Overview Finance Ministry
Develop sports To strengthen
Global Industry infrastructure in the sectors Ministry of Youth Affairs and Sports (MYAS) gained the approval of Ministry of Corporate
both rural and urban such as video Affairs (MCA) for inclusion of sports infrastructure, construction and maintenance as
Global sports market: $480-620 billion (2015)
areas streaming, online part of CSR activities
Indian Industry sports content
Government initiatives like Khelo India and Mahatma Gandhi National Rural Employment
consumption by
Indian sports sponsorship market grew 19.3% to $0.95 billion (INR 64 billion) in 2016 Guarantee Act (MGNREGA) to promote sports
increasing internet
1.33 million youngsters are likely to take up sports professionally by 2017 penetration
Of total sponsorships, media spends accounted for 54.8% share followed by on-ground advertising/sponsorship (18.2%), team Skill India
sponsorships (10.9%), franchise fees (8.5%), and endorsements (7.4%)
GOI-initiated Rashtriya Yuva Sashaktikaran
Cricket continues to account for highest sports sponsorships
Karyakram (RYSK) New umbrella scheme
Key Events to enable youth to realise their potential
Olympic Games Case Study

Tennis Grand Slam War of leagues: With IPL & ISL, is India emerging as a sporting nation?
Federation Internationale de Football Association (FIFA) World Cup Inspired by the success of IPL, India witnessed the emergence of new non-cricket sports leagues Indian Super League (ISL), Hockey
India League, Pro Kabaddi League (PKL) and Indian Premiere Tennis League. This has helped in improving skills of Indian players,
Formula 1 Races infrastructure and developing sporting venues
Demand Drivers Emergence of virtual reality based sports experiences
Favorable demographic profile Setting up of sports convention centers for training and conducting events
Increase in female viewership worldwide
Demand for data analytics services for enhancing performance of players
Growing online viewership of sports fueled by mobile and internet connection
20 21
Telecom
Emerging African countries High adoption of mobile devices

South America Lowest tariffs in the world
ASEAN nations Large skilled workforce
Neighboring nations i.e. Bangladesh, Sri- Strong optical fiber backhaul to connect every citizen in the country
Lanka
Opportunities
UK and US as inward investment for
Digital India Internet economy expected to touch INR 10 trillion ($146.72 billion) by 2018, contributing
5% to the GDP
Untapped potential in rural areas
Demand of data services, digitization
Popularity of non-traditional services

Sector Overview
Global Industry
Make in India Digital India Rising demand for internet services in the under penetrated rural market
The global telecom services market size, in terms of revenue was $1.13 trillion in 2016.
38 new mobile Digital payments Popularity of non-traditional telecom services (i.e. OTT, digital content, digital banking,
Indian Industry
manufacturing e-health, social networks, e-commerce)
BharatNet
Mobile services market is expected to reach $37 billion in 2017 and $103.9 billion by 2020 at a CAGR of 10.3%. units established
Cashless economy and other reforms in the payment sector of India
2nd largest telecom market in terms of subscriber base (1.05 billion subscribers) since September eKranti
2015 Pay-tv business models
4th largest app economy Data analytics for
New platform social change Personalized experience
Key Events
for Telecom
Mobile World Congress, Barcelona equipment
manufacturers
Wireless Infrastructure Show, Florida
Demand Drivers
Rising popularity of Indian telecom consultancy services in Africa and South America Skill India Start-up India
Indian telecom companies setting up global footprint Online and offsite Policy framework
platform for to encourage more
Global presence of telecom infrastructure providers
vocational skill tech start-ups to
Rising FDI and entry of global players in Indian MVNO business development, establish business in
Leading ICT service providers supporting Digital India and investing in public Wi-Fi and smart cities certification and India and provides
employability. an attractive
platform for foreign
249 training
investment
partners and 3,222
training centers
Case Study: Reverse Innovation Success in the Telecom Sector
One of the leading telecom operators in India adopted Minute Factory model and chose to strategically outsource its core functions
which resulted in a paradigm shift in the Indian telecom services market. The outsourcing of core activities allowed the operator to be
more customer centric, improved profitability and provided the space to innovate in terms of service offering by adding value added
services. The success was then replicated in African operations and other parts of the world.
Active and passive infrastructure sharing such as towers, etc. for optimizing capex and opex.
22 23
Logistics
Latin America (Brazil, Mexico and Strong demand from end-user industries
Argentina), Africa (Nigeria), Asia
Development of new IT-enabled systems
(Indonesia, China, Hong Kong and
Singapore) Government focus on expansion of road, rail, port and airport infrastructure in India
Opportunities
Increasing focus on third party (3PL), 4PL and 5PL logistics
Increase in e-commerce in India
Focus on specialised services such as liquid logistics, temperature-controlled logistics or

cold chain logistics
Make in India Digital India Taxation and regulatory structure for making the sector competitive
Sector Overview
Growth of Logistics companies Investments in infrastructure for higher efficiencies
Global Industry manufacturing are focusing on
Development of multi-modal hubs including road, railway, ports, aviation and inland
Global logistics industry: $3.34 trillion in 2016 sector in India increased asset
waterways
will drive logistics utilization and
Indian Industry
infrastructure; improvement Logistics costs in India is 16-18% compared to China which is 8-10%, and Europe which is
India spends around 14.4% of its GDP on logistics and transportation sector manufacturing in customer 10-12% - scope for significant reduction in cost
Indian logistics sector is expected to grow from $115 billion to $360 billion by 2032. sector spends nearly satisfaction level
Increase in national highway to 200,000 km will lead to 80% of countrys traffic moving
2.2% of its revenue by deploying smart
Key Events faster
on logistics IT solutions in the
Hamburg International Conference of Logistics, Hamburg, Germany sector Investment of over $250 billion in the road sector by 2019 (of which $80 billion has been
invested)
Demand Drivers
Promotion of inland waterways and construction of 2000 water ports and linkages with
Growing demand in rural and semi-urban areas
railways and highways
Increased focus on third-party (3PL), 4PL and 5PL logistics
Implementation of Goods and Service Tax (GST) to improve efficiencies
Skill India
Development of dedicated freight corridors, logistics parks, free trade warehousing (FTWZ), multimodal logistics parks (MMLP) and
multi-modal transport services CII and National Skill Development
Corporation have set up a Logistics Sector
Skill Council to meet the increased demand
for skills in this sector
Case Study
The government of India has laid strong emphasis on developing India as a regional maritime hub and formulated the Sagarmala
Program focusing on development along 4 thematic areas viz. port modernization and new port development, port connectivity, port
led industrialization and coastal community development.
Innovative models in construction and financing through PPP models by NHAI
24 25
Retail & E-commerce

FDI investments in multi-brand products Strong distribution and delivery network

by global companies
Constant marketing innovation
Omni-channel retailing
Opportunities
Changing demographics and increasing per capita income
Use of technology and digitization
Make in India Digital India Implementation of GST is expected to enable easier movement of goods across the
country, thereby improving retail operations for pan-India retailers.
Sector Overview Manufacturing hub A trillion dollar
opportunity With the allowance of 100% FDI in single brand retail, investor sentiment will get further
Global Industry Initiatives to
push.
promote local Digital drive,
The aggregate revenue of the top 250 global retail players was $4.31 trillion in 2015.
production cashless economy Increasing smartphone penetration along with high speed networks.
The turnover of e-Commerce market was $1.4 trillion in 2016. government leading to higher
Increase in income levels
policies and adoption of online
Indian Industry
incentives. retail. Improvements in logistics and supply chain
Retail market is expected to reach $1 trillion by 2020 from $600 billion in 2015
A platform for Proliferation of digital payment ecosystem
E-commerce sales to reach $120 billion (2020) from $30 billion (2016) more online
Retail and e-commerce contribute ~10% to GDP and 8% in the employment services in the
country.
FDI inflows in retail were INR30.2 billion in India (Jan-2016 to Sep-2016)
Sector leading countries
China, United States, United Kingdom, Japan and Germany are the leading countries in the sector. Human capital Catalyst for growth
plays a very among the start-
Demand Drivers important role up enterprises.
Retail market demand is driven by income growth, urbanization and attitudinal shifts of the consumers. in retail and
e-commerce
E-commerce market is driven by robust investment in the sector and rapid increase in the number of internet and smartphone users
sectors.
The influence
of the young
generation is a key
driver to success.
Case Study
The government has launched E-Marketplace GeM to bring greater transparency and efficiency in public procurement. It will also
help in minimizing prices, and enhance the processes in ways such as demand aggregation, real-time price discovery and prompt
automated payments.
Agrimarket App developed by the government to keep farmers updated with the crop prices.
Increasing the rural e-commerce footprint through over 140,000 post offices of India Post in the rural India providing the last mile
reach.
26 27
Environmental Services
South-East Asia, Africa Increased acceptance of PPP structures
Upsurge in technology adoption for better waste management
A number of angel investors backing waste management startups in India
Opportunities
Government supporting waste management through Swachh Bharat Mission, Smart

Cities Mission, and AMRUT
Municipal solid waste generation expected to reach 114 million by 2041
Government offering subsidies for converting waste to energy (WtE)
Make in India Smart cities The government allows 100% FDI under the automatic route for urban infrastructure
Sector Overview
areas including waste management subject to relevant rules and regulations
Foreign players Smart cities to
Global Industry (through PPP model have hi-tech solid Target to construct 6.6 million toilets in urban India, and over 100 million toilets in rural
$600 billion global market in 2016 or in collaboration waste management India by 2019
with Indian players) system
Indian Industry Swachh Bharat Cess (SBC) levied at a rate of 0.5% on the value of taxable services
can manufacture
3rd largest environmental technologies market globally equipment Investment in Swachh Bharat mission components such as public and household toilets,
The Indian environmental technology market, including goods and services, was worth $16.3 billion in 2016 related to waste solid waste management, capacity building etc.
management
5th largest e-waste producer in the world
1.8 million tons of e-waste generated every year, which is expected to rise to 5.2 million tons by 2030
62 million tons of solid waste generated every year Start-up India Digital India
164,000 MT of waste converted to compost in 2016 Start-ups are Swachh Bharat App
88.4 MW energy produced from waste in 2016 showing enthusiasm which captures
in the field of images using
Key Events recycling and WtE location-based data
Environmental Pollution and Sustainable Energy Conference, Melbourne, Australia and analytics at the
back-end to pin-
5th World Convention on Recycling and Waste Management, Singapore City
point responsibilities
Demand Drivers and actions
Rapid globalisation Case Study
Population growth and growing middle class Indian Government has launched the Swachh Paryatan App which lists 25 monuments protected and maintained by Archaeological
Increased international trade Survey of India. These 25 monuments have been identified as Adarsh Smaraks. Citizens can share images of garbage at these sites and
the government will take immediate action.
ISRO brings together worlds biggest collation of space agencies to fight pollution and global warming.
28 29
Energy Services
Russia, Iran, Qatar, UAE, Nepal, Government initiatives such as HELP, UDAY schemes in oil and gas and power sector
Bangladesh, US, Australia
India to merge its existing state-owned oil companies to set up a global integrated oil
and gas company
Opportunities
Government to allow oil and gas companies to select areas where they want to drill
through Open Acreage Licensing Policy (OALP)
India has targeted generating 175 GW of power from renewables by 2022
Make in India New Hydrocarbon Exploration and Licensing Policy (HELP) to provide for a uniform
licensing system for oil, gas, CBM etc., under a single licensing framework
Oil PSUs have formulated INDEG
Sector Overview (Indigenisation Group) to increase the The Discovered Small Fields Policy offers 67 Discovered Small Fields in 46 contract areas
domestic component in all kinds of oil through new revenue sharing model
Global Industry procurements
The Ethanol Blended Petrol (EBP) Programme will enable oil companies to sell ethanol
Global primary energy consumption increased by 1.0% in 2015, well below its 10-year average of 1.9%. Oil remains the worlds leading
Skill India Start-up India blended petrol with ethanol percentage of up to 10%
fuel, accounting for 32.9% of global energy consumption
Government focus Oil India and ONGC India and France launched a $1 trillion programme to help member countries of the
Indian Industry
on generation of have announced International Solar Alliance (ISA) harness their solar resources
3rd largest energy consumer in the world. It imports over 81% of its crude oil requirements, and meets 45.7% of its gas requirements adequately skilled INR 500 million and
through imports workforce. One INR 1 billion start-up
5th largest solar energy producer of such initiatives funds, respectively
by MoPNG is to foster and
4th largest wind energy producer with over 32000 MW installation to set up 6 Skill incubate new ideas
11th largest in the total renewable energy producer in the world Development related to oil and gas
Institutes (SDIs) in sector
Key Events
the country
22nd World Petroleum Congress, Istanbul, Turkey
Case Study
Demand Drivers
In February 2017, Indias solar power sector recorded low-winning bids of INR 2.97 per kilowatt-hour (kWh) to build a 750 MW plant
Government aims to reduce oil import dependency to 10% from current level by 2022 at Rewa in Madhya Pradesh, called by Rewa Ultra Mega Power Ltd, a JV of Solar Energy Corp. of India Ltd (SECI) and MPUVNL. The low
Oil and gas companies plan significant investments to increase oil and gas output tariff primarily due to low cost of financing the project has made solar energy a competitive source of energy vis--vis the coal-
fueled conventional source of electricity.
India to increase the share of natural gas in its energy mix from 6.5% to 15% by 2020-21 by more than doubling its LNG import capacity
to 50 MT in the next few years The Kamulthi Solar plant, largest solar power plant located in India with a capacity of 646 MW (cumulative over 10,000 MW through
solar) and cleaned by robotic systems that is charged by solar panels.
India has made a huge commitment as a part of COP-21 to reduce energy intensity in the economy by 33-35%, compared to 2005 level,
by 2035 For details, see page 109
Government accorded CGD network the status of public utility to increase its reach
30 31
Space
US, UK, Germany, France, Japan, Russia Capability to launch small payload satellites at low cost
and South Kore
Expertise in multiple launch technologies
Opportunities
Major opportunity for low-cost satellite manufacturing for private players and SMEs
Industry consortiums to participate in production of PSLVs and regional navigation

satellites
Large satellite order book of around INR 2,800 million ($42.8 million) for third parties
Make in India Government has increased space budget estimate for FY2017-18 by more than 20%, to
INR 90.94 billion ($1.35 billion) to provide initial funding for two new space missions to
Enhance capacities in the private sector
Sector Overview Mars and Venus
to foster B2B collaborations
Global Industry Government approval for building its own space station.
Increase in low-cost manufacturing
In 2015, the global space industry had a turnover of $335 billion, of which the satellite industry accounted for 62% ($208 billion) facilities to encourage private Government to set up Space Parks for private players to set up facilities to make
participation in manufacturing subsystems and components for satellites
Indian Industry
subsystems and components for
Indian satellite industry includes satellite services, satellite launch services, satellite manufacturing and ground equipment satellites
Key Events Start-up India
World Space Week Exploring New Worlds in Space Start-ups in satellite manufacturing are
Demand Drivers leveraging technologies, infrastructure
and manpower to build space-based
Strength of Indian organizations such as ISRO in launching satellites at low cost
services
Production of satellites parts and satellites with small payloads at low cost
Case Study
In February 2017, Indias ISRO launched a record 104 satellites, taking its tally of foreign satellites launched till date to 180. The latest
launch comprised three of ISROs own satellites, while the remaining 101 were from six countries. ISRO expects to recover almost 50% of
the missions cost from payments for foreign launches
32 33
Railway Services
South-East Asia, Africa The 108,706-km network facilitates movement of 12,617 passenger trains. It has 6,853
stations, 240,000 wagons, 63,045 coaches, and 10,773 locomotives
Opportunities
Expected investment of $137 billion in metro rails by 2020
Significant potential in O&M services as government focusses on upgradation of

facilities, and station re-development
17 sectors in railway operations allow 100% foreign/private investment
Make in India Digital India The government has cleared the setting up of a new Railway Development Authority
(RDA) which, apart from recommending passenger fares and freight charges, will also
Open Wi-Fi to be Stations to be
regulate the sector, which will be opened to private players
Sector Overview provided at 400 equipped with
stations Cloud-based
Global Industry railway display
Plan for
The size of the global rail market reached $170 billion in 2015, and is expected to reach $195 billion by 2021 networks
construction of
Indian Industry six dedicated Plan for selling
freight corridors unreserved tickets
4th largest rail network in the world
along the Golden through e-wallets
Largest employer in the country with 1.4 million employees Quadrilateral
The turnover of Indian railways was $25.2 billion in 2016 and is expected to reach $44.5 billion by 2020 Case Study
Facilitated movement of 8.2 billion passengers and 1.1 billion tons of freight in 2015-16 Centre for Railway Information Services has recently upgraded the e-ticketing system. The new system is based on an in-memory
Key Events database capable of handling big data. Three million users have migrated; it provides dynamic load balancing to be able to seamlessly
manage high demand during peak hours.
International Railway Summit, Kuala Lumpur
Demand Drivers ISRO helps railways with remote sensing at unmanned railway crossings using IRNSS and GPS.
Urbanization and digitalization will sustain growth For details, see page 120
Growing middle class population

Setting up of infrastructure for high-speed trains
34 35
Professional Services
Audit and Accounting: US and UK Strong technology presence and local demand
Management Consulting: US, Europe and Growing Export market for Audit and Management Consulting
APAC and ASEAN countries
Large pool of skilled and unskilled labor
Architecture and Engineering Services :
Mid-east and Asian countries Proficiency in English helps in outsourcing demand
Opportunities
R&D centers in India
Growing Demand for Audit and Management Consulting
Shared Service centers in India (Multi National)
Growing domestic market
Sector Overview Preference to low cost high quality products
Global Industry Architectural outsourcing
Global professional services market size : $3.75 trillion in 2015 Linkages Growth Enablers
Global Management Consulting market: $321 billion in 2016 Make in India Large presence of shared services centers in India
US accounts for 40% of professional services market with $1500 billion in 2015 Start-ups in professional service space IndAS converged with IFRS has been a catalyst for expansion
Indian Industry New investments due to liberal rules Developing talent pool in India which is accredited for the global accounting and auditing
Indian Management consulting market: $ 5.4 billion (INR 348 billion) by 2018 standards
Huge boost to Domestic market and
$28.4 billion Management consulting exports market Employment Promotion of trade agreements for easy promotion of professional services
10,330 management institutes and 700,000 faculties. Skill India Start-up India Liberal FDI in some sectors
2 million enrolments in management courses Talent pool to Start-ups in

Demand Drivers provide different professional
professional service space
Diverse accounting proficiency services
New investments
Skilled talent pool
Language due to liberal rules
Proficiency in English language proficiency and
Huge boost to
vocational skills
Technology in Professional Services domestic market
to promote
Popularity of R&D hubs in India and employment
outsourcing
Audit Professionals in India Case Study
ICAI members: 253,369 ICAI Cloud Campus Online mentoring to enable students interact with Faculty Members and clear their doubts/ questions
American Institute of CPAs: 664,532
Institute of Chartered accountants in England and Wales: 147,000
36 37
Tourism & Hospitality

USA, Bangladesh, UK, Australia, Russia, Growth of e-Tourist Visa, eBusiness Visa and eMedical Visa
Canada, Malaysia, Germany, China,
Multilingual proficiency of guides
Sri Lanka, Singapore, France, Japan,
Afghanistan and Nepal Set up of Hospitality Development and Promotion Board (HDPB), to monitor and
facilitate hotel project clearances and approvals
Opportunities
Increase in medical tourism with world class hospitals and skilled medical professionals
India to host the Under-17 football World Cup in October 2017, aimed at boosting sports
tourism
Indias 7,500 km coastline can be used to tap potential for cruise tourism
Untapped potential in East and South India (4% tourists visit East India and 18% visit
Sector Overview South India)
Indian Industry Linkages Growth Enablers
Tourism sectors direct contribution to Indias GDP: $47 billion in 2016 Make in India Digital India Provision to offer pre-loaded sim cards to foreign tourists arriving India on e-Visa
In 2016, Foreign Tourist Arrivals (FTAs) were 8.9 million as compared to 8.3 million in 2015 100% FDI allowed E-Visa system Increased government initiatives such as Swadesh Darshan, Pilgrimage Rejuvenation
in tourism extended to 161 and Spiritual Augmentation Drive (PRASAD)
Foreign Exchange Earnings (FEEs) from tourism was INR 1,556.50 billion ($24.4 billion) in 2016
construction countries
Tourism and hospitality sector generated FDI inflows of INR 73.5 billion ($1.1 billion) in 2016 Incentives offered by state governments include subsidised land costs, relaxation in
projects, including
Launch of stamp duty, and exemption on sale/lease of land, power tariff incentives, concessional
Improvement in Tourism rankings from 52nd in 2015 to 40th in 2016 due to liberalised visa regime the development
Incredible India rate of interest on loans, investment subsidies/tax incentives, backward areas subsidies
of hotels, resorts
Key Events app, DigiLocker and special incentive packages for mega projects
(for storage
World Tourism Forum, May 2017, Lucerne, Switzerland
of physical
Demand Drivers documents)
India offers new and relatively cheaper tourism destination with vast geographical diversity, large coastline with attractive beaches, 30 Connecting all
World Heritage Sites and 25 biogeographic zone gram panchayats
Diverse portfolio of niche tourism products cruises, adventure, medical, wellness, sports, eco-tourism, film and religious tourism under Bharat Net
initiative
Dependable and low-cost medical tourism industry in India is expected to touch $8 billion by 2020
Skill India
The Visa on Arrival scheme extended to 180 countries in 2016. A five-year tax holiday offered for 2, 3, and 4 star category hotels
located around UNESCO World Heritage sites (except Delhi and Mumbai) Set up of Tourism and Hospitality Skill
council
Set up of National Skill Development

Agency (NSDA), National Skill
Development Corporation (NSDC)
Case Study
The government of India launched an international marketing campaign, Incredible India to promote tourism in India to the global
audience. It promotes India as a desirable destination among international travellers from the US, Europe and Asia-Pacific and reaches
out to travellers in a cost-effective way.
Rollout of liberalised visa regime covering 161 countries in 24 airports and 3 ports for e-visa increases
38 39
Wellness
Online and onsite training by leading yoga Increasing demand for ethnic products
institutes for global audience
Great potential of India with the presence of several Yoga centers, naturopathy centers
Global demand arising from USA,
Advantage of having young population with the willingness to adopt to new fitness
Bangladesh, UK, Sri Lanka, Canada
mantras
Certification for yoga teachers and
Opportunities
Ayurveda practitioners from leading
Indian institutes Significant tourist movement to India for Ayurveda and Yoga
Make in India Digital India Growing consumer interest in health, travel, and new experiences
100% FDI is Initiatives such as Growing urbanization and changing lifestyle

permitted in the National Health
Easy access to beauty and wellness products through online shopping
Sector Overview AYUSH sector Portal to provide
general information Separate ministry named AYUSH to promote wellness sector
Global Industry India is the second
on health and
largest exporter Strong support by the Government by recognizing Wellness as one of the priority
Globally, wellness industry represents a $3.7 trillion economy, with a growth of 10.6% from 2013-2015. diseases and
of Ayurvedic sectors in its Make in India campaign
multiple mobile
Global yoga market is estimated at $80 billion and alternative
apps, like the Ancient knowledge of yoga, meditation, spa and ayurveda for preventive health,
medicine in
Indian Industry Swasthya Bharat wellness and wellbeing.
the world and
The wellness market in India had a turnover of $13 billion in 2015, it is expected to grow at a CAGR of nearly 12% to reach $23 billion App
has developed
by 2020. vast AYUSH
Key Events infrastructure
comprising of
Global Wellness Summit, Florida
736,538 registered
International Yoga Day practitioners
Demand Drivers Skill India Start-up India
Emerging global middle class with rising disposable income Beauty and Wellness Setting up of
Increasing awareness and availability of herbal and Ayurveda products Skill Development specialized
Council (BWSSC) treatment centers
Focus on preventive healthcare
established
Rising cost of healthcare in the world to ensure the
generation of skilled
manpower in the
sector
Case Study
The Ministry of AYUSH observes the International Day of Yoga on 21st June every year. In 2016, an estimated 5 million people
participated in yoga training programmes in India over a period of one month.
40 41
Next Gen Cities Facility Management
Sector Overview Sector Overview
Envisaged investment of $40 billion in developing 100 cities during the Smart City Mission period of 5 years Global Industry
30% of proposed investment in the ICT sector towards developing smart solutions for urban residents Market was estimated at $1.12 trillion in 2016.
Facilitate requisite infrastructure and services for 40% of Indian residents in the urban areas by 2035 Indian Industry
India market is expected to grow at 17% year-on-year and reach $19 billion by 2020.
Demand Drivers
The Smart Cities Mission has attracted Top-down strategy for solutions development
Increasing urban development and modernization of office spaces are driving the growth in the sector.
funding from multilateral donor agencies
Convergence with other Government schemes
like DFID, World Bank in developing key Potential for Global Expansion Strengths
Indian cities as Next Gen Cities Inclusive governance through citizen participation at all levels
Global companies are investing in India in iCloud based systems used by companies to provide top quality service.
The Smart Solutions proposed as part of Opportunities setting up their operations. Some of the
the Smart City plans are likely to facilitate Diversification into IT/Healthcare/Services and financial sector.
Large untapped market leading US players are already operating
large investments from global SI firms in India. Digitization of human capital and resource management.
Growing demand of ICT enabled smart urban services
Opportunities
Digitization efforts of the government irrespective of the sector
Increased use of technology ATM machines
Increased security awareness
Make in India Digital India 30% of proposed investment of $40 billion in the ICT sector towards developing smart
solutions for urban residents Growth of urban infrastructure
Enhancing Convergence
capacity of large to support Growth Enablers
OEMs for catering development of Robust infrastructure development roadmap of the government.
to smart solutions smart & innovative
envisaged under solutions Policy initiatives like RERA, GST, and infrastructure status for affordable housing are making India an attractive destination for
the Smart City corporates to expand operations.
Digital
Mission Case Study
empowerment of
citizens One of Indias leading facility management firm is working with government, semi-government and private sector for development of
gardens and landscapes, roads, rural electrification projects, factory construction and relocation.
Case Study One of the leading multi-national companies has set up operations in India and provides asset services and manages Corporate
Offices, Information Technology Parks, Retail Malls, BPOs, Call Centres, Banks, Financial Institutions and Residential Complexes.
In April, 2015 the Government of India approved the Smart City Mission to develop 100 smart cities across the country with an outlay of
INR 480 billion over a period of five years. Subsequently, the Prime Minister of India launched the Smart City Mission on 25th June, 2015 Bus terminal in Vadodara has been built under a public-private partnership with world class facilities and Airport like design. The realty
with the Ministry of Urban Development (MoUD), GoI as the nodal agency for creating these Next Gen Cities. firm involved in the construction has been given a 31 year contract for the maintenance and cleanliness of the facilities.
For details, see page 69 For details, see page 140
42 43
Exhibition and Event Service

Trade Facilitation in Services
The services sector has perhaps become Gains in services leading to export almost double than that of its share in
the most important part of most growth global merchandise exports. Indias share
economies across the globe and assumes Indian export story has also benefited from of global exports of commercial services
special importance for the Indian economy, its strength in the services sector. This is increased to 3.2% in 2013 from 1.2% in
especially its role in driving the economy evident from the trade data. Rapid growth 2000. In fact, during the period from
forward to greater heights. in services has meant big strides in exports 2001-2013, CAGR of world commercial
of services too. This has been possible in services exports was 10% with India being
The Indian economy has grown in its the last decade due to information and at the top amongst the 15 top economies
own unique way as reforms of the 1990s communication technology revolution registering growth at 20.1%, followed by
paved the way for growth of the services of mid-1990s and a boost to growth in China at 16.5%. India stands as the eighth
sector before any significant leap in the technology, transportability, and tradability largest services exporter in the world.
manufacturing sector. The progress that have in turn changed the nature and The services sector is also more open, as
of the service sector meant a gain in tradability of services6 7. calculated by total trade including services
sophistication of services along with the as a percentage of GDP, as compared to the
sector accounting for a major share of the Indias service exports grew almost ten-fold merchandise trade sector8.
economy. in the past 15 years, its share in global
Sector Overview services exports (such as IT services) being
Global Industry
Figure 1: Indian exports of commercial services ($ billion)
Global exhibition market had a turnover of $55 billion and attracts nearly 260 million visitors annually.
Indian Industry 148.2 155.7 155.3
145.03
137.9
Indian event industry is projected to be worth nearly INR 960 billion (~$14.5 billion) 116.6
105.6 92.4
Growth rate expected to be ~ 5.2% year-on-year 86.2
Growth drivers 69.1
Market is largely driven by an increase in the need for specialized, effective, and high-quality exhibition events.
Social media and search engine marketing.
Increasing demand for sophistication.
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Strengths
Source: World Trade Organization
Use of technology in organizing exhibitions
Achieving efficiency by use of analytics and other tools
Availability of niche specialists Furthermore, exports in services have kept The success of these services can be These advancements have also had a
pace with the changing global dynamics assessed by looking at the proportion of qualitative impact on services exports
Opportunities
and shift towards more technology ICT related service exports, which have as rapid growth of such services that do
Growth of Indias industrial engineering, garment, transport equipment and IT/telecoms sectors are helping to create more demand adoption in all areas. The technology and grown manifold since 2000 and are above not require face-to-face interaction, have
Ministry of Tourism is emphasizing on the potential of MICE Tourism and the new tourism policy has identified it as an important business services are some of the most 67% as of today. It is no surprise then that the potential of being stored and traded
product to increase tourism revenue. dynamic in the world. Indias major services Indian service exports are even more digitally.
exports are computer services followed by sophisticated than the average level of high
Growth Enablers business services and then technical and income countries9.
Supportive government policies and regulations trade related services.
Outstanding infrastructure for meetings and events

Connectivity with other major destinations worldwide
Case Study
Vibrant Gujarat: The 8th edition attracted 33000+ global participants, 100+ countries and 12 partner countries (Australia, Denmark,
Canada, Japan, US, UK, etc.) to connect the global investor with India and the state, showcase innovation and best practices, and discuss
their application to the state and the nation, empower India to compete with the best global economies and provide a platform for
global business networking. MoUs touched INR 20 trillion in defence, aerospace, mining, mineral, chemicals, steel, automotive, IT, etc.
44 45
Figure 2: ICT services exports as % of total services exports access but to ensure that already existing Given Indias fast growing global services
market access gained from current and footprint, it was imperative that the country
future liberalization commitments are take the initiative in moving for a TFS
69
68 68 68 69 68 68 effective and meaningful. Agreement. An agreement, in conjunction
67 66 67
with enhanced liberalization commitments,
65
The scope of the TFS agreement would would help realize the fuller potential
61 61 include measures by members affecting for trade in services for the domestic
59 trade in services across all modes of economy.
supply. In case of services supplied through
55 mode 3 (a foreign company setting Conclusion
up subsidiaries/branches to provide The World Bank in its latest global outlook14
services in another country), it suggests pointed out that protectionism had been
streamlining via a single window clearance rising and research cited in the outlook
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
system. For cross-border movement of showed that in 2016, the G20 group of
Source: World Bank services suppliers, also known as mode countries had taken more trade restrictive
4, it suggests simplifying work permit and measures than trade facilitating ones. It
visa procedures while ensuring that policies was seen that the policy announcements
relating to taxation, fees and social security were made keeping in view the short term
Foreign investment plays its part10 Before delving deeper into how trade in These definitions are significantly broader
contributions do not unfairly disadvantage dynamics and did not actually address
It is important to note the role that foreign services can be increased, it is important than the concept of services in Balance
foreign suppliers.12 the structural issues facing the economy.
direct investment has played in the to understand how are services measured of payments and essential to further
Such protectionist trade policies create
evolution of the Indian services sector. The and classified. Unlike trade in goods which understand how trade in services can
The TFS includes as a crucial element, uncertainties as they are meant to provide
past two decades have seen significant can easily be tracked as being bought and evolve.
facilitating movement of natural persons immediate stimulus and therefore tend to
growth in FDI inflows in India, with services sold, the nature of services is such that it
to address Mode 4 delivery of services as be more variable and less consistent.
being the major beneficiary. The combined needs further clarification. Trade Facilitation in Services (TFS)
defined in the General Agreement on Trade On the other hand, services have become
FDI share of the top 10 service sectors is Agreement
in Services (GATS). Mode 4 covers natural a major part of trade flows. Given the
53.3% of the cumulative FDI equity inflows Classification of services Given the importance of services and
persons who are service suppliers or work potential for growth in services exports,
during the period April 2000-October The World Trade Organization (WTO) has our inherent strength in providing high
for service suppliers and are present in services-sector negotiations both at
2015. While total FDI inflows grew by come up with a four pronged definition quality services at competitive costs
another WTO member country to supply multilateral and bilateral/regional levels
27.3% in FY15, FDI inflows to the services under a General Agreement on Trade the Indian policymakers have rightly
a service. This has become important in have great significance for India. In
sector, including the top 10 services, in Services (GATS) dependent on the been pushing for a TFS agreement. In
the current global scenario, as there is this respect, India has gone ahead and
grew by 70.4%. A further expansion can territorial presence of the supplier and the fact, India has already tabled a paper
growing discontent surrounding migration made significant progress by signing
be seen in FDI inflows in core services, consumer at the time of the transaction11. Concept Note for an Initiative on Trade
that negatively impacts services trade. comprehensive bilateral trade agreements
which have touched $5.3 billion in FY17 Facilitation in Services, which was followed
Restrictions on entry and exit have a direct with the governments of South Korea,
(Apr-Sep), which is close to $6.9 billion 01. Mode 1 Cross border trade: from by submission of an elements paper
impact on the ease of conducting business. Japan, Malaysia and Singapore. India also
that was achieved for the last full financial the territory of one member into the in November 2016. The objective was to
has a free trade agreement (FTA) with
year of FY16. Services contributed 17.2% territory of any other member outline the broad contours of a Trade
The TFS paper also suggests facilitative ASEAN that came into effect from mid-2015
to total FDI inflows in FY16, and this figure 02. Mode 2 Consumption abroad: in Facilitation in Services (TFS) Agreement.
provisions for the meaningful supply of while also being a part of the mega regional
has grown to almost a quarter of total the territory of one Member to the This assumes special importance in todays
Mode 4 services as well as clarification and FTA Regional Economic Comprehensive
FDI inflows, or 24.5%, in the first two service consumer of any other Member world when countries seem to be moving
publication requirement that allows for Partnership.
quarters of FY17. Thus, as a World Bank 03. Mode 3 Commercial presence: towards protectionism rather than further
providing and making publicly available,
study of 2004, also underscored, there is by a service supplier of one Member, globalization. The TFS would essentially
explanatory material on all relevant Given these initiatives and the need to
a definitive positive correlation between through commercial presence, in the try and ease global services trade with
immigration formalities. Facilitative grow trade in services, hurdles to growth
the level of liberalization and growth in territory of any other Member the aim of reducing barriers that service
provisions could include multiple must be addressed. Trade facilitation in
service subsectors in India. Hence as 04. Mode 4 Presence of natural providers face. Some of the barriers that
entry permits as well as exemption of services is a positive move and can go
global integration increases and as global persons: by a service supplier of one the proposal aims to reduce are high fees,
committed categories of natural persons a long way in alleviating these concerns
capital seeks more profitable sectors for Member, through the presence of opaque and cumbersome procedures and
from payment of additional costs and by helping increase the ease of ease of
investment, trade in services is bound to natural persons of a Member in the complex requirements for licensing and
charges, including social security payment. doing business while providing some more
increase and may be faster than trade in territory of any other Member movement of persons. The intention of
Facilitating cross-border investment as certainty to service providers.
merchandise. the agreement is not to get more market
well as consumption abroad besides more
transparent administration were also
included as specific requirements. Labor
market and economic needs tests are also
provided for13.
46 47
1. Skill
Industry profile
Focus According to Central Intelligence Agency

(CIA), the working age population (15-54
growth engine for the global economy
in the next decade. In order to sustain
Indias proportion of trained workforce
is among the lowest in the world with
Sectors
years) accounted for 58.9% of 1.26 billion the growth momentum, interventions only 10% workforce trained in vocational
population in 2016 and is expected to in skill development ecosystem namely trades through formal/ informal modes.17
increase to 65.9% of population in 2022 infrastructure, pedagogy and trainers are The current skills and vocational set-up in
(891 million).15 India has been one of key priorities. The provision of skills training India include Industrial Training Institutes
the fastest growing large economies in India is quintessential to sustain growth, (ITIs), Polytechnics (both Public & Private),
in recent years and is expected to be a development and business opportunity.16 and Private Vocational Training Providers
Figure 3: Skill development ecosystem in India

Skill Development Eco-System in India
Key Bodies Enablers Implementing Bodies Beneficiaries
Ministry of Skill State Skill Development Industrial Training Institute Marginalized societies
Development & Missions (SSDM) (ITIs)
Unemployed youth
Entrepreneurship
National Skill Development Polytechnics
Low income group
Ministry of Human Corporation (NSDC)
Vocational Training
Resource Development School & college students
National Skill Development Providers (VTP)
Ministry of Rural Agency (NSDA) Workers in informal sector
Captive training by
Development (MoRD)
Sector Skill Councils (SSCs) employers Corporate
Other Central Ministries
National Council for Schools
Vocational Training (NCVT)
Universities
State Council of Vocational
Assessment and
Training (SCVT)
certification agencies
Financial Institutions
Source: Konrad Adenauer Stiftung Skill Development in India, 2015
48 49
(PVTP). The various schemes by National Growth drivers for the industry Government initiatives Training Service Delivery Agents- offer
Skill Development Corporation (NSDC) and
Government Initiatives: The government
Government tie-ups Government has launched various training to 300,000 service delivery
other Central Ministries in coordination
with Ministry of Skill Development and
has undertaken several initiatives to to enhance skills programs to enhance the skill development
in India. Some of these include:
agents as part of skill development
to run viable businesses delivering IT
improve skill development and vocational
Entrepreneurship (MoSDE) caters to services.
training in India, including setting up Skill India: The government launched
around 3.5 million people, falling short of National Skill Development Training Rural Workforce on Telecom
of Indian Skill Development Services Skill India campaign in 2015 aiming to skill
the of 13 million who are expected to join Corporation of India (NSDC) and Telecom related services- teaching
(ISDS), and provision of entrepreneurship 400 million workers by 2022. Under the
the workforce every year by 2022.18 signed a MoU with Center for 500,000 rural youth in the Telecom
education and training in ITIs and program following initiatives are taken:
Research & Industrial Staff Service Providers (TSPs) domain26.
Vocational Training Centres. Pradhan Mantri Kaushal Vikas Yojana
In order to give thrust to the vocational Performance (CRISP) to explore
(PMKVY): PMKVY is the flagship Ministry of Skill Development and
skilling ecosystem, the government has Online channel gaining momentum: national and international
program under the Skill India Initiative Entrepreneurship: Launched in June
taken multiple initiatives such as the With rising internet penetration in opportunities for strengthening
and it includes incentivizing skill 2014, it is entrusted to make broad
formation of Ministry of Skill Development India, vocational training companies are skills development in India28.
training by providing financial rewards policies for all other ministries skill
and Entrepreneurship (MoSDE) in 2014 choosing the online platforms to offer
India and Germany have signed on completion of training to the development initiatives and National Skill
and launch of National Policy on Skill courses and expand their outreach.
an agreement on vocational participants. It aims to impart skills to Development Corporation (NSDC).
Development and Entrepreneurship
Corporate partnerships: Vocational education and skill development 10 million youth of the country during National Skill Development Corporation
2015. Additionally, Skill India Initiative
training companies have entered into with a budget of $3.37 million, 2016 to 202023. (NSDC): NSDC is a public private
was launched by Prime Minister in 2015
agreements with corporate houses to which will help create and National Skill Development Mission partnership organization incorporated
to train 400 million people by 2022. The
train employees with the required skill improve cooperative workplace- has created an elaborate skilling eco- in 2009 under the National Skill
State governments have also set up State
sets. based vocational training in Indias system and imparted training to 7.6 Policy (now under the Ministry of Skill
Skill Development Mission and new skill
industrial clusters29. million youth24. Development and Entrepreneurship).
development departments. Various models Private participation: Private players are
National Policy for Skill Development Its main aim is to provide viability gap
with Private sector involvement have also showing interest in developing skills Ministry of Skill Development
and Entrepreneurship, 2015: funding to private sector in order to
been piloted and are being encouraged. in their respective sectors20. & Entrepreneurship (MoSDE)
Government has identified a skills gap scale up training capacity27.
Thus, skill development landscape is set and the Wadhwani Operating
Foreign languages: Multinational for 110 million workers in 20 key sectors
to provide ample opportunities for private Foundation have announced a
companies in India and Indian by year 2022, of which 55 million are Conclusion and recommendations
sector involvement. tie-up to empower Government
conglomerates have growing demand from rural India. The policy aims to train The Indian Government has laid a special
of Indias Pradhan Mantri Yuva
for candidates with foreign language these workers and provide them with focus on expanding and improving
The government has also focused on skill Udyamita Vikas Abhiyaan on
skills. The sectors such as IT, Publishing, job. It currently has over 690 projects the skill education and training in the
development in the Union Budget 2017-18. entrepreneurship30.
Advertising, Entertainment, Mass being implemented by 300 partners, in country. The Policy on Skill Development
This budget aims to:
Communications, Aviation, Hospitality India and Switzerland have signed more than 330 trades from 82 industry and Entrepreneurship contains several
Set-up 100 India International Skill & Tourism, Education & Training and an agreement to establish formal sectors. Over 27,00,000 candidates initiatives which, if implemented earnestly,
Centres across the country. Public Relations have greater demand cooperation in the fields of skills have been trained and over 1,34,000 will go a long way in minimizing the
for such professionals. The popular development and vocational candidates have been placed in jobs in demand-supply gap and challenges
Extend Pradhan Mantri Kaushal Kendras
foreign languages in demand are French, and professional education and FY 2016. related to skill mismatch with industry
(skill centres) to 600 districts in FY18
Arabic, Mandarin, Korean, Japanese, training31. Skill Loan scheme: It aims to provide requirements.
(currently spread across 60 districts).
German and Spanish. Various universities loans of INR 5,000 to INR 150,000 to
Launch Skill Acquisition and Knowledge and institutes in India offer courses in over 3.4 million youth to develop their With increased thrust on manufacturing
Awareness for Livelihood Promotion these languages from certificates to skills in the next five years25. under the Make in India program, the need
programme (SANKALP) to provide doctorates21. for improving Indias skill development
Digital India: Government of India
vocational training to 35 million youth. mechanism is quintessential. It has been
has initiated a program, i.e., IT for Jobs
Potential for global expansion globally recognized that an efficient
Launch next phase of Skill Strengthening through Digital India in which they
According to the World Economic Forums vocational education and training, will play
for Industrial Value Enhancement provide training to the youth in the
Human Capital Report 2015, India ranks a critical role in the industrial development
(STRIVE) to focus on improving the quality skills required for availing employment
100 out of 124 countries in terms of and manufacturing success. There is a
and market relevance of vocational opportunities in the IT/ITES sector. There
learning and employment of its human scope for international collaboration and
training provided in ITIs and strengthen are eight components with specific scope
capital, while Finland, Norway and assistance in Indias skill development
the apprenticeship programmes through of activities under this initiative:
Switzerland hold the top three positions in initiatives at all levels, including creating
industry-cluster approach. IT Trainings to people in smaller towns
this index. In terms of expanding globally awareness, capacity building, setting
and villages provide training to 10
Impart mason training to 500,000 youth to impart skills, Indian players can focus on standards, improving quality, as well as
million students from remote areas for
in rural areas by 202219. countries with the lowest rankings on the providing placement opportunities32.
IT sector jobs over the next five years.
human capital index. Some of these include
Nigeria, Myanmar, Pakistan, Nepal, Chad,
and Yemen22.
50 51
2. Education
Industry profile Population Pyramid- 2016
80+ 80+
75-79 75-79 Females
Males 70-74 70-74
65-69 65-69
60-64 60-64
55-59 55-59
50-54 50-54
45-49 45-49
40-44 40-44
35-39 35-39
30-34 30-34
25-29 25-29
20-24 20-24
15-19 15-19
10-14 10-14
5-9 5-9
0-4 0-4
For the purpose of this report, Education students enrolled in its schools. It has also 25- the worlds largest- leading to growing 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
Services includes K-12, Higher Education, one of the world's largest higher education demand for education. International Source: Census India, Population Projections Report 2006
Technical Education, and allied services. systems with enrollments of ~33.3 million Labour Organization (ILO) states that by
students in colleges, institutions, across 2020, India will have one of the worlds
India has the second largest education 50,000+ higher education institutes and youngest population, with an average age According to Central Intelligence Agency According to Department of Industrial
system globally, with a network of more 750+ universities. Approximately 50% of of 29 years.33
than 1.52 million schools and 259 million the countrys population is under the age of
(CIA), Literacy rate in India is 71.2%, with
male literacy ratio standing at 81.3% and
Policy and Promotion (DIPP), the total
amount of FDI inflow in to the education
FDI Provisions for
that of females at 60.6% (2015) 34 which sector in India stood at $1.3 billion from Education Sector
is less than the world average of 86.1% April 2000 to December 2016.37
(2015). Government of India (GoI) is also
Population Pyramid- 2011 The government allows 100% FDI
set to boost the education sector by Growth drivers for the industry
in the primary education sector
enhancing government spending as well as A number of enablers are facilitating the
under the automatic route.
encouraging private sector initiatives in the growth of the education sector.
80+ 80+
sector. The governments initiatives such A not-for-profit company
75-79 75-79 Females Demographic dividend: With over 500
as its ambitious target to increase digital incorporated under section 8
Males 70-74 70-74 million people in the age group of 5 to
literacy to at least 50% in the next three of the Companies Act 2013 can
65-69 65-69 24 years, Indias advantage lies in the
years from the current 15%, is also opening receive FDI if it acquires approval
60-64 60-64 huge market for education. Additionally,
up several opportunities for private sector under FCRA (Foreign Contribution
55-59 55-59 India has a population of over 1.3 billion,
to innovate and collaborate.35 Regulation Act).
50-54 50-54 wherein 20 million additional students
enroll every year. With the expected Several foreign educational
45-49 45-49 The Indian education sector is estimated
growth in the population to 1.7 billion institutions have also opted for
40-44 40-44 to reach $144 billion by 2020, from $97.8
in 2050, the demand for education and academic collaborations and
35-39 35-39 billion in 2016, with a large market share of
related services is also bound to rise. partnerships without involvement
30-34 30-34 the K-12 segment (kindergarten through
of FDI through investment in
25-29 25-29 12th grade). The past few years has seen ICT and technological developments:
for profit service/ management
20-24 20-24 significant growth in investments in the The pace of technological growth
companies.
15-19 sector. Technology-enabled education provides ample opportunities to deploy
15-19
infrastructure, and informal education, them in the sector, as also generating The government has now also
10-14 10-14
including, vocational training, pre-school, demands to develop, refresh and permitted 100% FDI in the
5-9 5-9
test prep, child-skill enhancement are upgrade skill levels to keep pace with this construction development
0-4 0-4
key areas wherein investment has been market dynamics. projects, related to educational
13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% incurred.36 institutions, subject to fulfillment
of certain conditions.38
52 53
Demand for skilled resources: With followed by Afghanistan (10%), Bhutan Future prospects for the industry Participation in World-Class Training and facility construction:
increasing sophistication in technologies,
companies demand employees who can
(6%), Nigeria (5%) and Sudan (5%). Several
Indian universities have set up campuses
Partnerships and Education SEZ: Education SEZs will help
institutions initiative: India has had a
noteworthy history in higher education,
Foreign players can also invest in the
sector through course development
deliver outcomes in services like big data, abroad to either attract global talent to its Joint Ventures with in addressing the shortage of quality
higher-education institutions in India
with ancient universities like Takshashila, training for educators, and providing
cloud, analytics, and other specialized
domains, leading to higher demand for
university, or offer expanded exposure to
its students in its home campus (through
private companies and also draw students from other Asian
Nalanda, and Vikramshila, attracting
foreign scholars. In the Union Budget
infrastructure services including
construction/development.
nations and reduce the need for local
skilled workers. twinning programs). The government is 2016-17, the government announced
students to spend large sums of money Tapping the informal market: Significant
also pushing for a Study in India initiative, In 2016, the Ministry of Human its intention of providing an enabling
Rise in awareness: Collective initiatives to study abroad. In FY16, Indian students demand is gaining momentum in the pre-
which focusses on attracting foreign Resource Development (MHRD) architecture to 10 public and 10 private
of governments, NGOs, and private spent $1.98 billion in education-related school market driven by demographics
students to India. The AICTE is also working collaborated with DTH operator institutions to emerge as world-class
enterprises have helped spread overseas expenditure and $2.47 billion and rising incomes and offers substantial
on preparing a management entrance test Dish TV to broadcast 32 educational teaching and research institutions. These
awareness regarding the benefits of in FY15. Despite the presence of large opportunities. Other informal market
modelled on the US SAT exam, for Asian channels on its platform. The universities will aim to bring India at the
education, leading to increase in gross universities in India, Indian students are segments such as coaching (online/ class
and African countries, and then launching channels would also enable live forefront of global higher education, with
enrollments for higher education from spending large amount of money on room) is also a large market offering
it globally.40 telecast of classroom lectures focus on achieving global standards of
17.2 million in FY10 to 30.1 million in FY15. foreign education. Presence of education significant opportunities. For example,
from premium institutions, quality and excellence.
SEZs will act as an added attraction to tutoring in the schooling segment is
Female labor force participation and Government initiatives including IITs42.
foreign education institutions to set up Content development for digital expected to grow from $8 billion in 2011
demand for pre-school facilities: Average government spend on education
campuses in India.45 learning: Indias digital learning market is to $26 billion in 2020.47
Growing number and proportion of has hovered around 3.4% of GDP ($63 In 2015, the MHRD entered into
growing at a fast pace. Use of Information
working women is resulting in need billion) which is less than the average spend a partnership with Tata Motors International universities: At present
and Communication Technologies (ICT) Conclusion and recommendations
for childcare and pre-school facilities. of 6% of GDP by developed and developing Ltd, Tata Consultancy Services Ltd in India, there is no legal and regulatory
in education has led to the growth of India offers significant opportunities
Demand for organized pre-school countries. However, the governments and real-estate firm Hubtown Ltd, framework to allow foreign universities to
digital platforms including smart classes, and advantages in the Education sector
services is also growing in smaller cities thrust on education ensures several to open three Indian Institutes set up campus in India.46
e-learning courses, blended learning, both from the point of view of attracting
and towns. reforms and increase in government of Information Technology (IIITs), In 2016, NITI Aayog had suggested
and app-based learning. Recent industry private and foreign players in education,
spending for this sector, as reflected in through Public-Private Partnership three routes to permit entry of foreign
Demand for informal education: reports have projected the market to as also for expansion of Indian start-
several of its initiatives. The Union Budget (PPP) mode at Nagpur, Ranchi, and education providers
Informal education, coaching institutes more than double - from $2 billion in ups and education providers abroad.
2017-18, allocated $11.9 billion to the Pune 43. A new law to regulate the operation of
and vocational training has been gaining 2016 to $5.7 billion in 2020, as per a As government continues to spend
education sector. such universities in the country.
momentum as individuals seek to Technopak report. This is also reflected huge amounts on education, it is also
Amendment to the UGC Act of 1956
or learn in smaller groups for better MHRD has launched Study Webs of in market trends. For example, Byjus encouraging collaboration with private
and deemed university regulations to
student-teacher ratio, or develop new Active Learning for Young Aspiring Minds will be given on science education, and Learning App caters to 200,000 school sector players to both provide basic
let them in as deemed universities.
skill sets through focused training (SWAYAM), a web portal where Massive flexibility in curriculum to promote and college students, and attracts 30,000 infrastructure and education in under-
Facilitating their entry by tweaking
programs. Open On-line Courses (MOOCs) are creativity through innovative content new users every month. served rural areas, as also in the emerging
UGC and AICTE regulations on
offered. MOOCs is expected to disrupt areas of technology, digital, and quality
Policy initiatives: The government has The government is introducing a scheme twinning arrangements between Twinning programs: Foreign investors
the existing distance learning model. enhancement. Growing demand for quality
undertaken several policy initiatives to promote 20 world class universities Indian and foreign institutions to can also invest in twinning or pathway
It provides affordable and flexible way education at affordable prices acts as the
to improve access to education. A new in India 10 in the public sector which permit joint ventures. programs, wherein a student can
to learn new skills, pursue lifelong foundation stone to recognize MOOCs in
National Education Policy (NEP) 2016 is will receive funding support from the Benefits for foreign universities in India undertake one part of the course with
interests and deliver quality educational India. Keeping this in view, the government
being drafted. Government is also putting government, and 10 in the private Foreign universities with high the one institute and spend equivalent
experience at scale. has made provisions in FY17 budget.
thrust on the sector through its initiatives sector.41 standards will increase competition duration in another partner institute.
such as, Rashtriya Ucchatar Shiksha FY17 Union Budget aims to provide and result in the improvement of Such programs can be implemented
Digital India: Digital India is a flagship Through the Right to Education Act and
Abhiyan and the World-Class University entrepreneurship, education and training higher educational standards in India. through collaboration or a partnership
programme of the Government of several related initiatives (SSA, RMSA,
initiatives.39 via MOOCs. The focus is on getting as There would also be gains in terms agreement.
India with a vision to transform India RUSA), the policymakers are looking to
many as 2,200 colleges, 500 government of availability of resources both
into a digitally empowered society and Collaboration for technical education: universalize access to education. The New
Potential for global expansion industrial training institutes, 300 schools human and financial, state-of-the-art
knowledge economy. Under the program Subject to the AICTE Regulations, foreign Education Policy, which is expected to
According to UNESCO 2015 data, the and 50 vocational training centres on teaching methodology, research and
following initiatives are taken: institutions/universities can award focus on addressing gender discrimination,
number of Indian students in foreign board for this initiative. innovation.
All schools connected with broadband. degree, diploma, post graduate diploma creation of educational tribunals, and
universities stood at 234,000, while India Capital expenditure for setting up
Additionally, as part of the Right to Free Wi-Fi will be provided in all and post diploma in technical education, strengthening education in the rural
hosted merely 39,000 foreign students an institution is high. Entry of foreign
Education Act, it has mandated the secondary and higher secondary by partnering with Indian institutions or areas, is also on the anvil. Digital learning,
in its universities and colleges. According universities and ease of FDI norms
appointment of a special educator for schools (coverage would be around on their own. supported by the governments Make in
to All India Survey on Higher Education will offset some of these costs.
children with learning disabilities so 250,000 schools). India and Skill India campaigns will provide
(AISHE) 2015-16, foreign students in
that they can be assimilated with other Pilot MOOCs (Massive Online Open further impetus to this sector.
India come from 165 countries, but the
students. Courses) launched through SWAYAM
top 10 countries constitute 62% of the
portal.44
total foreign students enrolled in higher Proposal for introduction of a new
education institutes. The highest share system of measuring annual learning Start-up India: Many start-ups are
of students come from Nepal (21%), outcomes in schools, wherein emphasis entering to support education programs
in remote rural locations.
54 55
3. Banking & Financial Service

Industry profile Growth drivers for the industry
Demand side
Services and Insurance, and have a
need for cost effective infrastructure,
Focus on Aadhaar and other digital
payment initiatives
technology and talent to serve their
Level of financial services penetration Aadhaar, the single largest digital identity
global parents. Indian GICs today are
remains low, albeit with significant growth solution in the country is now covering
setting the stage in the development of
potential: While India is the fastest ~95% of the Indian population. Aadhaar
India as a source of strategic benefits,
growing economy in the world, significant numbers have been used to open bank
cost benefits and talent arbitrage. Large
potential for financial services growth accounts and mobile phone accounts.
scale technology development in India,
exists, given penetration of financial
have enabled a paradigm shift toward Paperless (Digilocker) Digital records
services (bank loans/GDP, bank assets/
Fintech. Growth in the Fintech space are available in the cloud, eliminating
GDP and mortgages/GDP) as compared
as a result, is positioning India on the dependence on paper and storage. India
to global peers shows significant room
global stage as an attractive investment Stack is a revolutionary example. A series
for improvement.
destination. Parent organizations that are of secure and connected systems allow
Growing Income levels: Average seeking value out of GICs, are increasing data sharing. It creates an e-KYC (creation
household income in India grew by a investments in talent, processes and of a central KYC where any customers
CAGR of 4.83% between 2005 and 2014. innovative technologies. KYC details available to all banks). It will
lean on the subsequent three initiatives
Consumer behavior is evolving:
Government and RBI initiatives to make the digital economy work
Consumers becoming more connected,
India is undergoing changes with a series seamlessly.
digitally influenced, more informed and
of initiatives propelling the economy to a
more demanding. Presence less (Finger Prints, Retina Scans)
higher growth rate.
allow participation in any service from
India is a preferred destination for Financial India has 24 life, 29 non-life insurers In the recent past, Foreign Investment Supply side anywhere.
Services. The Indian financial services including 5 pure play health insurers. Other Promotion Board (FIPB) has cleared 15 New Bank Licenses
market consists of banks, GICs, insurers, stakeholders in Indian Insurance market FDI proposals including large investments Disruptive innovations: Digitization is an Cashless (Aadhaar Enabled Payments
Liberalization through the financial
mutual funds, NBFCs, MFIs and Fintechs, include agents (individual and corporate), in the insurance sector, leading to a opportunity for banks that respond to Systems - AEPS) Aadhaar Pay, a
inclusion initiatives of the RBI in the
etc. Two new banks were launched in 2015 brokers, surveyors and third party cumulative investment of $1.09 billion. the changing environment. For instance, merchant version of AEPS, was launched
form of the issuance of banking licenses,
and a host of new small finance banks and administrators servicing health insurance Insurance Regulatory and Development FinTech is emerging as strong contenders to enable those who do not have debit
allowing several new players 2
payment banks have started operations claims. Authority of India (IRDAI) has given initial to banks, globally, and in India. Omni- cards, mobile wallets and mobile phones
Universal Banks, 8 Payments Banks (of
recently/will start operations. Non- approval to Swiss, French, and German Channel Banking allows banks to to make digital payments.
the 11 licenses granted by RBI, 3 have
performing assets (NPA) issue has plagued Indias life insurance sector is the biggest reinsurers to open branches in India. use technology to manage consumer
surrendered it) and 10 Small Finance Consent (E-Signatures) give secured
public sector banks in recent times and in the world with about 360 million Both banking and insurance in India has interactions across multiple channels.
Banks - to enter the banking space access to documents.
government has taken corrective measures policies which are expected to increase seen good growth in the past, and this Transacting via smartphones, allows
in India and challenge the existing
to address it. at a CAGR of 12%-15% over the next five trend is expected to continue because of consumers a fair degree of mobility. One million biometric PoS machines
paradigms.
years. The insurance industry plans to hike various supply and demand side factors. (Micro-ATMs) were expected to
Strong government and regulator
penetration levels to 5% by 2020. Universal banking license is now available be installed by March, 2017 and
push: Government and regulator push
on tap. subsequently scaled to two million by
on digital, increased FDI limits, NPA
September 2017 as per Union Budget
management are expected to aid the
Demonetization 2017. By bringing banking to peoples
Figure 4: Banking Assets, Loans and Advances (INR 000 billion) growth of the financial services sector.
120 doorsteps, these Micro-ATMs have
110 Removal of existing currency notes of
Increased competition: Entry of new revolutionized digital payments by saving
INR 500 and INR 1,000 from system in
Loans and Advances: 19.23% 96 96 banks expected to put pressure on customers time and costs.
November, 2016 in order to flush out
Deposits: 17.8% traditional players who will be forced
black money. Unified Payments Interface (UPI) is
Banking Assets: 17.13% 69 94 to innovate in order to survive. The
60 85 changing the face of digital payments
74 74 traditionally preferred branch banking Resulted in huge deposits at banks and
52 72 in India by bringing everyone to the
43 67 channel, has experienced a significant corresponding decline in interest rates
35 56 59 digital net. By using smartphones, it is
53 shift. In the payments market, cash and
29 48 43 Fillip to demonetization in the budget: No facilitating instant transfer of funds under
41
33 35 credit cards are being replaced by digital
27 25 30 transaction above INR 200,000 permitted INR 100,000 to Aadhaar number/mobile
22 20 options.
15 in cash subject to certain exceptions49 . number/virtual address (without IFSC
Strategic arbitrage of GICs: India with code) across multiple banks.
Expected to encourage use of digital
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1000+ GICs, accounts for roughly 50%
payment platforms and bring Indias Launch of the Bharat Interface for Money
of all GICs worldwide. Indian GICs
cash to GDP ratio down to single digits (BHIM) app, allows UPI account to non
contribute ~25% of the Global offshore
Loans and Advances Deposits Banking Assets (It has reduced to 8.17%50 from the UPI account transfers via QR code. This
market. Their revenues in India in
pre-demonetization figure of 10.6%51 ). is expected to bring digital solutions to
2016 stood at $22 billion48. ~40% of
Source: RBI Financial services players are likely to masses in cost effective ways. Payments
these GICs are in Banking, Financial
fast-track their digital plans. can be made without using mobiles,
56 57
simply via fingerprints and Aadhaar The Parliamentary Standing Committee Expected to allow timely resolution of Focus countries/Funds for outward Institutions in February 2016. One
number. Compatibility with a 2G platform on Finance (SCF), released a report on stressed assets, and allow refinancing of investments pertinent recommendation was the Revival
extends access of digital payments to a better tackle NPAs with suggestions on assets. By cleaning the existing balance of Development Financial Institutions for
Capabilities built in India are very relevant
wide user base and allows the BHIM app merging banks having higher NPAs with sheets of Banks, room will be created for financing of long term projects including
across Middle East, South East Asia, and
to achieve its potential by invigorating our other banks, RBI to play a larger role fresh credit, which is an imperative for a infrastructure projects.59 These measures
Africa and players from these countries
population. in managing NPAs via follow through bank-dependent, growing economy such are expected to rationalize credit risk and
can learn from Indias experience.
with Banks and improve credit approval as India. reduce NPAs.
Emergence of fintech in challenging
process of Banks, Facilitating recovery of The RBI has allowed Indian alternative
traditional models such as alternate
NPAs including restructuring of loans in a Potential for global expansion investment funds (AIFs), to invest abroad, GICs will need to align to new expectations
lending, mobile wallets, etc.
manner so as to preserve the economic India is among the top ten investment in order to increase the investment on their operating model. GIC industry
value of assets, Making names of willful destinations globally and the Services opportunities for these funds. is witnessing fundamental shifts in the
Focus on NPA Management
defaulters public. sector, the most attractive for these operating structure, driven by higher
Indian banks are also looking to tap the
Recent Asset Quality Review exercise, investments. FDI equity inflow has been expectations from onshore.
New Insolvency and Bankruptcy Code, global diaspora in other countries.
conducted by the RBI increasing within the BFSI subsector (of
2016 (the Code) for faster resolution of
the services sector) over the years, and Conclusion and recommendations
INDRADANUSH for revamping of public insolvency cases including strengthening Future prospects of the industry
improved relations with the top investing Indian Financial services market is growing
sector banks of debt tribunals. According to IMF World Economic Outlook
countries can strengthen domestic capital at a rapid pace, fueled by both demand
Update (January 2016), the Indian economy
Consolidation of public sector banks Affordable Housing has been reclassified in this sub-sector. side as well as supply side factors. As
is expected to grow around 7%-7.5% during
as infrastructure. So far, Banks have the entire ecosystem is growing to serve
Legal framework has been strengthened FY 2016-17, despite the uncertainties in the
been the primary source of funding Recent deals also suggest increased the diverse financial needs of a large
and INR 100,000 million has been set global market.
for the infrastructure sector. With the interest from new geographies such as population, which so far did not have
aside to re-capitalize banks to deal with
Infrastructure status, developers can Canada and Japan. In addition, inward access to basic financial services, it is
stressed assets52 The launch of new banks is expected to
access foreign funds at a cheaper cost by investments from Multi-lateral institutions/ throwing opportunities for all stakeholders
integrate social media, mobility, analytics,
Government has enhanced/liberalized way of debt and will be a priority lending Sovereign Wealth Funds (SWFs) in the BFSI to participate in this growth. Players across
cloud and IoT. Digital Wallets, NFC,
FDI in asset reconstruction companies for banks as well. space are bringing financial services to the the entire value chain are experiencing
Blockchain, Social data and analytics,
(ARCs) to 100% under-served. Some distress funds are also these tailwinds, and this has attracted
Aadhaar and UID integration in the financial
showing interest in the bad-loan portfolios foreign investors, established business
services space. Mobile based Micro-
of banks. groups, Fintechs and alike to financial
payments are expected to be a growth
services. Increasing and strengthening
area in the times to come.
domestic capital in the BFSI sub-sector,
Table 1: Top 5 countries for inward investments is leading to banking sector stability and
Use of technology to reach bottom of
economic growth in the country.
Country 2014-15 2015-16 2016-17 Cumulative Current 2000-15 2000-15 For improved pyramid is expected to result in an even
(April- (April- (April 16- inflows from State (% of (Jan-Dec), (Jan-Dec), relations larger impact on the financial landscape
As governments, regulatory bodies,
March), March), December all sectors cumulative Service BFSI Sub of the country, from the last round of
technology providers, banks, and
$ Mn 53 $ Mn54 16), $ Mn55 (April 00- 16 year FDI Sector *, Sector **, the licenses in 1994 and 2002, and may
insurers join hands to serve the needs
December inflow from $ Mn58 $ Mn prove to be a game changer for the entire
of the population, India is expected
16), $ Mn56 all sectors)57 ecosystem, benefitting customers, players
to see an exponential growth in this
and the regulator.
Mauritius 9,030 8,355 12,819 108,729 34% 18,921 10,418 Further space, overcoming the hurdles of access,
liberalization availability and affordability.
A host of innovative partnerships are
of FDI policy expected to emerge between these new
Singapore 6,742 13,692 7,115 52,994 16% 9,141 5,033
is under players and traditional financial services/
consideration non-financial services players across
US 1,824 4,192 1,940 19,884 6% 3,258 1,794 Will result in channels of delivery, third party products,
ease of doing customer facing capabilities, etc.
business in
UK 1,447 898 1,266 24,374 8% 2,979 1,640 India Regulatory initiatives towards rationalizing
NPAs, in the last year included, standard
Netherlands 3,436 2,643 2,500 19,814 6% 2,667 1,468 asset categorization, joint lending forums,
strategic debt restructuring, forensic
reviews, and early warning systems. In an
Notes: effort to reduce NPAs, the Parliamentary
*Services sector includes Financial, Banking, Insurance, Non-Financial/Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis Standing Committee on Finance (SCF),
** Country specific BFSI nos. are calculated based on the assumption that 55% is the share of BFSI across all countries per 2000-2015 figures submitted its report on NPAs of Financial
58 59
4. Healthcare Service
Industry profile Figure 6: Per-capita healthcare expenditure ($) the initiatives around a common ground
where their mutual social and economic
68.6 aspirations can be met.
61.0 58.0 61.0 61.9
54.0
Potential for global expansion

India is however rapidly becoming an
important hub for medical treatment
2010 2011 2012 2013 2014 2015 among the under-developed and
developing markets with its growing share
Source: IBEF of best in class corporate hospitals, and
sees a large number of foreign nationals
Medical Value Travel Increase in jobs for many in the life sciences and availing of health services in India. The
foreign citizens traveling to India to medical technology space, it will reduce medical tourism in India is currently
avail medical services. Presence of the cost of these devices, which were so $3.9 billion in 2016, and is expected to
world-class hospitals and skilled medical far imported (with the associated import touch $8 billion by 2020, having grown at
professionals has strengthened Indias duties). This cost reduction will play its a CAGR of 27% over 2013-1666. Majority
position as a preferred destination for way down the chain and reduce the of the patients coming to India for
medical tourism. Treatment for major healthcare costs for the end consumers, treatment are from the Middle East,
surgeries in India costs only a fraction strengthening the lever of affordability. Africa, Bangladesh, Afghanistan, Maldives,
as low as 10% in some casesof that in Pakistan, Bhutan and Sri Lanka. Indias cost
Digital India a push for use of digital advantage will significantly open doors to
developed countries65.
technologies has also positively impacted US and Europe over future, due to lower
The overall healthcare landscape spans employment with total direct employment Growth drivers for the industry
healthcare sector. Digital money (cards, cost than the US and almost half that of
across productsnamely pharmaceuticals, of 4.7 million people in 201561. Healthcare There are several factors, on both demand Supply side
e-wallets, UPI, etc.) has opened up Europe. There is also a growing demand
medical consumables, medical equipment delivery constitutes 65% of the overall as well as supply side that are acting as
Availability of capital: Keen interest various payment options for patients to for Indian medical talent and know-how in
and devices, and servicesnamely delivery Indian healthcare market. catalysts for this industry.
among investors (Indian and foreign) in pay for healthcare services. geographies that are lacking in advanced
of healthcare through diagnostics and
Indian healthcare market, leading to entry medical infrastructure, and several players
treatment. Indias healthcare delivery landscape has Demand side Start-up India With tax incentives to
of more and more players. in African countries are approaching
historically been dominated by government startups and incubation support under
Large, ageing population- Increasing life
Healthcare delivery essentially covers hospitals, one-off hospitals or nursing Different business models being tried this initiative, the wave of healthcare- Indian players to help them set up and run
expectancy is causing an ever-increasing
the services provided to consumers homes (owned and run either by charitable e.g., the rising popularity of single- based startups remains strong, covering hospitals, both as advisors as well as O&M
population of aged people. Elderly
(patients in this case) through the entire trusts, or self-owned by doctor-promoters). specialty clinics, day-care centers, etc. aspects such as diagnostics, fitness and partners. This is adding to the exports
population, currently classified as those
lifecyclepreventive (also referred to as It is only in the last two decades that wellness, aggregation of health providers, bucket.
aged 80 and over are set to rise from the Rising interest of corporate houses to
wellness), curative (diagnostics, primary India has seen a surge of large healthcare electronic medical records, video/
current 98.9 million to about 168 million enter the healthcare space, which was
care, secondary care, and tertiary care players, often corporate houses, enter remote consultations, second opinion Future prospects for the industry
by 202663. hitherto considered a social service, and
provided at hospitals or health centers, for the healthcare delivery space and setup consultations, etc. Going forward, healthcare in India will
hence many of the corporate houses witness further strengthening of the
both chronic and acute health issues, and large, tertiary/quaternary care hospitals High incidence of non-communicable
have entered the healthcare arena. Public-Private Partnership (PPP) growth drivers.
recuperative (home healthcare including which compare with world class hospitals diseases, such as obesity, diabetes,
Government has initiated partnerships
nutrition, physiotherapy, post-op care). in other parts of the globe. Overall, the cardiovascular, chronic obstructive Innovations in medical technology
with private players to deliver healthcare Talent
healthcare delivery market still remains pulmonary disease (COPD), etc. on the making it possible for more and more
services in a few specific areas. For There is a surge in the number of
The healthcare revenue globally was very fragmented, with the 5 largest hospital back of people/conditions to be treated.
example, O&M of a few hospitals, running medical education institutes. Private
$7 trillion in 201560, and it is $110 billion players together covering around 35,000 Sedentary lifestyle (lack of physical
medical ambulance services, running institutes are coming up all over the
in India in 2016, and is expected to grow beds, which is 1% of the total hospital beds exercise), increased stress Government initiatives
healthcare-related helplines, etc. While country, which are expected to supply
to $280 billion by 2020. Indian healthcare in India62. Over 85% of the hospital beds in Poor dietary habits (junk food) Many government initiatives are directly
the government can act as the payer, the skilled workforce that will power the
sector became the fifth largest employer, India are present in facilities with less than Pollution benefitting the healthcare sector.
the execution and delivery of services healthcare institutions of the future.
both in terms of direct as well as indirect 25 beds.
Increase in disposable income, aiding Skill India The Healthcare Sector may be provided by private players Task shifting will multiply the resources
affordability of healthcare services. Skill Council (HSSC) has been set up to who are experts in the field. In turn, the available for each task the industry
During 2015-19, per capita income aid skilling and vocational training for government would need to hold the is expected to figure out the right
Figure 5: Trends in Healthcare sector ($ billion) is expected to increase at a CAGR of healthcare industry and its growing need players accountable by measuring them education/skill level for performing
280.0
8.09%64. for human resources. This is expected to against pre-decided and pre-agreed each task.
provide a new talent pool to the industry service standards (SLAs). But the nation Medical insurance penetration
Awareness leading to focus on
110.0 to fuel its growth. is yet to fully leverage the PPP model
81.3 diagnostics, preventive health checkups. As the medical insurance market
45.0 59.5 72.8 to deliver healthcare services to the
Led by access to internet, and other Make in India promoting manufacturing matures in India, not only will the
population at large. The PPP model will penetration increase, there will be
media such as television and radio. of medical equipment, devices,
2008 2010 2012 2014 2016 2020F require both the government and private innovation in the products too. For
consumables and drugs in India. Not only
players to come forward and structure instance, cover for out-patient services,
Source: IBEF will this creates an entire ecosystem and
60 61
5. Information Technology
cover for senior citizens. These will
further propel demand for and
Medical Value Travel
As Indian healthcare industry is
Industry profile
affordability of healthcare services. able to establish its quality through
Rise in health insurance penetration clinical outcomes data published in
According to the latest National credible health registries (such as by
Sample Survey data, with Centre-run ICHOM International Consortium
Rashtriya Swasthya Bima Yojana (RSBY), for Health Outcomes Measurement),
insurance coverage has improved the insurance payers of developed
over the years, but still only 12% of the countries will start working with Indian
urban and 13% of the rural population health facilities, attracted by the dual
had access to insurance cover67. value of low-cost and high-quality. This
The IRDA has introduced the concept will open up a completely new market
of transferring the current insurer to serve.
to another without losing out on any
e-Health
benefits. This regulation will also allow
The government initiative under
a consumer to port from one retail
e-health aims to provide effective and
plan to another retail plan; applicable
economical healthcare services to all
to both individual and family floater
citizens by making use of technology
policies. This concept is yet to gain
and portals. It will facilitate citizens
momentum, once done it has the
to maintain health records and book
potential to change the landscape of
online appointments with various
health insurance in India. The Indian information technology Figure 7: IT Sector overview
departments of different hospitals
industry has progressed over the years, Wide Presence
Tele-medicine using eKYC and Aadhaar number.
from being a provider of cost effective
The problem of access will be solved The Indian IT sector has its
Dental tourism technology talent for global enterprises
to a large extent through the use of presence in 200 cities of 86
Dental tourism accounts for 10% of the to being a strategic partner helping
modalities such as telemedicine, tele- countries across the world.
medical tourism and the government businesses in technology enabled Share in GDP
radiology, e-ICU. As the broadband FDI inflow
is keen to promote it. India provides business transformation. The Global The IT/ITES sector
quality increases in the interiors of
competitive cost advantage at one- Delivery Model approach, pioneered by contributes 9.5% The software &
the country, through the deepening
tenth of the cost of the US and Europe. the Indian IT services industry wherein to the countrys hardware sector
network of fiber optics across the
complex technology projects are broken GDP and more in India attracted
length and breadth of the country
Conclusion and recommendations down into sub systems and modules than 45% in total cumulative FDI
(National Fibre Optic Network), this
Healthcare services in India are growing at that are delivered by a mix of consultants services export in inflows worth
will be a reality, and will give the rural
a rapid pace, fueled by both demand side working onsite, closer to customer, and 2015-16. $21.02 billion
population access to services that were
factors as well as supply side. As the entire in near-shore/offshore locations became between April
hitherto limited to only those in urban
ecosystem is growing to serve the health one of the most impactful business model 2000 and March
centers, such as access to specialists
needs of a large, aware and demanding innovations in the past few decades and 2016
and super-specialists.
population, it is throwing opportunities set the benchmark for the knowledge
Technological advancement and for all stakeholders to participate in this industry value chain across the world.
innovation growth. Players across the entire value Organizations across industries such as Offshore
Largest
M-Health: This will create new chain are experiencing these tailwinds, and Aerospace, Automotive, Energy, Pharma, Service
Private Sector
opportunities and business models. this has attracted investors, innovators, Bio tech, Semiconductors, etc. leveraged Leader
Employer
The use of mobiles for accessing startups and established business groups this phenomenon and established global A preferred
health-related information or alike to healthcare. research and development (R&D) and The IT and ITeS
destination
consuming health services will be a product development networks to access sector employs
for IT & ITeS
reality, coupled with wearables for As governments, regulatory bodies, local talent and market opportunities, 3.7 million
in the world;
tracking health metrics. educational institutions, technology thereby building a network of global PE/VC investment people and it is
continues to be
Data Analytics: Electronic medical innovators and core providers join hands knowledge value chain through a mix of in- the 4th largest
a leader in the IT & ITeS companies
records (EMR) will open up a new trend to serve the needs of the domestic and house centers and partnership networks. urban women
global sourcing attracted 45% share of
of data analytics for predictive analysis. international population, India will see employer.
industry with the total investments
an exponential growth in this space, Favorable policies of government to 55% market which is almost $7.5
overcoming the hurdles of access, support the industry like Software share billion (across 396
availability and affordability. Technology Parks of India (STPI), special deals).
economic zone (SEZ), The New Telecom
Policy (NTP 1999) and IT Act 2000 over the
Source: Deloitte Analysis
years, and other support infrastructures
62 63
helped establish Indias leadership position On the demographic front, the industry a means to enable public governance Figure 9: Domestic and Export IT and ITeS revenue in $billion Figure 10 Major IT exports market
in the global technology sourcing market also helped create a generation of and citizen services through technology
and in the process, catalyzed the growth of technology savvy population, comfortable enabled interfaces. Investments in creating UK
EU
services sector in India across education, with using technology enabled tools in such public technology infrastructures such
healthcare, tourism, financial services, day to day life. Taken together with the as Digital India, Skill India, Make in India 11% 17%
transportation, hospitality, and other contemporaneous advancements in leveraging the industrys talent ecosystem
services. IT services industry ecosystem telecommunication networks, services, along with the industrys adaptability 108
has played a part in helping India leap frog and the smartphone penetration, this to emerging technologies like machine 98.5
from an agriculture driven economy to a convergence of technology, telecom, and learning, artificial intelligence, automation, Exports market
services driven economy. content perfectly set the stage for the next block chain, virtual reality, etc. will broadly 86 $108 billion
76
wave of technology enabled business such define the narrative for this industry in the 69
as e-commerce and consumer internet coming decades. 59
50
industries in India, and also provided
US
48 52
32 32 32 62%
24 29
Market segments
FY10 FY11 FY12 FY13 FY14 FY15 FY16
Figure 8: Market segments
Domestic Exports
IT Services Business Process Software Products Hardware E-Commerce
Management & Engineering Source: NASSCOM
Market size: $75 Market size: $13.5 Market size: 17
billion Market size: $28 Market Size: $26 billion billion
billion billion Competitive profile delivery presence in these locations Government initiatives
Export: $61 billion Export $0.5 billion Major market:
Indian vendors face competition from to cater to the near shore market. In Digital India: Indian IT services sector can
Export: $24 billion Export: $22 billion Domestic
Domestic: $14 Domestic: $13 both large global service providers as well the current environment countries like support and have a major role to play in the
billion Domestic: $4 Domestic: $4 billion as niche firms and startups in frontier Philippines, Vietnam, Malaysia, and eGovernance and eKranti pillars of Digital
billion billion technologies. Latin America and Eastern Indonesia are also emerging as potential India, drawing on talent and the experience
Major market: Major market:
European countries traditionally competed destination for delivering cost effective IT/ in supporting digital transformation
Global Major market: Major market: Domestic
with India for near-shore and offshore BPO services. projects in the western markets.
Global Global
Export revenue: delivery infrastructure, and most large
81% Export Revenue: Export Revenue: vendors from India have established
85% 83%
Figure 11: Digital India IT Initiatives

Source: ITSR 2016, NASSCOM and Deloitte Analysis
Digitizing business processes of government to improve transactions, simplifying them as well

The IT BPM sector generated revenue of to touch $1 trillion by 2023 driven by growing at a CAGR 13.5%73. North America eGovernance as reducing the lengthiness of procedures.
$143 billion in 2016 with exports of $108 domestic and global growth70. The GDP is the major destination for IT exports and Reforming
billion and the domestic contribution was contribution has changed dramatically in generates 60% of the export revenue. government Interface between departments and online application submission and tracking systems.
$35 billion68. The domestic IT-ITeS market the last two decades and currently the Europe contributes 25% of export revenue through Building and using online repository for school certificate, voter ID cards
is $52 billion which includes $17 billion sector contributes 9.5% to the Indian GDP out of which almost 50% comes from UK. technology
e-Commerce sector along with domestic (FY15) in comparison to 1.2% in FY9871 and Dollar is the invoice currency constituting Integrating UIDAI, Payment Gateway, Mobile Platform and EDI to various systems
IT sector revenue69. Notwithstanding the also plays a significant role in generating 75% of the exports followed by pound
current global headwinds and changing employment for almost 3.7 million people72. and euro74. There is significant growth in
geo-political discourse on globalization, The sector comprises of 4 major sub the domestic market since FY14 driven by Internet based educational infrastructure across schools.
the sector has good prospects in the segments and majority of the revenue government initiatives like Digital India, Digitizing health services, consultancy, record, patient information etc.
medium-long term, and is expected comes from export. The export market is Smart City etc. eKranti
Technology for farmers to access real time price information, order inputs and make financial
Electronic
transaction online.
delivery of
services Promoting mobile based emergency services.
Technology and systems for financial inclusions like mobile banking, micro-ATM program and
CSCs / post offices.
Source: Digital India
64 65
Make in India: Indias Engineering R&D global powerhouse in ER&D services. By delivery by providing Aadhaar-based Figure 13: Potential Markets
services sector, which is among the fastest leveraging the emerging manufacturing verification, paperless e-KYC, cashless
growing sub sectors within the IT/BPM and industrial ecosystem enabled by Make transaction, secure storage of digital Cloud Services IoT Cyber security
ecosystem, can benefit from the policies in India initiative, India has the potential to documents, and electronic signature of Global cloud market: $208.6 billion Global IoT market : $1.7 trillion by Enterprise security spending
and support infrastructure provided become the global leader in Engineering documents76. 2020 (hardware, software and services) in
by Make in India initiative to establish R&D. Indian Cloud Market: $ 16 billion by
Presence less layer: Where a universal India is around $1.12 billion in 2016,
Indias leadership position in the global 2020 Indian IoT market size: $15 billion by
biometric digital identity allows people to up 10.6% from $1.01 billion in 2015
R&D services market. Global market for Skill India: The Skill India initiative has 249 2020
participate in any service from anywhere Growth Drivers for IT services: and is expected to reach $1.24 billion
ER&D services is traditionally dominated Training Partners, 3,222 Training Centers Growth Drivers for IT services in 2017
in the country Digitisation
by service providers from France and across India. People can search for training
Germany, who have built their capabilities partner and course, access e-content, Paperless layer: Where digital records High IoT security spending ($348 As per gartner, India Security Market
Payment sector
by leveraging the local manufacturing provide feedback, and locate the nearest move with an individual's digital identity, million in 2016) is expected to grow 10.6% in 2016
and industrial ecosystem in European CSC and post innovative ideas. It provides eliminating the need for massive amount Government services
Digital India
markets. In recent years, service providers vocational training and certifications of paper collection and storage Aadhaar, e-KYC
from India have emerged as preferred to students to make them eligible for Security Services
Cashless layer: Where a single interface
partners for global R&D services sourcing, employment. This initiative is a big boost
to all the country's bank accounts and Source: NASSCOM, Gartner, IDC, Deloitte Analysis
and a few major service providers from for the IT services sector which requires
wallets to democratize payments
India are among the Top 10 vendors more skilled human resources.
in the global ER&D services market75. Consent layer: Allows data to move freely Some of the key trends driving digital Potential for global expansion78 Baidu, and Tencent could herald the
Taken together with Global In house Mapping IT services to India Stack: India and securely to democratize the market disruption across industry segments are In addition to the domestic market in next phase of digital adoption among
Centers (GICs) of MNCs across industries, stack is the innovation around digital for data below: India, APAC is a large and underpenetrated traditional enterprises thereby driving
India is fast emerging as a regional and services in India for efficient service market for Indian IT vendors that could the growth of technology services in this
Banking and Financial Services
provide the next phase of growth market.
increasing investments in digital banking
amidst geo political headwinds in the
Figure 12: API's for India and fin-tech solutions as India moves Australia Software, technology
western markets. Japan and China are
towards cash less economy outsourcing, and consulting are
among the largest technology spenders
Aadhaar eKYC UPI Digilocker eSign expected to be among the major areas
Telecom Integration of data and in APAC region, an opportunity that
of investments in Australia79 and Indian
Enabler platform Verification portal Payment gateway Cloud service Cloud service content ecosystem, enabled by high could be profitably addressed by Indian
vendors are well positioned to capture
(APIs) (APIs) speed connectivity through 4G/5G technology vendors leveraging their
Security Storage and Platform the emerging opportunities in these
technologies decades of expertise in delivering complex
Interface Bank interface security segments, taking advantage of their
Storage transformational projects for western
Manufacturing digital manufacturing, capabilities in consulting and digital
Database Wallet services Connectivity markets.
automation, Industry 4.0 technologies.
Security Japan at $248 billion in 2017, Japan
Retail E-commerce and consumer ASEAN countries countries like
is the largest market for technology
internet products from startups Thailand, Indonesia, Malaysia, Philippines,
Source: IndiaStack goods and services in APAC region. In
Vietnam, and Singapore collectively
Healthcare Digitization of health Japans mature market for technology
account for a sizable market for
records, Tele medicine the next phase of growth could come
technology goods and services, and
from operational technologies like IoT,
Future prospects for the indsutry ER&D services: At $26 billion, ER&D and policies and support infrastructure are among the fastest growing markets
Domestic and other emerging markets: machine data analytics, and automation
Indias structural advantages such as large product development services is among envisioned under Make in India initiative, for technology in APAC region. Largely
The domestic market in India has a high as businesses tend to focus on
pool of cost effective STEM talent (science, the fastest growing sub segments within India can emerge as a global leader in hardware and telecom equipment driven,
potential of growth driven by digital operational improvements to enhance
technology, engineering, and mathematics), the larger IT-BPM industry, employing R&D and product development services spending on software is expected to
economy initiatives of the government, productivity. These are the areas where
high quality research institutions, MNC R&D close to 477,000 people and a 28% market industry. raise by 9% and outsourcing by 12% in
along with digitisation and automation. Indian IT vendors have made significant
centers, rising smartphone and internet share in the global sourcing market. This 201780. These markets are also being
The digital transformation drive by the investments in the recent years and are
penetration, along with public sector sector is expected to reach $35 billion to Digital transformation: Increasing explored as alternative destinations for
government such as Digital India, Skill in a better position to address
investments in digital economy initiatives in $40 billion revenue by 202077 supported adoption of digital technologies like cloud, setting up ITeS services like business
India, e-KYC, JAM Trinity etc., creates huge
India, would enable the industry to address by the emerging trends in core engineering mobility, and IoT across industries and China The second largest market process management on account of the
demand for IT and ITeS services in the
domestic and global opportunities in verticals like Industry 4.0, automation, the requirement for robust cyber security for technology goods and services in availability of cost effective talent. ASEAN
country and provides new opportunity for
digital transformation, along with emerging hybrid vehicles, autonomous driving, infrastructure provides an interesting APAC region, after Japan. Traditionally a markets can be explored by Indian IT
the vendors.
opportunities in frontier technologies. robotics, 3D printing, IoT, and machine data growth opportunity for the service major market for telecom and hardware vendors for both talent, as well as market
analytics. After Europe, India is the second providers as the demand for traditional equipment, the recent successes of opportunities.
largest sourcing location for global ER&D services becomes stagnant. digital native companies like Alibaba,
services, and by leveraging the favorable
66 67
6. Next Gen Citie

Conclusion and recommendations
Investments in frontier technology:
Industry profile
Increasing investment focus in emerging
technologies such as Artificial Intelligence,
Machine Learning, Automation, reducing
dependence on traditional services, and
strategic investments in global markets
through a mix of local hiring and M&A
would help Indian technology vendors
address emerging opportunities.
Incentives for domestic R&D Increasing

incentives for creating products and
intellectual property in emerging
technology areas will help Indian
companies provide cost effective solutions
for the global B2B technology market,
which is currently dominated by the US and
European vendors.
Ease of doing business in India:

Simplifying technology procurement Rapid urbanization in India has led to In April, 2015 the GoI approved the Smart far been qualified for the implementation
processes and program management for increased pressure on existing municipal City Mission to develop 100 smart cities phase of the Mission. These 60 cities are
government procurement would provide infrastructure like energy, water supply across the country with an outlay of INR likely to spend INR 1450+ billion ($22 billion)
a major boost to the industry and help & distribution, sewerage, transportation, 480 billion over a period of five years. over the next five years for implementing
vendors profitably address emerging digital energy consumption and other urban Subsequently, the Prime Minister of India Smart City Plans. The envisaged investment
economy opportunities in India. amenities. It is expected that nearly 600 launched the Smart City Mission on 25th from 100 cities is estimated at INR 2500+
million (40%)81 population will be residing June, 2015 with the Ministry of Urban billion ($40 billion).
As the technology outsourcing market in Indian urban areas by 2035. This has Development (MoUD), GoI as the nodal
steered the Government of India (GOI) agency for creating these Next Gen Cities. Role of ICT Industry as key services
matures, Indian IT Services industry is
to undertake a number of measures, sector
going through a transformation, to IT
aiming to transform Indian cities through The Smart Cities Mission is an innovative Based on the Smart City proposals
Services 2.0. While phase one was about
urban renewal and technology infusion initiative by GoI to drive economic growth received so far, approximately, 30% of the
decades of double digit growth at high
catapulting them among the global Next and improve the quality of life of people by investments proposed under the smart
margins leveraging global delivery model
Gen Cities, the most important of which is enabling local development and harnessing city mission is envisaged in ICT, one of the
through cost effective platform, phase
the flagship Smart Cities Mission (SCM). technology as a means to create smart key service sectors in the country. The key
two will see Indian vendors help global outcomes for citizens. Since the launch of sectors of this investment is presented in
enterprises in their strategic business Mission in 2015 about 60 cities have so the diagram below82:
transformation through digital services
using an optimized delivery infrastructure, Figure 14: Key sectors for investment under SCM Transport
and also profitably address digital economy Sector Level Others Smart Cards (for multi-modal use)
Transport
initiatives in India helping bring technology Spending 9% Smart traffic management system
23%
for billion plus people. IT Services 2.0 has Water Social Infra
the potential for Indian Industry to redefine 8% Telemedicine for urban poor
and shape global technology market, Smart Classrooms
and also catalyze the domestic economic Energy
growth across sectors. The policies we Waste Smart metering
envision today should help the industry Management Energy efficient smart street lighting
achieve this transformation in a sustainable 8% Security
manner. CCTV network
Security Command and control centre
9% Social Infra Waste Management
19% Smart bin management
Real time fleet management
Water
Housing Energy Piping network management system
11% 13% Automated remote metering
Source: Smart Cities Mission, Ministry of Urban Development, Govt. of India and Deloitte Analysis
68 69
The role of ICT in the Smart City Plan services (energy, water, sewerage, solid Transport System for transportation, Some of the major innovative and smart Figure 16: Components of ITS
is essentially an amalgamation of hard waste management), transportation, Government to citizen services like online solutions proposed in these sectors have
Transit Management
infrastructure (Physical infrastructure education and healthcare services, and information related to public grievances, been presented below:
and social infrastructure) and Information soft infrastructure like SCADA system death and birth, vaccination and school Fleet Management
Technology based innovative solutions, for energy, water and sewerage, Global dropouts through citizen information Intelligent Transport System (ITS): ITS (AVL/CAD)
i.e., design, development and management Positioning System (GPS) based solid waste management. is a broad range of wireless and wired Arterial Passenger Information
of hard infrastructure like utilities and management, smart parking and Intelligent communications-based information and Management System Incident
electronics technologies, which when Management
Advanced Signal
applied to the current transportation
Systems Video
Figure 15: Key ICT Solutions proposed in Smart City Plans system, can help improve safety, reduce
Transit Signal Surveillance &
congestion, enhance mobility, minimize
Priority Detection
Next Gen City environmental impacts, save energy, and
promote economic productivity. It is a cost- Emergency Traffic
effective strategy that further enhances Vehicle Management
the Bus Rapid Transit (BRT) experience. Preemption Centre for
ITS is the application of advanced Intelligent Information
Bicycle &
communications and technologies Transport Dissemination
Domains
Pedestrians
to transportation systems providing System
E-Governance Safety & Transportation Solid Waste Energy Water advanced monitoring, control and traveler
Surveillance Management information capabilities that allow better
real-time management of roads and transit Emergency
Traveler
systems. The major components of ITS is Management
Information
presented in the figure alongside. Emergency
E-Service Threat / Smart Waste Power Water Variable
Traveler
Delivery Crime Traffic Collection Transmission Sourcing ICT based Energy Efficient Lighting: Message
Information
Management Management & Distribution & Quality As a part of Smart Networking Concept Signs
System
Monitoring for rationalizing maximum usage of LED Electronic Payment
lights which would in turn positively & Pricing
Disaster Smart impact the energy savings and electricity Advanced Fare
Sub - domains
Management Parking Waste consumption bills, the concept of sensor

Smart Water Collection System
Handling & based monitoring of city lighting system Source: Deloitte Analysis
Transactions Distribution
Smart Toll Processing has been introduced. Centralized Control
Smart Street
& Fare Monitoring System (CCMS) will comprise
Lighting Future prospects for the industry Smart Railway Stations: A smart railway
Management of a wide variety of sensors, including IR,
Digitization irrespective of the sector will station is essentially a redevelopment
ultrasonic, light, illumination, voice, and
be the key element for next gen economic project encompassing easy access to
Hall sensors, which can be integrated into
Smart Public growth for any spatial region. However, stations, improved passenger amenities,
Public Grievance a microcontroller unit-based LED lighting
Emergency Transport when it comes Smart Cities the key driver integrated public transport hub, waiting
Management system helping in detection and processing
Management Management is investment in urban infrastructure halls and other amenities for passengers,
of various types of signals for energy
and working towards introducing smart development of residential & commercial
efficient operation of the LED lighting
Integrated Command & Control Center solutions. Some of the key future smart spaces, landscaping etc.
system.
Data Analytics solution prospects with a combination of
improved urban infrastructure and ICT are Smart Campuses: A Smart Campus
Solid Waste Management through
Source: Smart Cities Mission, Ministry of Urban Development, Govt. of India and Deloitte Analysis discussed below: solution is a software application
Innovative Technologies: Geo-coded
integrated with innovative technologies
and sensor tagged waste collection bins
Smart Villages: A Smart Village aims like Smart card, Biometrics, Barcode,
to relay key information like location of
to provide sustainable and inclusive and Interactive Voice Response System
containers, time and date of collection,
development to all sections of its (IVRS). It comprises of a set of modules
status (lifted or not lifted), weight, etc.
community, ensuring a high standard which help in application & admission,
GPS tracking system will enable real-time
of living. It focuses on empowering local administration, student services, staff
monitoring of collection fleet, on-time
self-governance, providing access to services, examination, library management,
waste pick-up and efficient route allocation.
assured basic amenities and responsible fee management, student profile and
Further, challenges related to improper
individual and community behavior to build Management Information System (MIS)
waste disposal can be mitigated through
a vibrant society with partnership from dashboard.
sensor based sorting system for separating
individuals, NRIs, elected representatives,
waste particles resulting in high recovery &
corporates and business houses, NGOs,
purity rates.
philanthropists, etc.
70 71
7. Start-ups / SME in Service

Once, Smart City based infrastructure is
Industry profile
developed to a certain level in the 100
cities, the next step would be to explore
the potential towards developing intercity
networks and creation of smart regions
including smaller towns (smart towns/
regions) and rural areas (smart villages),
thereby increasing the user base for
the provisioned infrastructure, profiting
through economies of scale. The crucial
factors that will play a pivotal role in the
next generation of city reforms will include:
Cities/States to develop enabling policies

for creating an improved eco-system
for implementing smart solutions in city
context.
Development of innovative financial

models/monetization models for funding
both Cap-Ex and Opex.
Innovative ICT based solutions including Micro, Small and Medium Enterprises IT/ITeS industry. This industry created a Smartphone and internet
(MSMEs) have been the engines of Indias robust ecosystem of Science, Technology, penetration as of 2016, there are
cloud hosted solutions for improving
development for several decades, making Engineering and Mathematics (STEM) 367 million internet users85 and almost
urban governance and service delivery
significant contributions towards economic talent in India, and also a new demography 300 million86 smartphone users in India.
can be packaged in the form of mobile
growth and job creation. There are around of consumers comfortable in using The Internet subscriber base is expected
applications and can be made available
51.1 million MSME units across India out of technology enabled interfaces for day to to reach 730 million by 202087 while the
for a cluster of cities with real time
which about 55.3% are based in semi urban day business transactions. Supported total telecom subscriber base will reach
updates ensuring better urban services,
and rural areas providing a distributed by contemporaneous advancements in 1.4 billion88 in the same period. This
increased economic growth and
development model in a large and diverse mobile phone and internet penetration, provides a new platform for companies
improved quality of life.
country. The sector represents 38% of the the market was ready for new services to reach their customers through mobile
Capacity building of the city countrys GDP (out of which 8% comes and innovative business models that first services.
administration for ensuring long term from manufacturing while 30% comes from used technology for disrupting traditional
sustainability. services83), contributes 40% of the total industries and value chains to provide Risk capital - As successful technology
exports, 45% of the overall manufacturing superior value to the consumers. The early platforms enjoy a natural monopoly
output and employs around 100 million successes of such services in e-commerce status in the markets they operate in,
people84. The sector traditionally faced and consumer internet sector generated there is considerable interest from
challenges in adequate and timely access interest among global investors on the the investor community to fund such
to risk capital, non-availability of skilled larger potential of such services. Taken opportunities that uses technology
labor and technology, ineffective marketing together, technology and risk capital enabled platforms and interfaces for
and distribution networks, and stringent started a new wave of SMEs in India reaching a larger market.
regulations and compliance requirements enabling the development of what is now
that made it difficult for SMEs to leapfrog widely known as the start-up ecosystem in Defining a Start-up
into the big league. the country. The Start-up India Initiative by government
of India has defined start-ups in India.
SME to Start-ups the transition enabled Key enablers: Provided that such entity is not formed
by technology and assess to risk capital by splitting up, or reconstruction, of a
Commoditization of consumer business already in existence. Provided
technology rapid advancements in also that an entity shall cease to be a start-
In the past decade, as information
digital technologies and large scale up if its turnover for the previous financial
technology industry grew at a rapid pace
adoption of digital services like social, years has exceeded INR 250 million or it
across the world transforming business
mobile, and web based services around has completed 5 years from the date of
processes and creating efficient value
chains through seamless information the world commoditized the building incorporation/registration89.
exchange. India also capitalized on this blocks required to build and operate web
opportunity through the home grown scale IT systems.
72 73
Figure 19: Geographical Cluster

An entity, incorporated in India
Should not be more than five years old Delhi NCR (e-commerce Hub) Pune (Health Tech Hub)
With annual turnover not exceeding INR 250 million in any preceding financial year, and 30% total e-commerce Start-ups 4 out of 10 Health-tech Startups
Type: Leading Type: Emerging
Working towards innovation, development, deployment or commercialization of new products, processes or services driven by No. of Startups: 1175+ No. of Startups: 300+
technology or intellectual property B2B: 25-30%, B2C: 65-75% B2B: 40-50%, B2C:50-60%
Funding: $1,050 million Funding: ~$200 million
India: fastest growing start-up around 2,50,000 people by 2020. The no. of cities such as Kochi, Kolkata and Jaipur
ecosystem tech start-ups in India is expected to reach are also emerging as important start-up
As of 2016, there are more than 10,000 10,500 by 2020. The sector has witnessed destinations due to low operational costs,
startups in the country out of which 46.5% CAGR growth between 2010 and cost effective workforce, and efficient local
around 4,750 are in the technology sector. 2016 in terms of number of start-ups. infrastructure. Together Kochi, Kolkata and
The technology based start-up sector is Average age of start-up founders in India is Jaipur attracted $350 million in 2016. While
growing by 10-12% Y-o-Y making India the just 28 years and the sector has 9% female there are more than 110 start-ups present Mumbai (Emerging Fin-Tech)
3rd Largest start-up ecosystem in the founders. in Kochi, Kolkata and Jaipur are the home to 30% Fin-tech Funding
world after US and UK. India has added almost 125+ start-ups91. Type: Leading
more than 1400 tech start-ups in 2016 Emerging geographical clusters: No. of Startups: 800+
Hyderabad (Infotech)
with a Y-o-Y growth rate of around 8-10% In addition to the traditional start-up B2B: 30-40%, B2C: 60-70%
Technology MNCs
and employed around 100,000 people hubs such as Bangalore, Delhi-NCR, Funding: ~$750 million
Type: Emerging
in start-ups90 and is expected to employ Chennai, Mumbai, Hyderabad, and Pune, No. of Startups: 400+
B2B: 35-45%, B2C:55-65%
Funding: ~$300 million
Figure 17: Top Tech Startup Countries Figure 18: Start-up Growth in India
10,500 Bengaluru (Silicon Valley of India)

40% Overall Funding Chennai (B2B Dominated)
Type: Leading 55-60% B2B Startups
US No. of Startups: 1300+ Type: Emerging
52,000 B2B : 35-40%, B2C: 60-70% No. of Startups: 275+
Funding: ~1,350 million B2B:55-60%, B2C:40-45%
4,750 Funding: ~$200 million
4,100
3,100
Source: NASSCOM: Indian Start-up Ecosystem Maturing, Report 2016
2,200
Start-up UK
ranks 4,900 480
Startup Growth Start-up Lifecycle and Funding a bigger brand or is consolidated with a the start-ups fail within the initial 5 years
A start-up goes through multiple stages in larger entity. The Business risk varies in due to the risks associated with products
2010 2013 2014 2015 2016 2020 (e) its life time before it matures and becomes each stage, and an estimated 70-80% of and the market.
India
4,750
Source: NASSCOM: Indian Startup Ecosystem Maturing
Figure 20: Lifecycle of Start-up Ecosystem
Discover Product
Source: NASSCOM: Indian Startup
Validate Efficiency Growth Mature
Development
Ecosystem Maturing
Product/Service Minimum Development Monetization Product market Profitability

ideation Viable Product expansion
Customization Wide customer Risk: Medium
Target market Risk: Medium base Risk: High
Risk: High
Risk: Low Risk: High
74 75
As start-ups navigate these stages in and the capital for the growth stage and PE deals between January and December of start-ups are increasingly focusing on had difficulties in accessing timely funds for
their growth journey, the requirement late stage is typically provided by Private 2016. There is a decrease of around 55% providing domain specific solutions for capex and working capital requirements at
for capital and the associated risk-return Equity investors, each having their own in the start-up funding in comparison to the larger market opportunity across competitiive rates. While the governments
expectations also vary across these return expectations commensurate with 2015 which managed $9 billion. Whereas sectors such as agriculture, education, initiatives to improve this situation aimes
stages. Early stage risk capital is typically the business risks in the respective stage. the number of deals has increased by 3% in finance, healthcare, and manufacturing. to address the gaps, support from the
provided by founders themselves, angel Indian start-ups managed to generate $4 comparison to 201592. The technology infrastructure envisaged larger ecosystem players in terms of timely
investors and venture capital investors, billion funding across 1,040 angel and VC/ under digital India program such as JAM payment of invoices would help start-ups
trinity, Aadhaar enabled payments, UPI manage their working capital cycles in an
interface, etc. along with the private sector efficient manner and thereby increase their
Figure 21: Global perspective initiatives such as India stack are expected chances of survival in the initial years.
to provide the necessary platforms and
infrastructure support for these start-ups Ease of doing business early stage
to build large scale solutions for the core companies traditionally faced challenges
industries. related to complex regulatory and
compliance requirements in Inida. While
Innovation and R&D: India has always the policy steps envisaged under Startup
been a leader in frugal innovation. India initiave such as self certification,
Startup rank: 1 Startup rank: 2 Startup rank: 4 Startup rank: 5
Our cost structures and purchasing public procurement guidelines, and
Startups: 52,000 Startups: 4900 Startups 4600 Startups: 4300 power parity helps us build high end tax exemptions provide the necessry
technology at globally competitive costs, framework to ease the regulatory and
Large global talent pool Good connectivity Young population Large workforce
as demonstrated in our success in atomic compliance burden of start-ups in their
understands leadership
High spending capacity Access to global talent Cheap labour and and space research. But compared to initial years, support from the respective
pool Great technological Infrastructure our global peers, India lags considerably state and municipal administrations is
Presence of tech giants
training in institutionalizing R&D, as shown equally important in reducing the red
Easy funding and liberal Wide presence in
in the number of patent applications tapism and encouraging start-ups from tier
regulations Innovative ideas international market
filed. India has 45,568 patents in 2015 2 and tier 3 cities solving local problems.
in comparison to Chinas 1.1 million Indian SMEs and start-ups have always
Source: NASSCOM, Deloitte Analysis patents97. By increasing investments in demonstrated their resilience in surviving
R&D and monetizing it through patents and and thriving in challenging business
products, Indian start-ups can profitably enviroments. While the policies and
Government initiatives million in 201693. With the Governments institutions.
address broader opportunities in the support infrastructure envisioned
Digital India: Increasing investments plan to impart skill training to 400
Innovation and R&D: A fast-track system global market, at significantly lower costs under Startup India program aims to
in digital economy initiatives provides million people by 202294, sectors such as
for patent examination at lower costs compared to their global competitors. help start-ups in their initial stages of
opportunities for start-ups in India to eLearning, and eMentoring will be the key
is being conceptualized by the central growth, the larger cultural implication
provide localized solutions for the larger enabers of such large scale transformation
government. Industry collaboration Indias large and of such large scale initiative to promote
market. and start-ups in this space can take
active entrepreneurship ecosystem can entrepreneurship is in inspiring the young
advantage of this opportunity to reach a Funding Support and Tax exemption:
benefit largely from engaging closely with population towards creating jobs and
Key enablers include: larger market. Initial corpus of INR 25 billion and a
the large and established companies in participating in the economic growth and
planned corpous of INR 100 billion
NOFN: The nationwide broadband their respective sectors and across sectors. nation building. The long term benefits of
Start-up India: Start-up India initiative over a period of 4 years95. Start-ups are
network which will connect 250,000 While start-ups benefit from the talent such demographic transormation would
provides the necessary regulatory exempted from income tax for a period
Gram Panchayats will be a big boost for and market access, large enterprises can help secure Indias leadership position in
and policy support to promote of 3 years.
start-ups to reach rural population. gain in niche technical and subject matter the emerging global order.
entrepreneurship and support start-ups in
Research Parks/Start-up Centers: expertise along with the ability to address
Aadhaar e-KYC: The Aadhaar based their initial years of existance. Key initiavites
Government plans to set up 7 new emerging opportunities faster. Though
authentication (e-KYC) provides an easy include
Research Parks in institutes with an initial companies in the technology sector are
way to do business with authentication of
Compliance Regime based on Self- investment of INR 1 billion each. It also more proactive in engaging with start-
customers.
Certification: Objective is to reduce the plans to setup 13 start-up centers and 18 ups, companies in traditional sectors
Cloud Platforms: accelerating the regulatory burden on start-ups thereby Technology Business Incubators96. should also start exploring such start-up
adoption of as-a-service business models allowing them to focus on their core engagements for a mutual success.
business and keep compliance cost low. Future prospects of the sector
Skill India: The Skill India initiative could Market opportunity: While the first phase Capital though technology start-ups in
Online portal and mobile application:
be a good opportunity for the emerging of start-ups focused on the e-commerce ecommerce, consumer internet, and
Single platform start-ups for interacting
Edutech sector which has more than 180 and consumer internet sectors targeting enterprise software segements are fairly
with Government and other regulatory
companies, and managed to attract $170 the urban population, the next phase successful in accessing risk capital, SMEs
and start-ups in traditional sectors have
76 77
8. Media & Entertainment

Industry profile India is the worlds second largest television
market with 181 million99 television
and remaining 34.04% from advertising.
TV penetration reached 64% of total
households in 2016 and 892 television households in 2016. As is evident in the
channels100 (as on 30 Nov 2016). Television graph below, there has been an increase
industry generated total revenue of $9.6 in the share of digital cable and direct-to-
billion (INR 641.8 billion) in 2016 with home (DTH) as a result of digitization.
65.96% share coming from subscription
Figure 23: Split by type of TV Subscribers
22
15 19
44 55 79
37
55
90
65
41 5
2015 2016E 2020F
Analog cable Digital cable Pay DTH Free DTH

The Indian Media and Entertainment (M&E) is one of the industries identified by the
industry is a sunrise sector with a rapid government under Make in India initiative.
Source: IBEF
growth curve. The market size of M&E The key sectors of M&E industry are E: Estimated, F: Forecasted
industry in India is estimated to be $20.5 outlined below:
billion98 (INR 1,370.63 billion) in 2016. M&E
Figure 24: Television Industry Revenue Share (%)
Figure 22: Segmentation of M&E Industry 2016E
Print 34.04 % 33.24 %

Films
23.21%
12.07%
66.76 %
Digital 65.96 %
Advertising
Films
6.17%
Animation & VFX 2016E 2020F

6.17%
Print
3 largest
sectors
Subscription Revenue Advertising Revenue

Gaming
2.34% Television
Source: IBEF
E: Estimated, F: Forecasted
Outdoor Advertising
2.15%
Radio
1.78%
Television
46.92% Music
0.92%
Source: IBEF
78 79
The Ministry of Information and India is the biggest newspaper market In terms of revenue, the sector has gross Table 2: Information and Broadcasting FDI inflows (January-September 2016)
Broadcasting (MIB) has mandated that with 110,851104 registered publications as box office realizations of $2.06 billion (INR
all analog networks be replaced with on 31st March 2016. Print sector is the 138 billion)105 in 2015 which is expected to Sub sectors INR million $ million % of Total inflows
Digital Addressable System (DAS) which second largest segment and market size grow at 11% CAGR reaching $3.56 billion
Radio Broadcasting Plan 56,459.80 837.09 2.6
is scheduled to be completed in four was estimated at $4.76 billion (INR 318.25 (INR 238 billion) by 2020. Domestic box
phases. Viewers can access digital services billion) in 2016. Growth is expected in office contributes majority of the revenue, Print Media 69.17 1.03 0.0
only through a set top box (STB). Phases regional print and local news segments. representing 74% for the sector.
Films and Entertainment 15,886.58 236.92 0.74
I and II, which focused on Indias major
metro markets (except Chennai) and 38 Film sector is the third largest sector in Another sector that has witnessed Sector total 72,415.54 1,075.04 3.34
Tier I cities, have been completed. The M&E industry. The Indian film industry is tremendous growth over last few years
Source: FDI Equity Inflows 2016, DIPP
revised timeline for Phase III was January the largest in the world in terms of number is the Animation Industry. Key growth
2017 (earlier December 2015), while of films produced between 1,500 to 2,000 factors include increased usage of
Phase IV is expected to be completed by films produced every year in more than 20 technologies such as 3D videos, movies, Growth drivers of the Industry Government initiatives
31 March 2017101. languages. games and commercials. This has resulted
Rising incomes and evolving lifestyles Make in India
in creating significant job opportunities for
The cable TV market is highly fragmented animators and developers. Cities such as Rapidly growing young population Promote Foreign Films shooting in India
with more than 230102 permanent Multiple Mumbai, Pune, Chennai, Bangalore and coupled with increased usage of 3G, 4G
Develop technical skills for film production, post production, and VFX
System Operators (MSOs) to operate in Trivandrum are emerging as animation and portable devices
DAS registered with MIB and more than hubs. To encourage the growth of this Explore additional film treaties
Government initiatives and policies such
50,000103 Local Cable Operators (LCOs). sector, state governments have proposed
as Make in India, Digital India Digital India
animation, visual effects, comics and
gaming (AVCG) parks on SEZ model. Implementation of proposed GST will Digitization of cable television in 4 phases to attract institutional funding, improve
Figure 25: Films: Category-wise break-up of revenue result in transparency in the transactions. profitability and value chain.
100% FDI is allowed in television sector There are many transactions where
including cable TV network, DTH. 49% the input taxes paid are not available Strengthen the sectors such as video streaming, online music consumption and
Cable and
FDI (under approval route) is allowed for as credit and are regarded as tax cost. gaming by increasing internet penetration.
Satellite Rights
13% up-linking of news and current affairs TV Likewise, many transactions attract dual Give consumer better control in terms of subscription choices. It will also lead to
channels. tax levies. GST should address this issue increase in ARPU and subsequently increase in broadcasters share of subscription
of cascading and dual taxation impact revenues.
100% FDI in film sector is allowed under
Increase in FDI inflows on account of The Budget reinforced India's huge shift towards digitization especially with the
automatic route which has encouraged
liberalization in policy proposed deployment of high optic cables to increase internet penetration in rural
overseas studios to set-up presence in
Overseas India/co-produce films. Animation, visual effects (VFX), gaming India. This is a big positive for content creators as it will boost the digital content
Box Office and digital advertising emerging as fast consumption across online and mobile platforms.
7% 26% FDI (under approval route) is allowed growing sectors Further impetus on digital payments and transactions will eventually help the
for publication of newspaper/periodicals subscription model.
International/foreign films gaining box
and Indian edition of foreign magazines
office share
Domestic dealing with news and current affairs. Skill India
box office Ancillary Revenue 100% FDI (under approval route) is allowed
Potential for global expansion Increase productivity of the existing workforce in M&E sector
74% Streams for publishing/ printing of scientific and
technical magazines/specialty journals/ Potential for global expansion of Indian Develop technical skills for film production, post production and VFX
5%
periodicals and publication of facsimile M&E industry with the US, UK and China.
Create employment opportunities - 1.2 million skilled workforce by 2022
edition of foreign newspapers.
Home India to enter into co-production treaty
Videos with the US to promote co-production of
1% films.
Source: Deloitte publication on Indywood: The Indian Film Industry FDI policy liberalized in the information
and broadcasting sector. Roadshows Future prospects for the Industry a number of startups, leading production
can be conducted in the US and the UK houses and also several international
Shift towards Internet-based delivery players foraying in the market.
to promote investment in Indian M&E
platforms: Over-the-top (OTT) platform
sector. Visual effects (VFX) and Animation
that uses internet as a medium to
Expansion of footprint in terms of distribute content is emerging as a Services: India is considered as the most
distributions of channels by Indian business model. Disruptive pricing sought-after destination for animation
broadcasters in overseas countries. announcements on unlimited data and and VFX services led by cost efficient,
aggressive internet plans have benefitted high quality service, affluent workforce
Expansion of territories for distribution of and presence of hi-tech animation
the OTT sector. This sector has witnessed
Indian films.
80 81
9. Sports Service
studios. Entertainment conglomerates
are increasingly outsourcing animation
has also proposed to set up center of
excellence with state-of-the-art facilities
Promoting India as a filming destination:
India should consider to adopt a globally
Industry profile
and special effects to India. Furthermore, along with AVCG parks on SEZ model108. recognized standard to boost film
cost of animation production in India is shooting across various locations in
Under Penetrated Multiplex Screens:
one fourth of North America and about India. The government must provide
India is still under penetrated in terms
35%106 lower than countries such as quick approvals to help filmmakers get
of screens which means there is a huge
Korea and Philippines. In addition, several all clearances. The government should
scope of growth for the film sector. With
Indian studios have been successful ensure ease for obtaining approvals,
the proliferation of multiplex screens
in establishing a strong footprint in availability of local talent, production
coupled with technology to conveniently
international markets. resources and adequate infrastructure
book tickets, footfalls are expected to
facilities for attracting foreign producers
Promoting India as a filming increase. Many foreign players have
to shoot films in India.
destination: Ministry of Information expanded their base in India by acquiring
and Broadcasting has set up the Film a controlling stake and increasing the Grant infrastructure status to
Facilitation Office (FFO) to facilitate number of screens across the country. broadcasting sector: Broadcasters
efficient approvals and improving the and distribution platforms should be
Broadcasting channels in overseas
ease of shooting in India. Filmmakers can accorded infrastructure status so as to
countries: On account of huge Indian
expect clearance between 6-8 weeks, obtain better and affordable financing
population residing overseas, there is
depending on the shooting location. India options in the present capital-intensive
an opportunity for Indian broadcasters
has signed film co-production treaties growth phase.
to expand their footprint overseas
with 11 countries (UK, Spain, Germany,
by broadcasting channels in such Enter into more co-production treaties
Canada, New Zealand, Brazil, Italy, France,
countries. Apart from the above, content for incentivizing co-production of film: Sports sector in India has seen a speedy Figure 26: Diverse Stakeholders
Poland, China, and most recently, South
syndication now extends to local In order to widen the reach of Indian growth over the past few years with
Korea) providing a huge opportunity for
audiences as well. cinema, the Government of India must increasing investments from corporate
growth. Negotiations are on-going to
explore additional film treaties that would houses in sports properties and events,
finalize the agreement with Australia.
Conclusion and recommendations help in boosting the film industry as well expanding spectator base and rising
Collaboration with international studios: as developing skills in the local talent number of sports television channels. Franchise
Improving screen density ratio:
Over past few years, international film pool. The global sports market is estimated to (clubs)
Investors
Screen penetration in India at present
studios have collaborated with local film be worth $480-620 billion110 in 2015. The Leagues (team
is significantly low at 6 screens per owners)
production houses to develop Hindi and sports sector includes different segments 4
million109. Many single screen cinemas
regional movies. Local film production such as sports tourism, sporting goods 3 5
have been shut down due to high
can leverage the experience of these (in manufacturing and retail), sports
operational cost, non-viability of running
international studios to expand their medicines, sporting management and
on a standalone basis and low occupancy Regulatory Broadcasters
international reach and incorporate sponsorship. bodies 2 6
rate. Government should consider and sponsors
enhanced project planning and cost
providing financing support through However, the Indian sports market is still
controls.
tax holidays in respect of conversion of at a nascent stage and accounts for a
Gaming as a hot spot: With increase single screen to multiscreen, extra floor meagre 2%111 share in the global sports
1 7
in smartphones usage, adoption of space index and access to capital at lower market. The number of stakeholders Sports
3G/4G internet network, India is poised interest rates. Conversion of 75% of the Government management
involved in the Indian Sporting industry authorities
to become one of the worlds leading existing single screens into two screen companies
continues to increase with the advent of Diverse
markets in gaming sector. To encourage multiplexes can unlock revenues of INR new leagues. The below diagrams depict Stakeholders
the growth of this sector, incentives 40-50 billion for the film industry through the key stakeholders involved in sports
are provided by state governments, for higher average ticket price, occupancy management. In India most of the sports Source: Deloitte Publication
Source: Deloitte Publication
units in SEZ. The State Government of rate and advertising and food and marketing spend comes in the form of
Telangana aims to set up a Center of beverage revenues. sponsorships and advertising during sports
Figure 27 : India Sports Sponsorship Market (INR billion)
Excellence107 with state-of-art facilities to events.
Skill development in M&E: There is a
promote gaming, animation, media and
scarcity of formal training institutes and
entertainment sector. To boost the start- In 2016, the Indian sports sponsorship
creative technologies in India. Currently,
up ecosystem in the state, Government market grew 19.3% to INR 64 billion112
most of the personnel are trained on
of Telangana, in association with Software ($0.95 billion). The money flowing into 64.00
the job or self-trained. There must be a
Technology Parks of India (STPI), has sports sponsorship is mainly from five
concerted effort by the government and 53.63
created an incubation center dedicated segments - on-ground sponsorship, media
industry to develop training institutions
for animation, visual effects, comics spends, team sponsorships, franchise fees
with proper financial and infrastructure and endorsements. 2015 2016
and gaming (AVCG) industry start-ups.
support. Source: ESP Properties Sportz Power report
In addition the Karnataka Government
82 83
Figure 28: Breakup of Sports Sponsorships in India (INR billion) 2016 Government initiatives117 Sports Tourism
35.11
Mega sporting events121 such as
"Khelo India" (National Programme for Development of Sports)
the Hockey World Cup and the 19th
28.17
Develop sports infrastructure in both rural and urban areas Commonwealth Games (both held in
New Delhi in 2010), along with the ICC
Guiding and nurturing of the talent through assistance to SAI Training Centres and
Cricket World Cup held in 2011 attracted
Academies and State Government training centres/academies
a number of tourists and sports
Setting up of new academies both in public and PPP Mode. enthusiasts. India will also stage the
Under-17 football World Cup in October
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2017 that will boost sports tourism.
Develop sports infrastructure especially playgounds owned by Government schools Simultaneously, there has also been
a marked rise in the number of tour
To promote sports in rural areas and providing them with basic materials such as operators and agents specializing in
11.56 volleyball nets, cricket materials, football etc. servicing the requirements of this
10.31 particular tourist segment. Even
Rashtriya Yuva Sashaktikaran Karyakram (RYSK)
mainstream tour operators have set up
7.0 Flagship program of MYAS to enable youth to realise their potential separate divisions to tap the potential of
5.48 5.41 5.58 sports tourism.
4.76 New umbrella scheme which consolidates Nehru Yuva Kendra Sangathan
4.16
NYKS), National Youth Corps (NYC), National Programme for Youth & Adolescent Sports medicine is another area that is
Development (NPYAD) and National Discipline Scheme (NDS), National Young highly underpenetrated. By providing
Leaders Programme (NYLP) treatment at a very competitive rate
equipped with latest in-house laboratory
Endorsement Franchise Team Sponsorship Ground Sponsorship Media Spends
services and professional staff, this
segment offers a huge opportunity for
2016 2015 Future prospects for the industry Sports Education and Skill
growth in sports tourism.
Sports Facilities and Infrastructure Development
Service
Source: ESP Properties- Sportz Power Report It is estimated that about 1.33 million120 Sports Marketing and Management
The emergence of new leagues and young people are likely to take up sports Services
Of the total sponsorships, media spends The Ministry of Youth Affairs and Sports Potential for global expansion teams have driven the need for as their full time profession by 2017 in
The growth and development of the
accounted for 54.8% share followed by on- (MYAS), under the Government of India is MYAS has MOUs/agreement116 pertaining infrastructure development sporting India. MYAS is implementing various
Indian sports industry is creating
ground advertising/sponsorship (18.2%), implementing various projects through the to sports with Australia, France, venues. Recently, MYAS gained the projects through the Sports Authority of
opportunities for management
team sponsorships (10.9%), franchise fees Sports Authority of India (SAI). At present, Hungary, Kazakhstan, Kuwait, Maldives, approval of Ministry of Corporate India (SAI) to find new talents.
professionals in a wide variety of
(8.5%), and endorsements (7.4%). there are 70113 STC (SAI Training Center) Mauritius, Netherland, New Zealand, Affairs (MCA) for inclusion of sports
Accordingly, there is a huge demand of settings. New sports initiatives require
Cricket continues to dominate sports with a total strength of 1183 trainees (775 Seychelles, Turkey and Turkmenistan. infrastructure, construction and
coaches and trainers for different sports. professional human capital to speed
sponsorships in India. The growth in boys & 408 girls). These agreements have strengthened maintenance as part of CSR activities118.
Several Indian corporates and renowned up its growth. But in India, availability of
sponsorships was also due to emergence cooperation and have contributed Several Indian corporates like JSW, Indian sportspersons have already professional sports managers are less or
of new non-cricket sports leagues Indian In Union Budget 2017-18, the Sports to enhancement of sports and social Reliance Foundation and Tata Group opened state-of-the-art academies with minimal.
Super League (ISL), Pro Kabaddi League Ministry was allocated a total of INR 19.43 development. have opened modern facilities to train modern facilities and services to train raw
(PKL), World Kabaddi League, Champions billion114 ($288 million), compared to INR students through various programs119. talents. Some are listed below: Creation of Digital Assets and Content
Tennis League and Indian Premiere Tennis 15.92 billion ($237.6 million) last year given Another potential area of expansion is Gopichand Badminton Academy (OTT Platforms)
League. Kabaddi was the growth driver in that Indian athletes are preparing for that of South Asia Association for Regional Several MNCs like Business Club
Prakash Padukone Badminton Academy
Australia, Hockey Australia are also Over-the-top (OTT) platform that uses
2016 on back of a two-season Pro Kabaddi Commonwealth Games and Asian Games Cooperation (SAARC) nations that has been Bhaichung Bhutia Football Schools
investing in infrastructure development. internet as a medium to distribute
League and India hosting the Kabaddi in 2018. a part of PM Narendra Modis vision. South Mary Kom Boxing Academy
Well-known clubs like FC Bayern content is emerging as a business model.
World Cup in Ahmedabad. Asian Games (SAG) is a biennial multi-sport Bhiwani Boxing Club
Munich (Germany), Barcelona (Spain) Disruptive pricing announcements on
Recently in Oct 2016, the Union Finance event held among the athletes from SAARC Netaji Subhash National Institute of
and Manchester United (UK) have also unlimited data and aggressive internet
Further, there has been a significant Ministry has approved inclusion of countries viz. India, Sri Lanka, Bangladesh, Sports
collaborated with local clubs. plans have enabled Indians to increasingly
increase in female audience that now forms sports in the harmonized master list of Afghanistan, Nepal, etc. The 12th South Mahesh Bhupathi Tennis Academy
watch sports content online. Indias active
a large segment of the growth story. The infrastructure sub-sectors115 to be eligible Asian Games was held in Guwahati and (MBTA)
OTT video subscribers are expected to
online sports audience has expanded for obtaining long term financial support Shillong in 2016 wherein India secured 308 Gun For Glory Shooting Academy
grow to 105 million122 by 2020. starsports.
too, fueled by better mobile and internet from banks and other financial institutions. medals including 188 gold medals. Sehwag International School
com, Liv Sports, starsports.com, Neo
connections and affordable data plans.
Sports already have OTT platforms123
dedicated only for sports.
84 85
Sports Data Analytics124 new experiences. India having a diverse sports promotion among the specially
geography provides extreme adventure abled. More initiatives must be taken for
The popularity of data driven decision-
activities like sky diving, mountaineering, identifying and nurturing their sports
making in sports is increasing. Every
trekking, bungee jumping, mountain talent. The Government must also provide
major professional sports team either
biking, river rafting, rock climbing and various incentives in form of sports quota
has an analytics department or an
deep sea diving. With rising demand, in jobs, financial assistance, pension and
analytics expert on staff. Teams often
the number of tour operators offering cash rewards to give an impetus to them.
have to scan scout notes from clipboards,
specialized packages in this category
convert those PDFs to Excel, and then
have also increased. Structured sports education with
hand those files over to data developers.
special emphasis on sports medicine:
There are now entire websites dedicated Another category that will witness growth
Priority should be guiding and nurturing
to the research and analysis of sports is that of fantasy sports. In India, fantasy
talent through existing sport academies
statistics and how they relate to a sports is called game of skill which is
and new set up either by Government
prediction in performance. outside the purview of gambling. With
or State Government in PPP model. The
rising number of sports enthusiasts,
Government must emphasize more on
Fan Engagement internet penetration and usage of
opening of sports universities in different
smartphones, India would be an obvious
Sports franchises in India are taking states likewise the proposed National
destination and business choice for
several initiatives to increase fan Sports University in Manipur. It should
fantasy sports operators. Nagaland126 is
engagement. While it was traditionally also incentivize sports medicine segment
the only state in India that has issued
just in-stadium and TV but at present by setting integrated diagnostic, pre-
online gaming licenses for skill games
fans are touched digitally through web, habilitation, treatment, rehabilitation
including fantasy sports.
mobile, content sites (own and third- services for sports injuries.
party) and numerous social channels.
Other touch-points include merchandise Increase bids to host events: The
Grant industry status to sports sector:
sales, F&B POS, online sales channels, Government must encourage bidding to
The Government should grant industry
third-party operators for tickets, tours, host mega sport events in India in order to
status to sports sector which will increase
etc. Other initiatives include starting a boost tourism and increase exposure to
the participation of private sector,
fan page on official website, extensively sports facilities. In its road map, NITI Aayog
generate more revenue streams and help
using social media to connect with fans, has advised the government to bid for and
sport-centric employment generation.
arranging for fans to meet team players host 100 major international sports events
Government should consider providing
and even organizing training camps and till 2026 by creating a separate arm under
financing support through tax exemptions
talent hunt programs. the Sports Authority of India127.
for earnings from sports or reduction
in import duties on expensive sports
Virtual Reality Gaming Experience Development of a common platform:
equipment.
A system for registration, rating and
Virtual Reality (VR) is one of the
publishing information about all sports
unexplored areas and is the most sought Augment sports infrastructure and
facilities should be established in the form
after technologies in sports. VR, an ensure its proper utilization: With
of web portal. The portal should also have
upcoming technology uses computer International tournaments like FIFA U-17
information like rating of existing sports
technologies that use virtual reality World Cup scheduled to be held in October
facilities, inclusion of private facilities in the
headsets to generate the realistic images, 2017, the Government should carve a
region, information on coaches available at
sounds. This technology has been separate fund. In addition, Government
these venues, transportation facilities like
explored to create gaming lounges. These must propose more of sport cities in
nearest bus or metro station, membership
gaming destinations provide unmatched various states to develop integrated sports
fees, timings and details of available sports
range of games that offers a superlative complex that will encourage different
facilities. A sports (event) calendar for using
virtual-reality experience for sports sports and promote healthy lifestyle. Also,
the existing infrastructure through the
enthusiasts. Recently, a cricket legend has the Government should ensure ease of
year in various sports by various teams
been roped in as the brand ambassador access for grounds maintained by schools
should be drawn. This will allow organized
of one of such gaming lounges. and colleges to boost asset utilization.
and increased participation from budding
as well as existing sportspersons, and also
Rise of Adventure and Fantasy Sports Incentivize and promote sports among
give opportunity to boost sports tourism.
specially abled: With a successful spell in
Adventure sports125 in India has shown an
Rio Paralympics 2016 after securing four
impressive growth with rising disposable
medals, the Government must focus more
income and willingness among Indians
on encouraging and allocating funds for
to look beyond the usual holidays for
86 87
10. Telecom
Industry profile non-traditional services such as banking,
education, payment, infrastructure, etc. are
Market segments
Telecom services: The fastest growing
cumulative foreign direct investment (FDI)
of $18.38 billion since April 2000132. The
gaining momentum. telecom services market is expected to mostly voice-centric market has seen high
reach $103.9 billion128 by 2020 at a CAGR growth in the internet subscribers and
Indian telecom sector has established of 10.3%. The total mobile services market data usage with the increasing adoption of
itself as a unique market over the years by is expected to touch $37 billion in 2017. 3G and 4G services in the last few years.
setting new parameters in efficient service The global telecom services market size, in The average minutes of usage (MoU) has
offerings as shown in the figure. While the terms of revenue is $1.2 trillion in 2016129. come down to 319 minutes in 2016 from
global telcos are nearing saturation in their The market is highly competitive with 12 446 minutes in 2006133. The revenue from
markets, Indian telecom sector continues active operators fighting for their share voice services, which used to be the major
to find innovative ideas for a sustainable of the consumers wallet. Though India source of revenue with a share of 80%, has
business. has the lowest Average Revenue per User been going down. The sector is expected to
(ARPU) i.e. $2130 in comparison to global generate 700,000 jobs in the next 5 years
average of $10/month131, the sector is still driven by high investments and growth134.
attractive for domestic and global players The top five players in the market are
owing to its large untapped potential in responsible for almost 78% of the market
terms of mobile and internet services in share in terms of subscriber base.
the rural areas. The sector has attracted
Figure 30: Telecom subscriber base growth
Telecom industry, in particular, high speed Figure 29: Unique features of Indian telecom market 1,400
internet connectivity has significant 1058
904 996
importance in a countrys overall growth. 898
730
As per a study by World Bank, 10%
302 363
increase in broadband penetration helps 165 252
the economic growth by almost 1.3% for Supply Chain
developing economies. Since 1990the Prepaid Market Outsourced supply
2013 2014 2015 2016 2020F
era of liberalization of Indian telecom 85% prepaid chain to small retail
sector, there has been accelerated growth subscribers are a businesses saves
in the sector and it is now the second major revenue source. cost and improves Telecom subscriber base (million) Internet subscriber base (million)
largest telecom market in the world in Flexibility to low reachability.
income Consumers Source: GSMA
terms of subscriber base. Today, the
dynamics of telecom sector has
Network Sharing
changed as the
Active network
infrastructure sharing
Infrastructure services: The telecom Figure 31: Telecom tower growth
Spectrum Management and Spectrum trading
infrastructure sector in India is an
Average spectrum per operators and sharing helps to
important part of the telecom sector. 2000 6
in India is just 40MHz against curb the limited backhaul
With continuous growth in the telecom 1,487 5
global average of 50MHz. challenge in India 1,359
sector, the tower sector also grew by 320% 1500 1,237
Operators manage QoS to 970 1,115 4
from 100,000 in 2006 to reach 420,000 775
billion subscribers with non- 1000 3
by 2016. The Indian telecom operators,
contiguous spectrum 2
both own and manage the towers as well 2.2 2.3 2.5
500 2.1 1
as outsource the service to independent 1.8 1.9
Low ARPU tower operators. The tenancy ratio has 0 0
increased to almost 2 per tower135. Due to 2015 2016 2017 2018F 2019F 2020F
The ARPU per month in India is
just $2 in comparison to the world emerging technologies and high adoption
Cost Management Total Sites (Thousands) Tenancy Ratio
average of $10. Large subscriber for wireless network, the BTS sites have
Telecom operators managed
base provides volume to survive in also grown exponentially and had reached
to cut costs by centralized
low ARPU market. 1.1 million BTS sites by 2016. There is a Source: Deloitte's Telecom Tower report 2015
operation, Outsourcing non-
huge demand for telecom towers and BTS
core activities like Network
sites to provide high Quality of Service
management, HR etc.
(QoS) and manage better coverage. As
Improves core business
per a Deloitte study, the tenancy ratio is
efficiency.
forecasted to reach around 2.5 by 2020136.
88 89
Growth drivers for the industry areas. Urban population looking for more enter the industry, normally by partnering Non-traditional services: Telecom
advanced services and penetrating the with local service providers. Recently, major companies are slowly transforming the
Figure 32: Growth drivers for the industry untapped rural areas. Indian software companies expanded traditional business models to adapt to
their operations and delivery centers in the new generation of services. Operators
High Demand Liberal Policy High Investment Skilled Workforce The telecom products and services export Africa, implementing low-cost models in are diversifying their business to different
is expected to reach $10 billion (INR 620 strategically situated delivery centers to sectors like Machine-to-Machine (M2M),
Affordable & innovative Relaxed FDI norms and Increasing FDI 2.8 million direct billion) by 2020. India's telecom services serve outsourcing customers in Europe Internet of Things (IoT), virtual reality,
services reduced license fees employment exports currently stands around INR 12 and West Asia. Major ICT demand in Africa augmented reality, machine learning,
Young population and more Increasing number of govt 400,000 expected billion.142 South-East Asia, Latin America, emanates from South Africa, Ghana, and connected world, smart healthcare,
Increasing M&A activity Africa, Middle East as well as North America Nigeria, Kenya, and Egypt. Many Indian education, infrastructure and ecommerce,
spending power initiative employment
INR 1.3 trillion Digital India have shown growing interest to choose ICT companies are expanding to countries etc. The presence of M2M and IoT can
Smartphone adoption/ Spectrum sharing and Training platforms like India as a source of telecom products and like Ethiopia, Uganda, and Malawi. The be seen almost everywhere from coffee
initiative
Increasing online service trading TSSC, Skill India services. accelerated ICT requirements for emerging machines and smart wearables to large
economies like Africa, rising urbanization organizations and cities due to the
Source: Deloitte Analysis Consulting Services in emerging and spending power, and increase in the digitization drive. Indian IoT market is
economies: western as well as Asian multinational expected to grow to $15 billion by 2020
Government initiatives eKranti: National e-Governance Plan 2.0 Potential for global expansion The African ICT sector is expected to corporations into different sectors like from $5.6 billion in 2016144 and the global
The government initiatives such as Digital through its 44 Mission Mode Projects Africa and Latin America: The sector triple by 2025, to reach $80-95 billion143. manufacturing, telecom and natural market is expected to reach around $3
India, Skill India, Make in India and Start-up is underway to ensure ICT enablement has many opportunities for cooperation Indian telecom sector has been a resources, which demand IT support trillion by 2020.145 Similarly, the Indian M2M
India are transforming socio-economic and electronic delivery of services. It with African countries as well as some case study in the global peers due to systems and infrastructure, provides market is expected to reach $35.16 billion
development of India. The massive push spans sectors such as e-education, developing Latin American countries to ICT developments, new innovations, new opportunities for Indian telecom by 2020.146 According to Cisco figures,
from government and huge investments e-healthcare, e-courts, police, insurance, share the ICT expertise, solution and experienced professionals and consulting service providers as well as ICT players in Internet of Everything is estimated to
make India an attractive market for global income tax, property registration, application development, skill development services, etc. There is a strong presence the country. Overall, Indian companies create business value of up to $511 billion
as well as local players. passports, pension, land records, road and innovation. of Indian telecom services in Africa and low-cost innovative business models have over the next decade in India.147 Many
transport, municipalities, banking & Indian ICT companies enjoy a first mover been particularly successful in attracting innovative technology start-ups from India
Digital India: Digital India provides a financial inclusion137. UK and US: The government initiatives like advantage in the continent. Though there is business from enterprises focused on and other parts of the world have started
platform for telcos to invest in different Digital India, Smart Cities Mission and Make large presence, of Indian companies, there mobile technologies, e-governance, skill big investments in M2M and IoT platforms.
Big data analytics for social change:
areas such as communication, payment, in India has provided an attractive platform is still scope for mid-sized enterprises to development and social media.
Big data analytics is a growing market in
governance and digitization, etc. The for European and US companies to invest
India and is expected to reach $16 billion
saturating global telecom services sector in India. Other countries like Sweden,
by 2025138. Telecom service providers
is starting to leverage the INR 1.3 trillion France and Germany are starting to invest
can leverage on the huge amount of Figure 33: Sector potential at 2020: Encouraging investments
Digital India opportunity. This initiative as well. Handset manufacturers from the
data like call drop records, etc. by storing
has created high interest in global peers US and China are investing in India for
and analyzing it to provide insights on
and top communication and IT service manufacturing quality handsets at a low
different government initiatives under
providers. cost.
Digital India.
Digital payments: With a focus on 75%: 1.9 billion GDP: 48% Mobile MVNO: $34 billion
Skill India: The Skill India initiative has South East Asian Nations: The developing New rural connected INR 1.4 trillion Broadband $4 billion operator
moving towards less cash economy, the
249 training partners and 3,222 training nations can leverage on the experience internet devices sector revenue
digital payment sector has initiated new
centers to provide online and classroom of India in taking telecom services to the
interfaces such as Aadhaar Pay, BHIM 75%: Local Huge untapped 6.5%: GDP 688 million: Complete new Heavy investment
education platform for students. There remote corners of the country using cost
app, UPI, etc. to enable mobile-based content demand market for foreign contribution Smartphone market for in infrastructure
is massive growth in online education effective solutions and innovative business
payments. Telecom sector can leverage for new users funding in public adoption MVNOs
services in India and huge number of models. More direct More FDI
these solutions by connecting the masses Wi-Fi, IoT and
foreign universities are investing to More rural & indirect FDI in mobile Highly attractive expected
and providing banking interfaces, security M2M
provide vocational courses, certifications, Future prospects of the Industry investment employment technology & for foreign
and storage.
etc. Telecom services sector can facilitate Rising demand: The sector serves around Backed by Govt R&D investment
BharatNet: The massive infrastructure in providing online platform and robust 1.15 billion subscribers of which the lions Rise in FDI Socio-economic
initiatives
push to connect 250,000 gram connectivity to Skill India initiative. share belongs to the urban India with tele- growth
panchayats has been underway and density of 165 while rural tele-density is Source: The Mobile Economy: India 2016, GSMA
there is huge telco involvement for Start-up India: The new Start-up India just 52.8.139 The Internet subscriber base
infrastructure building, and providing policies encourage more tech start-ups to is expected to reach 730 million by 2020140
Common Services Centers (CSCs) in establish business in India and provides an while the total telecom subscriber base will
villages. This is expected to generate attractive platform for foreign investment reach 1.4 billion during the same period141.
massive direct and indirect employment and funding. India ranks third after the US Comparing the vast population of India
opportunity in India. and the UK in terms of highest number of and the ratio of urban-rural population
technology start-ups. which is 30:70, the potential is huge in both
90 91
11. Logistic
Ease of doing business: India ranks at
Ease of Doing Business Index 2016148.
The gradual removal of red tape policies
investment. However, there is still an urgent
need for regulatory reforms to attract more
Industry profile
130 out of 189 countries in World Banks is making India an attractive market for foreign funds into the sector.
Subject Present Status Recommendations
TAX Retrospective taxation Simplification and Rationalization of tax regime will provide financial stability to the
Indian telecom.
Spectrum Usage 3% Spectrum usage charges should be reduced as operators pay for spectrum at market
Charges driven price
License fee Circle A 10% AGR License fee should be nominal rates
Circle B - 8% AGR 13-14 % License and Spectrum fee discourages investors
Circle C 6% AGR
USOF 5% Current USOF rate is too high. USOF funds should be utilized properly.
Spectrum Fragmented spectrum Policies on efficient utilization of spectrum
Road-map to provide contiguous spectrum in future
Utilize the unutilized spectrum
Right of Way Unclear Need of clear Right of Way framework for Infrastructure set-up. Uniform RoW Indias logistics industry is highly Figure 34: Road, Rail, Shipping and Air FDI in India ($ million)
fragmented. While there is a growing
regulations across all states 538.3
presence of large pan-India players, the 474.2 458.7
industry is still dependent on multiple small 407.4
regional players. Even as manufacturing 352.2
R&D spending: India ranks at 51 in The telecom sector in India is destined come at the right time increasing the companies in India resort more to logistics
University research ranking and at 36 for high growth and the aggressive attractiveness for higher investments. service outsourcing, it will take time to
in government spending on R&D out of digital movement by the government With innovative business models, volume catch up with other economies such as 43.8
11.1 4.6 25.8
56 countries.149 India performs poorly in has accelerated the growth. The market market and high growth potential, India the US and China which have a reasonably
patent application and filed just 45,568 provides exciting opportunities for is poised to be the global powerhouse of mature third-party logistics (3PL) market 2014 2015 2016
patents in 2015 in comparison to Chinas both, the domestic and international telecom services and a hot destination for with large service providers managing
1.1 million patents. Innovation, and stakeholders. The growing demand investors. the entire supply chain across multiple Shiping Airports and Air Freight Roads & highways and Warehouses
Engineering research and development of mobile technologies, data services, geographies through enhanced use of Source: DIPP
(ER&D) need more investment from the mobility, smart technologies and appropriate technology, thereby reducing
government and skill building should be governments push towards liberalized cost.
Figure 35: Share of Logistics Sector in Gross Value Added (GVA) 2015-16
considered an area of priority. services for ease of doing business have
India spends around 14.4% of its GDP on
Storage
logistics and transportation sector150 as
0.10
compared to 8.5% in the US, 18% in China
and 20% in Singapore. Water Transport
0.10
Air Transport
0.20
Services Road Transport

incidental to 3.20
transport
0.80
Railways
0.80
Source: MOSPI
92 93
According to the World Banks biennial Services (rail and road terminals, airports, In absolute terms, the annual investment in Railways commodities carried by Indian Railways
measure of international supply chain ports, inland water terminals), Storage and railways, roads and other transport, would India is the fourth largest rail freight carrier are coal, iron ore, food grains, iron & steel,
efficiency, called Logistics Performance Warehousing (cargo and containers) and increase to INR 3,800 billion ($70 billion) in the world and the largest passenger fertilizer, cement and Petroleum products.
Index (LPI)151, Indias ranking has jumped Value-adding activity. during the 12th Plan, INR 6,300 billion ($110 carrier. Freight traffic has seen a consistent
from 54 in 2014 to 35 in 2016, ahead billion) in the 13th Plan and rising to about increase during FY2009-10 to FY2015-16,
of some advanced economies such as Transportation INR 14,000 billion ($250 billion) in the 15th Indian Railways earns nearly 70% of its growing at a CAGR 1.2%.160
Portugal and New Zealand152 153. Recent The transport system in India comprises Plan. revenue from the freight segment. Major
FDI trends show that Indian logistics distinct modes such as road, rail transport,
sector is gaining traction and is expected shipping and inland water transport, and Road
to attract more FDI due to government air. The National Transport Development The road network of India comprises of Figure 37: Traffic on Indian Railways (million)
policy initiatives in this sector.154 155 The Policy Committee (NTDPC) had estimated National Highways (NH), State Highways
government has laid much emphasis on the modal share of rail and road in the total (SH), Other Public Works Departments 1,098,103 1,140,412 1,147,190 1,143,039
978,508 1,046,522
infrastructure development, with hefty freight traffic to be 35:65 in the 12th Five (OPWD) Roads, Rural Roads and Urban
903,465
investments on building new interstate Year Plan, 39:61 in the 13th, 45:55 in the Roads. It has reached 5.47 million km
626,473 668,618 650,625 666,728 682,612 655,605
highways and national waterways, 14th and 50:50 in the 15th Five Year Plan. in FY2015156 with National Highways 601,290
attracting FDI in railways, privatization of Total investment in transport was projected constituting nearly 1.8% of the total
national ports, labour reforms and use of to increase from about 2.6% of GDP in the network in FY2015.157 158 The market size
PPP model in infrastructure development. 11th Plan to 3.3% in the 12th Five Year Plan, of the road logistics industry, on basis of
and stabilising at 3.7% in the 13th, 14th and freight rate and freight traffic growthas
Market segments 15th Plans. provided by the Ministry of Road Transport 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
The logistics industry is broadly divided in and Highwaysis estimated to be $40,503
the following components: Transportation million in FY16, growing at CAGR of 9.2% Passenger kms. Net Tonne - kms
(different modes of transport), Terminal over the past four years.159
Source: Indian Railways
Figure 36: Road Network in India (million km)

Shipping (Coastal shipping, deep sea) December 2014. 873 vessels (70.1%) with
6.00 .15 India had a fleet strength of 1,246 vessels 1.50 million GRT are engaged in coastal
with gross registered tonnage (GRT) of trade and the remaining 373 vessels
0.10 0.10 10.51 million as on December 2015161, as (29.9%) with 9.01 million GRT are deployed
4.00 0.09 .10
0.07 compared with fleet strength of 1,204 for overseas trade.
.06
.05 vessels with 10.31 million GRT as on
2.00
3.37 4.68 5.40 5.47 5.23
0.00 .00
2000-01 2010-11 2013-14 2014-15 2015-16* Figure 38: Growth of Indian Shipping Fleet
835 846 873

Total National Highways 804
700 750
340 372 350 364 358 373

Source: MORTH
2010 2011 2012 2013 2014 2015 2015-16
Costal Overseas
Source: Indian Shipping
94 95
Air During FY2016162, domestic freight traffic Airports April-December FY2016-17.166 The
Air cargo supply chain includes airlines, increased at 6.08% while international India is the ninth largest civil aviation international passenger traffic increased
customs, ground services, air cargo freight traffic increased at 7.55% as market in the world. In FY2017, civil aviation by 8.7% and domestic passenger traffic
forwarders, domestic transportation, air compared with FY 2015.163 Rise in import sector of India witnessed a growth rate increased by 22.6% respectively, during
cargo terminals, distribution centres and and exports is the key driver for growth in of around 20-25%. Total international April- December FY2016-17167 as compared
integrated international express services freight traffic in India. and domestic aircraft movements have to the same period last year.
centres. witnessed an increase of 14.7% during
Figure 39: Growth of Air Cargo Traffic in India (million tons) Figure 41: International and Domestic Passenger Traffic (million)
1.66 168.9
1.50 1.47 1.54
1.41 1.44 151.8
1.36 122.4 139.3
1.27 121.5 116.4
1.05 105.5
0.99
0.85 0.81 0.78 0.84 0.84 54.7
0.69 43.0 46.6 50.8 43.8
37.9 40.8
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17*
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17* International Domestic
Source: AAI
Domestic International
Source: AAI
Inland Container Depots/Container Figure 42: ICD/CFS by States (2016)

Freight Stations/ Private Freight
Terminals (ICD/CFS/PFTs)
Terminal logistics Telangana Others
ICDs/CFSs act as hubs in the logistics
Ports minor and intermediate ports. Cargo The Ministry of Shipping has set a target 2% 5%
chain. The government and the private
According to the Ministry of Shipping, traffic at major ports stood at 606.37 MMT capacity of over 3,130 MMT by 2020, driven Tamil Nadu
sector have set up ICDs/CFSs for handling Madhya Pradesh
around 95% of India's trading by volume in FY2016, increasing at a CAGR of 0.9% by participation from the private sector. 22%
and temporary storage of containerized 3%
and 70% by value is handled via maritime during FY1117. Cargo traffic at non-major
cargo.168 They are largely concentrated in
transport. India has 12 major and 200 ports stood at 466.1 MT in FY15-16.164 165 Punjab
the NCR region, Tamil Nadu, Maharashtra
3%
and Gujarat and cater to maximum
demand in the northern hinterland and the
Figure 40: Cargo Traffic at Major and Non-major Ports (million tons) Rajasthan Maharashtra
coastline running through the other parts
4% 19%
of India169 170.
581.3 606.4 Karnataka
570.1 560.2 545.8 555.5
470.9 466.1 A large number of Private Freight Terminals 3%
387.9 417.0
353.7 are also being built on the rail network
315.4 315.4 West Bengal
234.3 in response to the Indian Railways (IR)
4%
initiative. These are third party terminals Gujarat
meant to handle rail traffic efficiently and Haryana 14%
support the last mile connection through 5%
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17* improved warehousing, handling, and Uttar Pradesh
transportation. Andhra Pradesh Kerala 6%
Major Ports Non-major Ports 5% 5%
Source: Shipping.nic Source: NCFS
96 97
Inland Water Terminals India has five declared National Terminals Gaighat & Kalughat on National
The Inland Waterways Authority of India Waterways (NW I to V), out of which, three Waterways -1 under the Public-Private Industry/retail Liquid storage Agri-warehousing Cold stores
(IWAI) is responsible for the development are operational with an annual cargo Partnership (PPP) model.172 warehousing
and regulation of inland waterways in movement of ~7 MMT. Key industries Automotive, electronics Oil and gas, petroleum Agriculture and FMCG Dairy, meat and
India.171 India has five declared National & electrical, textiles, refineries, chemicals, poultry, sea-food,
Waterways (NW I to V), out of which, three The IWAI has identified development pharmaceuticals, edible oil units fruits & vegetables,
are operational with an annual cargo and operation of Kolkata Terminals GR machine and engineering, pharmaceuticals,
movement of ~7 MMT. Jetty -I, GR Jetty-II & BISN and Patna fertilizers agriculture
Size/ Infrastructure Estimated to be worth As of 2014, India had 7,000

National Waterway Location Stretch (Kms) INR 80-85 billion (2013) cold stores, with a total
capacity of 32 MT176.
NW 1 Ganga-Bhagirathi-Hooghly river system from Allahabad to Haldia 1,620
NW 2 Brahmaputra river from Sadiya to Dhubri 891
NW 3 West Coast Canal from Kottappuram to Kollam along with Champakara 205 Growth drivers for the Industry trade warehousing (FTWZ), multimodal The Sagarmala Program focuses on
and Udyogmandal canals logistics parks (MMLP) and container development along 4 thematic areas
Agriculture based demand: India is one
freight stations, multi-modal transport viz. port modernization & new port
NW 4 Godavari & Krishna rivers & Canals between Kakinada and Puducherry 1,095 of the largest producer of vegetables and
services, development, port connectivity, port led
fruits in the world. It represents a vast
NW 5 Brahmani river & Mahanadi delta system along with East Coast Canal 623 industrialization and coastal community
opportunity for logistics and cold chain Specialised services: Emergence of
development.
players to capture the untapped potential specialised services, such as liquid
in the market. logistics, temperature controlled logistics The Coastal Economic Zones (CEZ)
or cold chain and reverse logistics. will lead port-led development through
Increasing focus on third party logistics
Trans-shipment Hubs Storage and Warehousing The total capacity of organised warehouses coastal economic zones (CEZs) in
(3PL): The concept of 3P Logistics is still
Indias first trans-shipment hub, Storage and Warehousing infrastructure in India is 126.96 million tons. About 80 to Government initiatives eight coastal states with balanced
at a nascent stage in India, but provides
International Container Transhipment is created to deal with both cargo and 85% of organised warehousing sector is ecosystem, large contiguous land,
growth opportunities for organised Make in India: Governments Make
Terminal (ICTT) built at Vallarpadam, containers: Industry/Retail, Liquid cargo controlled by Government and PSUs. The access to urbanisation and supporting
players. Indian firms are looking at new in India scheme to enhance the
Cochin handles mother container ships (Crude oil, Petroleum products, Chemicals, private sector has only 18.97 million tons. infrastructure.180
logistics capabilities and more complex manufacturing sector in India will drive
of 8,000+ Twenty Feet Equivalent Units Edible Oils etc.), Agricultural commodities About 30% of the warehousing capacity is
solutions from their 3PL partners in order logistics infrastructure as manufacturing Multimodal Logistics Parks (MMLP)
(TEUs) capacities. It has substantially and, Cold Storage for perishable cargo held by unorganised small godown players
to focus back on their core business. sector spends about 2.2% of its revenue has been proposed to set up at 15
reduced the need for transshipment of and stack areas for storage of loaded and who lack scale and quality.174 175
3PL provides the ability to bring down on logistics. locations in Maharashtra, Punjab, Gujarat,
Indian containers through ports of other empty containers.
conventional logistics costs and handle Rajasthan, Tamil Nadu, Karnataka and
countries, thereby resulting in reduced Bharatmala and SetuBharatam have
more complicated tasks. Telangana.181 182 183
transportation cost and time.173 been announced to build stronger
Rise of e-commerce market in India: network of National Highways. Union Budget 2017: The total allocation
Robust growth in e-commerce market is National Highways Interconnectivity for National Highways has been
likely to drive growth of logistic business Improvement Project ensures safe, fast increased from INR 579.76 billion ($8.8
Figure 43: Warehousing Capacity in India 2016 in India. Major e-commerce retailers and all weather movement of traffic on billion) in 2016-17 to INR 649 billion ($9.9
have moved towards a marketplace National Highways. Logistics Efficiency billion) in 2017-18. The outlay for Indian
45.28
35.92 model where a third-party logistics (3PL) Enhancement Programme (LEEP) Railways is INR 1,310 billion ($20.06
company is assigned with the task of aims to enhance freight transportation billion) vis--vis INR 1,210 billion ($18.5
18.97 picking the product directly from the by improving cost, time, tracking and billion) in 2016-17.
15.07
11.72 vendor and delivering it to the customer. transferability.
The government envisions airport
Goods and Service Tax (GST): In Railways, the Eastern Dedicated infrastructure investment of INR 744.42
Food Corporation Central Warehousing State Warehousing Cooperative Private Sector
Implementation of GST is expected to Freight Corridor (1,856 km) and Western billion ($11,400 million) under the 12th
of India (FCI) Corporation (CWC) Corporation (SWCs) Sector lead to consolidation of warehouses, Dedicated Freight Corridor (1,504 km) Five Year Plan (2012-17). It plans to invest
and State Agencies improved efficiencies due to reduction of projects are under implementation. INR 119.5 billion ($1,830 million) for
Source: WDRA
trade barriers, revaluation, sourcing and It will strengthen Indias present rail development of airport infrastructure
manufacturing decisions.177 infrastructure to carry very high levels of along with aviation navigation services by
freight leading to a reduction in cost of 2026.
Infrastructure: Development of
transportation and inventory.178 179
infrastructure such as dedicated freight
corridors, logistics parks, growth in free-
98 99
12. Retail & E-commerce

Future prospects for the industry
The logistics industry is expected to grow
Industry profile
Major logistics players are expanding
at 8.6% annually during 2015-2020 and be
their global presence across Latin
worth $307 billion by 2020.
America (Brazil, Mexico and Argentina),
Consolidation of warehouses: Logistics Africa (Nigeria), and Asia (Indonesia,
players are looking at consolidation China, Hong Kong and Singapore) via joint
of their warehouses to set up larger ventures and global mergers. Several
integrated facilities, increasing supply large players have also set up import
chain efficiencies. export trading divisions to focus on
international trade.
Emergence of Multimodal Logistics
Parks (MMLP): Logistics companies Expanding presence across the critical
are setting up MMLP connected with value chain in logistics, Indian players are
rail network, container yards and expected to become major beneficiaries
warehousing (with value-added services of global trade.
such as cross docking, inventory
management, packaging and labelling). Conclusion and recommendations
Development of coastal shipping: Expansion of road infrastructure and

Coastal shipping or use of water as a focus on last-mile roads connecting all
mode of transportation is much safer, roads and port terminals to warehouses
economical, and a less polluting mode and distribution centres.
of transport. It will provide increased The Indian retail industry has emerged as e-commerce markets. Indian e-commerce to major improvements in the telecom
The development of multimodal logistic one of the most dynamic and fast-paced sales are expected to reach $100 billion by infrastructure. With 3G and 4G services
opportunities in container-feeder
parks will improve the entire logistics industries due to the entry of several 2020 from $30 billion in FY2016. making way into India along with declining
services. Coastal shipping can carry large
network in India and lead to efficient new players. It accounts for over 10% of data tariffs, spend on internet data
parcel sizes and provides opportunity
operations. the countrys GDP and around 8% of the E-Commerce has transformed the way is growing significantly. Government
for consolidation of loads and over-
employment. India is the worlds 5th largest business is done in India. The dynamic schemes such as Optical Fibre Network can
dimensional cargo. Development of new IT-enabled
global destination in the retail space. pace of the Digital age in India has forced all significantly increase internet penetration
technological systems will lead to
Increase in containerisation of major companies to take steps to cater to in the rural communities as well as provide
improved operations, enable high-level
cargo: Private and government ports The aggregate revenue of the top 250 the consumer expectations. A prerequisite a means to e-Commerce companies to tap
tracking as well as help in removing
are focusing on container cargo. retail players globally was $4.31 trillion in to success in the e-commerce industry is to the huge market potential there.
inefficiencies.
Containerisation of cargo has brought a 2015. The global e-Commerce market was create innovative, sustainable, consistent
significant change in the organisation of Focus should also be laid on introducing estimated at $1.4 trillion in 2016. and seamless shopping experience within Smartphones are demonstrating ways and
port terminal services, resulting in higher green logistics to help improve the all facets of consumers. means to exhibit massive growth in the
demand for sophisticated handling environmental footprint. Indias retail market is expected to nearly coming years. The widespread adoption
equipment, inland logistics capabilities, double to $1 trillion by 2020 from $600 The growth of the e-Commerce industry of smartphones is being propelled by
India faces increased requirement billion in 2015, driven by income growth, has been triggered by increasing internet several factors such as high competition
and service efficiencies.184
for logistical skills, with demand urbanisation and attitudinal shifts. While and smartphone penetration in not leading to low prices, prevalence of internet
IT-enabled logistics: Indian companies for warehouse managers, logistics the overall retail market is expected to only metro cities but also in tier two and enabled services and ease of accessibility
are focusing on IT-enabled logistics, such managers, coastal seafarers and IT grow at 12% per annum, modern trade tier three cities of India. Mobile devices to content.
as the development of logistics planning services expected to rise in future. would expand twice as fast at 20% per are further expected to drive sales via
and co-ordination systems to contribute CII and National Skill Development annum and traditional trade at 10%. e-Commerce platforms in future. The leading e-Commerce companies state
towards development of 3PL services.185 Corporation, has set up a Logistics Sector that almost 70-75% of their online traffic
Skill Council to address these issues Indias Business to Business (B2B) Emerging trends comes from mobile phones and thus
Intelligent transport systems: India
through a structured skill development e-commerce market is expected to reach Ongoing innovation: All the existing higher revenues are coming from mobile
represents a huge scope for intelligent
program. $700 billion by 2020 whereas the Business e-Commerce companies aim to effuse applications.
transport systems (ITS) that would
to Consumer (B2C) e-commerce market a strong vision to build Exponential
provide real time monitoring of trucks Digitising warehousing operations would
is expected to reach $102 billion by 2020. Organisations whose impact is huge. New payment solutions: Cash-on-Delivery
and trains through GPS and integrate the lead to strengthening of supply chain
Online retail is expected to be at par with Exponential Organizations are led by (CoD) remains a popular mode of payment
same into one system. operations, it will also considerably lower
the physical stores in the next five years. innovative imperatives and enablers such for Indian e-Commerce transactions. Cash
the costs of logistics operations.
as digitisation, technology enablement, transactions result in high administration
India is expected to become the worlds analytics, cloud-based solutions and costs even for the e-Commerce companies
fastest growing e-commerce market, mobilisation of services. which reduces their margins. Hence, new
driven by robust investment in the sector digital payment solutions are evolving to
and rapid increase in the number of Internet penetration: The e-Commerce address these challenges.
internet users. Various agencies have industry in India has been propelled
high expectations about growth of Indian by the rise in internet penetration due
100 101
Demonetisation has played a key role in India Post with its extensive reach of The Government has approved a Earlier this year, the government began Online retailers continue promotional Conclusions and recommendations
enhancing new payment solutions. Further, people and post offices across the country proposal to scrap the distinctions among to pay increased salaries and benefits prices in the market, offering a significant As the consumers journey to purchase
the Indian governments initiative to extend has set-up dedicated processing centres different types of overseas investments to central-government employees and boost to e-retailing in consumer durable becomes increasingly facilitated by
banking facilities to its previously unbanked to handle last-mile deliveries of the by shifting to a single composite limit, pensioners, back dated to January. sector. Options like cash-on-delivery enabling technologies, companies need to
citizens through the Jan Dhan Yojna e-Commerce companies. which means portfolio investment up to and manufacturers warranty add fuel to engage and influence consumers at every
scheme has added significant number 49% will not require government approval On 8 November 2016, India demonetized this rage. Cash-on-delivery is the most stage of the process, from research to the
of debit cards thereby providing these Even in the B2B e-Commerce space, nor will it have to comply with sectoral its high-value currency notes to curb black preferred payment option with over 30% of final purchase decision. Its imperative to
customers access to electronic payments. logistics companies are beginning to conditions as long as it does not result in money (undeclared income). This has buyers opting for it in India. The computer target the right consumer with the right
There has been launch of electronic wallets partner with online truck aggregators a transfer of ownership and/or control of caused a definite shift to formal banking peripherals, cameras and mobiles, and message in the right moment through
and also digital payment products from and freight marketplaces such as Freight Indian entities to foreigners. As a result, and electronic modes of payment. lifestyle segments account for a majority of whatever device they are using. Retail
traditional banks for faster check-in and Tiger to build trust and accelerate intercity foreign investments are expected to total purchases and ecommerce companies should
check-out of e-Commerce transactions to freight transactions. Such aggregators are increase, especially in the attractive retail India expects to replace its indirect tax develop solutions to support the latest
ease the payment process in e-Commerce. increasingly poised to become leading B2B sector. structure with an efficient goods and It is imperative for a retailer to have a trends in brand personalization. This has
marketplaces for the logistics industry in services tax. Items such as consumer strong distribution and logistics network implications for the supply chain and the
Just recently the announcement of
The launch of Unified Payments Interface India. electronics, white goods and beauty to succeed in this sector. Players follow a talent needed to manage the process in
abolishment of Foreign Investment
(UPI) by Reserve Bank of India is aimed products could become cheaper, while distribution network that suits them the a more complex environment. For larger
Promotion Board (FIPB) is a bold step
to transform the mobile banking. UPI is Government initiatives others, like textiles, edible oil and cheap best. enterprises that tend to be structured
taken by the Government to boost
expected to benefit the e-Commerce The Government of India has taken various footwear, could become more expensive. around traditional lines of business, this will
foreign investments into India.
industry as well by reducing the number initiatives to improve the retail industry in An additional tax will apply on demerit and Companies are now adopting innovative likely mean a learning curve.
of failed e-Commerce transactions India. luxury goods such as cigarettes, aerated marketing strategies for their business.
Future prospects of the Industry
due to complicated transaction flows drinks and high-end cars, though effective Certain players in this sector are focused Companies should modify their traditional
Government of India has allowed E-commerce is expanding steadily in
in the current payment systems. The rates will probably not rise. on a particular segment. Some of the large marketing strategies and tactics,
100% FDI in online retail of goods and the country. Customers have the ever
implementation of UPI will enable the retailers exclusively operates hypermarkets developing contemporary messages
services through the automatic route, increasing choice of products at the lowest
e-Commerce delivery staff to collect money Indias youthful population is becoming and home retailing businesses. They focus delivered through cutting-edge, digital
thereby providing clarity on the existing rates. E-commerce is probably creating the
electronically for even CoD transactions. brand- and fashion-conscious, especially on maintaining its competitive advantage platforms in light of the evolving drivers
businesses of e-commerce companies biggest revolution in the retail industry,
For early adaptability, several e-Commerce in the big cities, where increasingly affluent and gaining benefits of scale through of consumer purchase and consumers
operating in India. The government has and this trend would continue in the
companies have already started building households are acquiring a taste for luxury focusing on efficiency and productivity continued immersion in the digital world.
also signed pacts worth INR 15 billion years to come. Retailers should leverage
applications that will facilitate mobile items. Many global brands are targeting
($222.36 million) in a wide range of the digital retail channels (e-commerce),
payments on UPI. However, the challenge this segment. Retailers are opting for many channel to Due to the shifting composition of the
sectors including retail and steel and which would enable them to spend less
will be to balance safety, integration and maximise sales, provide convenience and consumer population and the growing
gas. FDI equity inflows in retail trading money on real estate while reaching out to
mass-adoption. E-commerce is expected to be the next for enhanced productivity. Omni-channel influence of the young consumers, retail
were $936 million (April 2000December more customers in tier-2 and tier-3 cities.
major area supporting retail growth in retailing is being adopted by many retailers and ecommerce companies will need to
2016). Both organised and unorganised retail
Ancillary sectors: Customers are getting India. With growth in the e-commerce in India. develop strategies to both understand
companies have to work together to ensure
accustomed to next-day delivery of industry, online retail is estimated to reach and optimize innovation and marketing
The Ministry of Urban Development has better prospects for the overall retail
products. Due to challenges in terms of $70 billion by 2020 from $3 billion in 2014. Retailers benefit if consumers perceive communications that address these trends.
come out with a Smart National Common industry, while generating new benefits for
handling huge volumes of delivery, return The value of online retail purchases made their store brands to have consistent
Mobility Card (NCMC) model to enable their customers.
orders and higher standards of customer by consumers in India is projected to cross and comparable quality and availability
seamless travel by metros and other
service, the industry has seen rise of $100 million by 2017. in relation to branded products. For this,
transport systems across the country, as Nevertheless, the long-term outlook for
several third-party logistics companies retailers are providing more assortments
well as retail purchases. the industry is positive, supported by
(3PLs) who handle last-mile deliveries and The key drivers of online retail are a young for private level brands to compete
rising incomes, favourable demographics,
reach the hinterlands of the country mainly Implementation of GST is expected to population aided by easier access to with supplier's brand. New product
entry of foreign players, and increasing
in tier 2 and 3 cities. enable easier movement of goods across credit and payment options, increasing development, aggressive retail mix and
urbanisation.
the country, thereby improving retail internet penetration and speed, 24-hour everyday low pricing strategy help to get
Logistics lies at the heart of e-Commerce operations for pan-India retailers. accessibility, and convenient and secured edge over supplier's brand.
It is expected that India will retain its
and a large number of third-party logistics transactions.
With the allowance of 100% FDI in single current position as the third-largest retail
service providers have entered this space
brand retail, investor sentiment will market in Asia and the fourth-largest in
to provide customised last-mile deliveries.
get further push. Rapid emergence of the world (after the US, China and Japan)
However, the increasing logistics costs
organised retail outlets, such as mega until 2018, after which it is likely to overtake
associated especially with return orders
malls and hypermarkets, are augmenting Japan. Retail sales grew by 6.5% in volume
requires innovative and analytical driven
the growth of organised retail in the terms in 2015, and growth is forecast
models that will increase operational
country. Retailers have made dynamic to accelerate in 2016 given improved
efficiencies in Reverse logistics. This will
changes in supply chain and logistics economic growth and rural demand. The
help e-Commerce companies to drive
for competitive advantage and meeting Economist Intelligence Unit expects retail
towards profitability.
consumer demands. sales to accelerate sharply during 2017-20,
rising to $1.70 trillion by 2021.
102 103
13. Environmental Service

Industry profile respective sectors. A few known players in
the segment include Attero Recycling, E.coli
backing waste management startups
in India, among them are Saahas Waste
which 40% will come from the Government
of India (GoI), 21% from state governments
Waste Management (e-waste segment), Management, Karma Recycling, and and 39% from the private sector).194
Ramky Enviro, Jindal Group (MSW sector), MobiTrash. Further, the government has allocated ~$3
Synergy Waste Management, and Earth billion for the Namami Gange Programme,
Sense Recycle Work (bio-medical waste), According to Indias Planning Commission, towards cleaning and rejuvenation of the
etc. Some other known players operating the total capital investment required to Ganga river.
in Indian market include BASIX Municipal upgrade Indias water infrastructure will
Waste Venture, Concept Biotech, Eco Birdd require an investment of $126 billion There are various initiatives taken by
Recycling, EcoCentric Management, UL over the next 20 years. The Planning private companies offering solutions for
Trust Solutions, UPL Environmental and Commission has also estimated that Indias waste management:
Vulcan Waste Management. A growing municipal solid waste management will
number of angel investors are also require an investment of $3.4 billion (of
SPML Enviro, an integrated environment solution provider arm of Subhash Projects and Marketing Limited (SPML) provides solution
in relation to collection, transportation & disposal of municipal / hazardous waste, segregation and recycling of municipal waste,
construction & management of sanitary landfill, construction & operation of compost plant and waste to energy plant at the Delhi
airport and Hyderabad Airport. The company has partnered with US-based PEAT International, a waste-to-resources company for
the treatment and recycling of a range of waste feedstocks, including industrial, universal, and medical waste.
According to the Global Water Market The following statistics provide a snapshot These challenges present a large market HCL Info System has created the online process of e-waste recycling request registration, where customers (individual or corporate)
2014, India is one of the top four markets of the critical environmental challenge that for companies in the environment can register their requests for disposal of their e-waste.
in global water treatment, along with India is facing at present: technologies space. As per the US ITC Ltd. has chosen environmental & waste management as one of the areas for their CSR efforts, including recovery of dry
Brazil, China and United States. Population Department of Commerce and recyclable waste going to landfills, creating sustainable livelihoods for waste collectors, and participation in Swachh Bharat Mission.
According to the Central Pollution Control
explosion, coupled with rapid urbanization International Trade Administration
Board (CPCB) of India, of the 62 million Recently, a Pune-based waste-to-energy solutions providing company Aspirify Energy acquired G.E.T. Water Solutions, a
and industrialization, has resulted in (ITA) Environmental Technologies Top
tons of solid municipal waste generated water-treatment-solutions firm to expand its capabilities in the liquid waste management segment, with the aim of leveraging
increased generation of solid wastes in Markets Report, Indias environmental
each year, only 70% is collected and a opportunities created by Swachh Bharat Mission.
urban as well as rural areas of the country. technologies market, including goods and
mere 23% is processed or treated186.
Further, with increasing political thrust and services, was valued at $16.3 billion in
Seven states in the country (Maharashtra,
public awareness, solid waste management 2016188. Municipal solid waste (MSW) is a
Uttar Pradesh, Tamil Nadu, Andhra
is starting to receive due attention. promising sub-sector, expected to grow
Pradesh, Gujarat, Karnataka, and Delhi)
at 8-10% p.a., during 2015-2020, owing Regulatory landscape paper, metal, wood, etc.) and domestic and water supply for urban transformation.
produce close to 45% of MSW187.
The waste management market comprises to the governments plans for setting up Municipal solid waste: The MSW Rules hazardous (diapers, napkins, mosquito Further, clean water supply, sanitation,
of various sub-segments across solid waste India generates about 4.2 million tons of 500 engineered sanitary landfills facilities, were formulated in 2000, which defined repellents, etc.) and hand it over to and efficient waste management are
(urban, industrial, agricultural, electronic, industrial waste per annum (CPCB). provision for mechanized sweeping, and the roles of municipal corporations, state authorized rag-pickers/waste collectors/ the important components of the
bio-medical and radioactive), and liquid new emission standards for incineration. governments, and the pollution control local bodies. governments Smart Cities Mission.
Of the three million small-scale
waste (waste generated from washing, Tremendous opportunities also exist in the boards in management of solid waste.
enterprises, most are not using any
flushing or manufacturing processes of industrial water & wastewater systems, as These rules were revised in 2016 wherein Sanitation and environmental cleanliness: Electronic waste: In 2012, E-waste
pollution control equipment (CPCB).188
industries, sewerage). In addition, gaseous companies in power, food & beverages, rules will be applicable beyond municipal The governments Swachh Bharat Mission (management and handling) Rules 2011
waste (released in the form of gases from A 2015 WHO study revealed that in India, pharmaceutical, textile industries demand areas, to include urban agglomerations, focuses on eliminating open defecation, made it mandatory for all electronic goods
automobiles, factories or burning of fossil the number of rivers defined as polluted advanced treatment technologies such notified industrial townships, areas under collection and scientific disposal/reuse/ manufacturers to ensure that producers
fuels) also adds on to the air pollution load doubled in the last five years. as reverse osmosis membranes, ion the control of Indian Railways, airports, recycling of municipal solid waste, and collect their end-of-life products from
opening up air quality monitoring and exchange, and electro dialysis. As per the airbase, port and harbour, defence strengthening of urban local bodies to consumers (industrial and individuals)
According to CPCB, India has an
purification market. The nature of waste ITA report, the industrial water & waste establishments, special economic zones, design, execute and operate systems. and recycle them in environmentally safe
installed capacity to treat only 30% of its
such as hazardous and non-hazardous water systems sub-sector is anticipated to and State and Central government manner. These rules were made more
household waste, the remaining is either
wastes, add another important dimension grow 13-15% p.a. during 2015-2020.190 organizations. The new rules also place Urban waste management: As part of stringent in 2016, setting targets for
released into the open drains or dumped
of treatment and technology. These various emphasis on integration of informal sector Atal Mission for Rejuvenation and Urban producers for collection of such waste,
on the ground, leading to water pollution
types of waste (Municipal, industrial, Owing to the varied nature of each with the formal sector, and extend the Transformation (AMRUT), the government making them responsible for handing over
and related health issues.
e-waste, bio-medical waste) are governed category of waste (MSW, bio-medical, responsibility of generators to segregate focusses on establishing infrastructure that e-waste to recyclers.
by different laws and policies under various e-waste, etc.), requiring different waste as wet (biodegradable), dry (plastic, could ensure adequate sewerage networks
departments. technologies and disposal methods,
companies have developed expertise in
104 105
Table 3: Applicable rules pertaining to various waste segments, including hazardous and bio-medical waste are mentioned consumers frequently buy new phones International collaborations: Global collection systems like specific bins
in the table below, along with various government initiatives. to get access to the latest technology.191 players can partner with both Indian which would eventually lead to BMW
Telecom equipment accounts for 12% private players as well as the government treatment systems. Some of the emerging
Year Policy/Initiatives of e-waste, the majority (70%) being in PPP to create integrated solutions in opportunities in the sector are:
1989 The Hazardous Waste (Management & Handling) Rules accounted by computer equipment. various waste management areas like
Participation in Waste-to-Energy (WtE)
Since a meagre 1.5% of total e-waste feasibility study, design and planning,
1998 Bio-medical Waste Handling Rules, 1998 projects: According to the Ministry of
gets recycled in India due to inadequate technical consultations, waste treatment
New and Renewable Energy (MNRE), if the
2000 MSW (Management & Handling) Rules, 2000 infrastructure, tremendous opportunities technologies, restructuring of existing
current 62 million tons of MSW produced
exist for manufacturers and other players waste collection systems, etc.
2006 Strategy and action plan-use of compost in cities in India is dumped without treatment,
to participate in this space.
International investors: Various fiscal the country would need 340,000 cubic
2008 National Urban Sanitation Policy Stricter norms for industries: The incentives offered by the Government, meters of landfill space every day.
2009 Draft document on E-waste handling Rules governments is placing emphasis can make the sector more attractive Considering that this figure could go up
on better waste management and for the foreign investors. These include to 114 million tons by 2041, there is an
2010 National Mission on Sustainable Habitat stringent requirements on industries 100% tax deductions on gains and urgent need to look for alternative ways
2011 Plastic Waste Rules, 2011 for compliance with environmental laws. profits to companies that handle waste to utilize this waste. One of the solutions
For instance, in 2016, GoI notified new management projects; electricity taxes to this issue is converting this waste
2012 E-waste Rules, 2011 hazardous waste management rules and excise duty with exemptions and into energy. As per MNRE, there exists
2013 Draft Municipal Solid Waste Rules 2013 wherein it banned the import of solid concessions and waiver of customs duty a potential to generate about 1700 MW
plastic waste including PET bottles to on certain material imports meant for of power from urban waste (1500 from
2014 Draft Manual on Municipal Solid Waste Management and Handling ensure that existing plastic waste in the generating renewable energy. MSW and 225 MW from sewage) and
2014 Swachh Bharat Mission country is used efficiently, for industrial about 1300 MW from industrial waste.
Opportunities at collection of waste:
purposes.192 Per IREDA (Indian Renewable Energy
2015 Atal Mission for Rejuvenation and Urban Transformation (AMRUT) Collection of waste has significant
Development Agency) estimates, so
employment generation potential. Rough
2016 Solid Waste Management Rules (SWM) 2016, Plastic Waste Management Rules 2016, e-waste (Management) Rules Role of Environmental Services as key far India has realized only 2% of its WtE
estimates peg the number of informal
2016, Bio-Medical Waste Management Rules 2016, Construction and Demolition Waste Management Rules 2016, services sector potential. To promote uptake, the MNRE
waste scavengers at around 39 million.192
Hazardous and Other Wastes (Management and Transboundary Movement) Rules 2016 The government allows 100% foreign direct is also providing subsidies and incentives
investment under the automatic route for WtE projects. As per the Ministry of
Source: Industrial and Urban waste management in India, The Energy and Resources Institute, 2015 Future prospects for the industry
for urban infrastructure areas including Urban Development (MoUD), about 21
Some of the international good practices
waste management subject to relevant WtE plants are under tendering stage
have a replication potential in Indias waste
rules and regulations. This opens various across various states. Several Indian
management landscape. For instance,
Growth drivers for the industry Rate of industrialization: The policy push Bharat Mission (Clean India Mission) and opportunities for foreign players and players have also entered this space,
in the Netherlands, Austria and UK, the
Growing urbanization and industrialization for industrialization through liberalization Atal Mission for Rejuvenation and Urban investors to collaborate with Indian players and are offering services to international
bio-degradable waste management
are two major reasons that are increasing of FDI norms, and campaigns such as Transformation (AMRUT) place emphasis and explore the nascent Indian waste clients as well.
(BMW) systems focus on building separate
pressure on environment, and will form the Make in India have resulted in various on better management of industrial and management industry.
growth drivers for the waste management companies entering India to set up household waste. Swachh Bharat Mission
industry in India. their manufacturing bases. The present has put emphasis on 100% collection
treatment capacity for industrial and scientific processing/disposal/reuse/ Company Operating regions
Population growth and urbanization:
wastewater is 1/6th (142 MLD) of total recycling of municipal solid waste. The
The 2011 census reported that of the 1.2 VA Tech Wabag Europe, Africa, Asia, Middle East, Latin America
generation.192 government is focusing on providing all
billion population in India, 377.1 million
support to municipal bodies to come up UPL Environmental Engineers Pvt Ltd Germany, UK, Japan
reside in urban areas. This figure is Impact on health: Increasing awareness
with design, execution and operation
expected to rise to 600 million by 2031.189 of adverse health impacts such as Ramky Enviro Engineers Ltd Singapore, Indonesia, Vietnam, Thailand, Middle East and North Africa
plans for waste disposal systems.
The rapid growth of urban dwellers respiratory concerns, and cardiovascular
There is also an emphasis on private- Mailhem Engineers Pvt Ltd Pakistan, Nepal, Bangladesh
is anticipated to further burden the diseases, among others, because of Air
sector participation and public-private
countrys waste management resources. pollution and water pollution (caused by Attero Recycling Plans to expand overseas
partnership (PPP) in capital expenditure,
As per The Energy and Resources unsanitary disposal of waste) has further
operation and maintenance of solid
Institute (TERI)s 2015 report, by 2041, 114 highlighted the need to manage waste.
waste. The Sustainable Habitat Mission
million tons of municipal solid waste will
Thrust on urban waste management also has an important component on
be generated in India every year, resulting
through recent initiatives: The solid waste management.
in per capita waste generation of 0.53
government is driving better urban
kg/day (rising from 0.36 kg/day in 2011), Upsurge in technology adoption: A
waste management practices through
necessitating better waste management study by ASSOCHAM revealed that of 1
awareness generation, policy thrust and
technologies.190 billion phones in circulation in India, close
programmatic interventions. Swachh
to 25% end up in e-waste annually as
106 107
14. Energy Service

Opportunities under Smart Cities
Mission: Efficient waste management
Industry profile
is one of the important areas identified
under the Smart Cities Mission as well.
For instance, under the smart city
development project, the Agra Municipal
Corporation has formulated a plan
wherein it will install 293,000 hi-tech
dustbins which will be RFID-tagged.193
These bins will be tracked through
GPS-enabled garbage collection vehicles
to ensure timely unloading of waste
material. Such innovative models can be
replicated in other cities as well.
Opportunities under Swachh Bharat

Mission: The government targets to
construct 6.6 million toilets in urban
India, and over 100 million toilets in rural
India by 2019, with an outlay of INR 620
billion (~$ 9.3 billion) and INR 1340 billion
(~$20 billion), respectively. This will result
in opportunities for health and hygiene India is the third largest energy consumer
Renewables
companies, ceramic companies, and in the world.
Hydro-electric 2.2%
construction companies. 4.0%
Its primary energy consumption rose by Nuclear
Participation in e-waste management: 5.2% as compared to global growth of 1.2%
India is the fifth largest e-waste producer 1% in 2015. Coal remains the dominant
Natural gas
in the world, generating 1.8 million tons fuel, accounting for 58% of Indias primary
6.5%
of e-waste each year, which is expected energy consumption. Indias energy
to rise to 5.2 million tons by 2030. Over intensity (the amount of energy required
95% of e-waste is collected by the per unit of GDP) declined by 2% in 2015,
unorganized sector, leaving ample space faster than the 10-year average of -1.4%.194
for private players to enter the market.
Oil and gas sector
India has 26 sedimentary basins covering Oil Coal
Waste management presents enormous
an area of 3.14 million sq. km. (44% on 27.9% 58.1%
opportunities in India as it brings a unique
situation wherein issues of service quality land and 56% offshore).
and waste quantity need to be handled India imports over 81% of its crude oil
together. The government has made waste requirements195 , and meets 45.7% of its
management a priority under several of gas requirements through imports.
its initiatives including Swachh Bharat
Mission, Smart Cities Mission, AMRUT, and Source: BP Statistical Review 2015
National Mission for Sustainable Habitat.
The on-ground implementation of these
plans will require a vast number of players
in the market. India certainly requires
newer delivery models, more sophisticated
technology, newer designs, and better
implementation practices to manage its
waste, which can result in tremendous
opportunities for investors and private
firms.
108 109
Table 4: Exploration and Production
Reserves (FY2015) Production Remarks Sector Current Status
Crude Oil Proved oil reserves of 0.8 41.2 MMT (FY2015) India has proved oil reserves-to-production (R/P) of 18, as Refining India has 23 refineries, 18 in the PSU Sector, 3 in the private sector and 2 in joint venture.
Thousand million tonnes (TMT) compared to world R/P ratio of 50.7
Domestic installed refinery capacity: 230.1 MMTPA (FY2016)
Natural Gas Proved gas reserves of 29.2 BCM (FY2015) India has proved gas reserves-to-production (R/P) of 50.9,
Total refinery crude throughput: 232.86 MMT
52.6 Trillion Cubic Feet (TCF) as compared to world R/P ratio of 52.8
Refinery capacity utilization: 108.2%
Coal Bed Methane Prognosticated CBM resources 367.5 MMSCM (Nov Great Eastern Energy Corporation and Essar Oil have
(CBM) of about 92 TCF (2,600 BCM) in 2016) CBM-gas producing blocks in Raniganj, West Bengal. Petroleum Products Production: 231.9 MMT (FY2016)
12 states of India196
Consumption: 184.67 MMT (FY2016)
Shale Gas & Oil Recoverable shale gas resources Oil and Natural Gas Corporation Limited (ONGC) has identified 17 potential shale
High Speed Diesel (HSD) accounted for the largest share of production (47%) in the Indian refineries, followed
of about 96 TCF oil and gas sites along the eastern and western coasts of India.197
by MS (Motor Spirit) at 17%.
Gas Hydrates 933 TCF (Hydrate Energy Launched National Gas Hydrate Program (NGHP), along with the Ministry of
Retail Outlets As of October 2016, total of 57,393 retail outlets, 323 oil terminals/depots, 188 LPG Bottling plants, 18,214
International)198 Petroleum and Natural Gas (MoPNG), government institutes and Public Sector
LPG distributorships and 6,544 SKO/LDO Agencies.
Undertaking (PSU) companies199 200
Indian Oil owns the maximum number of retail outlets in the country (about 44.7%), followed by HPCL
(24.4%) and BPCL (24%); private firms own the remaining.
Growth drivers for the sector Focus on manufacturing through Make Fields Policy, 67 Discovered Small Fields City Gas Distribution CGD sector comprises of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG).
As part of International Energy Outlook in India initiative The government have been offered in 46 Contract areas (CGD)
As of Sep 2016, India had 20 CNG companies operating about 1,167 CNG stations across 12 states. As of April
2016, EIA projects that India and China will aims to increase manufacturing sector through the new Revenue Sharing
2016, the total number of PNG connections stood at 31,63,588.
account for about half of global energy contribution from around 17% of GDP to Model.204 205 206
demand growth through 2040, with India's 25% by 2022.203 In November 2016, the MoPNG announced eighth round of CGD bidding covering 8 geographical areas in
Increase in E&P spend - Oil & Gas players
energy demand growing at 3.2% per year. Haryana, Goa, Puducherry, UP and Maharashtra.207
Reduce import dependency - The Honble including national oil companies have
As per BP Energy Outlook 2016, India's
Prime Minister of India had outlined the planned significant investments to Strategic Reserves The government will set up two strategic oil storages at Chandikhol (Orissa), Bikaner (Rajasthan) with a
energy consumption is projected to grow at
vision to reduce import dependency to increase oil and gas output from existing combined storage capacity of 10 MMT to enhance oil security and protect supply disruptions. India has
4.2% per annum up to 2035, faster than all
the extent of 10% from current level by fields and also to develop new fields. signed a deal with Abu Dhabi National Oil Co (ADNOC) to fill half of an underground crude oil storage facility
major economies in the world201. The key
2022. The government had approved new at Mangalore, Karnataka.208 209 210
growth drivers are:
Hydrocarbon Exploration and Licensing
Robust GDP Growth - India's economy Policy (HELP), which will provide for a
has been growing consistently. The uniform licensing system for oil, gas, CBM Growth drivers for the sector In November 2016, the MoPNG India is looking to merge its existing
GDP growth rate has averaged at 6.9% etc., under a single licensing framework. India aims to increase the share of natural announced eighth round of CGD covering state-owned oil and gas companies
annually in the past 5 years.202 Further, under the Discovered Small gas in its energy mix from 6.5% to 15% by eight geographical areas.215 As of March to create a new company with a large
2020-21. To achieve this, India plans more 2017, India had 21 CNG companies balance sheet which will look for
than double its LNG import capacity to 50 operating about 1,197 CNG stations acquiring strategic assets globally
Refining, Transportation & Marketing
MT in the next few years by setting up new across 13 states in India.216 particularly in the upstream segment.219
Table 5: Refining, Transportation & Marketing LNG Terminals in the country.211 212 213
Focus on clean fuels India has made
Refining
Gas transmission pipelines using huge commitment as a part of COP-21 to
Sector Network (FY2016) Capacity (FY2016)
Viability Gap Funding (VGF) - The Cabinet reduce energy intensity in the economy. The government plans to roll out BS-IV
Pipeline network Total pipeline network: 42,486 Kms Crude oil pipeline: 140.5 MMT Committee on Economic Affairs had auto-fuels by 1 April 2017 and leapfrog
A ssisting implementation - The
approved the VGF of $1.93 billion for into BS-VI auto-fuels w.e.f. 1 April 2020,
Crude oil pipeline: 9,853 kms (9,365 kms onshore and Natural gas pipeline: 464.12 MMSCMD government has accorded CGD network
natural gas pipeline from Jagdishpur to which would facilitate major investment
488 kms offshore) the status of public utility. This will allow
Petroleum product pipeline: 97.7 MMT Haldia and Bokaro to Dhamra (JHBDPL). in refinery upgradation, auto industry,
the CGD system to increase its reach and
Natural gas pipeline: 17,658 kms This will develop gas network in the related manufacturing and services
make it comparatively easier to secure
eastern region of India, which has limited sector.
Petroleum product pipeline: 14,975 kms government licences and clearances.217
gas pipeline network currently.
The government has implemented
LNG Four operational LNG regasification terminals at Hazira and 30 MMTPA (Sep 2016) The government has in-principle
Growing CGD network - PNGRB has Ethanol Blended Petrol (EBP) Programme
Dahej (Gujarat); Kochi (Kerala); Dhabhol (Maharashtra) approved the decks for use of LNG as
authorised total 75 geographical areas as under which, oil companies will sell
an auto fuel. The draft norms for LNG
of FY17.214 ethanol blended petrol with ethanol
application in road vehicles will be ready
percentage of up to 10%. Further, the
in FY2018.218
Bio-diesel Programme, permits the sale
110 111
of Bio-diesel (B100) by private players & certification services; petroleum Total installed capacity has grown at 9% India has set an ambitious target of
Figure 46: India Total Transmission Line Length
to bulk consumers such as Railways and testing, refining and distribution per annum from 132 GW in FY2007 to generating 175 GW of power from
State Transport Corporations.220 services; engineering software 315 GW in FY2017 (up to Jan). Capacity 15,000,000 renewables by 2022, which will include
solutions, compliance services (with addition has been driven by private 100 GW of Solar power, 60 GW from wind
MoPNG constituted a Steering
Engineering standards) etc. sector investing heavily in coal and 10,000,000 power, 10 GW from biomass power and 5
Committee to implement the 'Make in
ckm
renewables based generation capacity. GW from small hydro power.224
India' campaign in oil and gas sector.
03. Global Delivery Centers (GDC) of Private sector is responsible for 64% of
Oil PSUs have formulated INDEG 5,000,000 The government has approved the Ujwal
EPCM companies, Oilfield Services the total capacity addition of 182 GW
(Indigenisation Group) to increase the DISCOM Assurance Yojna or UDAY, which
Companies and International Oil since FY2007. As a result, the share of the
domestic component in all kinds of oil 0 provides for the financial turnaround and
Companies in India private sector has increased from 13% of FY 07 FY 15
procurements.221 revival of Power Distribution companies
(GDCs providing EPCM services, R&D installed capacity to 43%.
Under the Start-up India Mission, Oil India services, information technology Below 66kV Above 66 kV (DISCOM).225 As of date, 22 states have
Transmission & distribution remain come under UDAY and power tariff
and ONGC have announced INR 500 services, finance/business support
largely in the public sector, with a few orders for 2016-17 have been issued in
million and INR 1 billion start-up fund to services).
notable exceptions. Capacity addition 18 states.226
foster and incubate new ideas related to
has been seen in transmission and
oil and gas sector.222 Electricity Services Figure 47: India State Sector Capex The Government has set target to
distribution as well, with PowerGrid
Under the Skill Development Initiative, Power sector has witnessed significant achieve 100 GW of Solar power by 2022.
alone capitalizing approximately 320,000
oil & gas PSUs are setting up 6 Skill private sector participation, skewed To promote investments in this sector,
million ($4,740.7 million) of projects in
100,000 87,025 86,946 83,239 the key initiatives include exemption
Development Institutes (SDIs) in the heavily towards generation sector. FY2016.
country. MoPNG, through Oil Industry from excise duties and concession
80,000
INR Million
Development Board (OIDB), has set up on import duties on components and
60,000 equipment and 10-year tax holiday for
Hydrogen Sector Skill Council (HSSC) for
oil & gas sector.223 Figure 44: India Generation Capacity by type 40,000 solar power projects. It is also providing
special incentives for exports from India
20,000 in renewable energy technology under
Opportunities in the oil and gas sector
01. Exploration & Production 350 315 0 renewable energy sector specific SEZ.227
FY 13 FY 14 FY 15
Oilfield service providers have the In February 2017, Indias solar power
250
opportunity to provide services in Source: Deloitte Analysis
sector recorded low-winning bids of INR
GW
the areas of drilling & oilfield services. 150 132

2.97 per kilowatt-hour (kWh) to build 750
Companies provide seismic services MW plant at Rewa in Madhya Pradesh.
50
such as surveying, interpreting and The low tariffprimarily due to low cost
Growth drivers and future prospects Poor financial health of the distribution
ascertaining the reservoir geology and -50 FY 07 FY 17 of financing the projecthas made solar
sector, especially in a few key states,
other drilling-related services such as With the significant capacity additions, energy a competitive source of energy.
is a significant hurdle to continued
directional drilling and mud logging; enhanced fuel availability and moderated
Coal Gas Diesel Nuclear Hydro RE development of the sector and proactive India and France launched a $1 trillion
onsite engineering, operational & demand profile, India is expected to
measures like UDAY, IPDS and DDUGJY programme to help members of the
maintenance services, manpower have a demand and energy surplus
have been rolled out to address the International Solar Alliance (ISA) countries
supply services; and those providing during FY2017. However, as access is
challenges. harness their solar resources.228
drilling mud, transporting oil/gas progressively enhanced and economic
from the reservoirs to the refinery, Figure 45: India Generation Capacity by entity activity picks up pace, continued The total hydro power generation
compliance services (with Engineering enhancement of capacity across capacity above 25 MW capacity in India
standards) etc. generation, transmission and distribution (as on February 2017) was at 44,413.42
350 315 will be required to meet expected MW. The government is taking initiatives
02. Refining, LNG and Pipeline demand. to restart the 20 stalled hydro power
250
Transportation projects totaling 6,329 MW. It has also
Companies have opportunities in the 150 132 sanctioned the proposal regarding basin-
GW
areas of EPCM services, technology Figure 48: India Power Sector Losses (INR million)
wise reassessment of hydro potential in
solutions, industrial technical 50 the country.229
inspection services; asset integrity 0%
-50 FY 07 FY 17
management services; corrosion -150,000 FY13 FY14 FY15 -5%
services; technical staffing & training
-10%
INR Million
services; hazardous areas testing State Private Central -350,000

-15%
-550,000
-20%
-750,000 -25%

112 113
15. Space
Potential for global expansion (IOR) techniques to improve the
average recovery rates. Oil field service
IT implementation. The demand for
operations and maintenance, metering
Industry profile
India and Russia have agreed to explore
providers can provide advanced and data management services is
building a gas pipeline to transport
technologies to help companies to expected to grow.
natural gas from Siberia.230
enhance oil and gas production.236
Retail supply remains bundled with the
India and the UAE have signed MoU in
India has announced an Open Acreage distribution function
the field of energy management and
Licensing Policy (OALP) for oil and gas In this scenario, and when shortages
conservation.231
exploration which will allow operators materialize again, the demand for
In terms of LNG import, India buys 7.5 to select areas where they want to drill. ESCO services to bring in efficiencies
MMTPA of LNG from Qatar. It expects to India will conduct auction of hydrocarbon across the consumer base and possibly,
commence a 3.5 MMTPA LNG contract blocks under OALP twice a year. The first demand response models is expected
with Sabine Pass Liquefaction Terminal in round is likely to occur in July 2017. to materialize. When retail supply is
the US in 2017.232 OALP will allow pricing and marketing unbundled to bring in competition
freedom to operators and shift to a at the consumer interface, it is
India supplies 500 MW of power to
revenue sharing model. It will give expected that there will be a demand
Bangladesh since 2013233. Further, India
an option for companies to select for consulting services in business
is set to invest $11 billion in Bangladesh
exploration areas based on the data structuring, legal and financial aspects.
power, LNG and port sectors.234
provided by Directorate-General of In operations, there is demand for
India and Nepal have joined hands Hydrocarbons in a National Data customer relationship management,
to build new cross-border power Repository. automated meter reading data
transmission lines.235 It will provide opportunity for oil field management and bill collection
Global space industry is valued at $335 Figure 49: Global Space Industry (2015, US$335.3 billion)
service companies to analyse seismic services.
Conclusion and recommendations and geophysical data and provide billion in 2015 of which the satellite industry
With increasing grid penetration of accounts for 62% $208 billion238 and Satellite Satellite Launch
more information about prospective
Indias crude oil production declined by renewable energy generators, grid includes satellite services, satellite launch Manufacturing 16.6 Industry 5.4
hydrocarbon blocks.237
1.36% to 36.95 MMT in FY2016, as against integration of intermittent generation services, satellite manufacturing and 5% 2%
37.46 MMT in FY2014-15, mainly due to Power transmission & distribution remain whilst maintaining grid security has ground equipment.239
shortfall of production in Mumbai asset, largely in the public sector, which typically become a challenge.
natural decline of mature fields and less houses most of the required capabilities The demand for generation forecasting Indias Department of Space (DoS) has
than envisaged production from new and and skills within the organization. to ensure adherence to schedules is the primary responsibility of promoting
marginal fields. Demand for consulting services during expected to grow. Further, analytics for the development of space science, Ground
Oil and gas companies have increased the development phase is subdued production optimization and applied satellite, technology and applications Equipment 58.9
focus on production optimization but growing. In the operations phase, research in generation technology and for development of national space 17% Satellite
in mature fields. Further, they are there is demand for consulting storage is expected to grow. infrastructure while the Indian Space Services 127.4
implementing Enhanced Oil Recovery services in capacity building (non- Research Organisation (ISRO), a 38%
(EOR) and Improved Oil Recovery technical), regulatory compliance and government institution under the DoS,
has piloted all Indian activities in the space
sector since its inception in 1969240. Some
Table 6: Services in Power Sector
of the initiatives successfully taken up by
Generation Transmission Distribution Retail supply Renewable Energy ISRO are:
Capex phase Consulting: Consulting: Consulting: Consulting: Consulting: Launched 87 spacecraft missions
engineering, legal, engineering, legal, engineering, legal, engineering, legal, engineering, legal, (including 2 Nano Satellites)
Non-Satellite
financial, business financial, business financial, business financial, business financial, business Exhibited 60 launch missions (including Industry 127.0
opportunities opportunities opportunities opportunities opportunities Scramjet-TD and RLV-TD) and 2 re-entry 38%
Operations phase O&M of assets Consulting: capacity Consulting CRM, AMR data Generation missions
building, regulatory capacity building, management, bill forecasting, analytics Source: Satellite Industry Report, June 2016v
Launched 8 student satellites
compliance, IT regulatory collection, ESCO for production
implementation compliance, IT optimization, R&D
implementation on generation tech &
O&M of assets
storage
O&M of assets
Metering & data
O&M of assets
management Metering & data
management
114 115
their satellites through ISRO owing to Opportunities

Figure 50: Global Satellite Market (2015, US$208.3 billion)
its excellent track record and low-cost New launches, launch order book and Opportunities
satellite launch services. space station Consortiums for production of
Satellite Launch
Cost of satellite launches in India are satellites and launch vehicles
Industry 5.4 Following the launch of 104 satellites,
nearly 30 to 40% lower compared to ISRO has floated industry consortiums
Satellite 3% ISRO plans to take two Google Lunar
other countries. for the production of PSLVs and Indian
Manufacturing 16.6 Xprize contenders to the moon on the
Low-costs are primarily due to lower Regional Navigation Satellite System
8% same PSLV and drive missions to Mars
wages, lesser cost of parts and (INRSS) satellites. ISRO has also outsourced
and Venus.
production, and small payload sizes. the manufacturing of two navigation
India has also developed expertise Currently, India has satellite order book satellites, Navic to a consortium of private
in multiple launch technology using a of around INR 2,800 million ($42.8 million) firms. The consortium will have private
single rocket. for third parties, which will take it around sector expertise in each segment such as
2-3 years to exhaust.250 electrical, software and others, required for
India is currently working on a Unified building a satellite255 256.
Ground The country is also in discussions for
Launch Vehicle (ULV), which will eventually
Equipment 58.9 contract manufacturing of meteorological
Satellite replace Geo-Synchronous Satellite Launch Private sector opportunities in
28% satellites with other countries along with
Services 127.4 Vehicle (GSLV) and Polar Satellite Launch satellite manufacturing
Indian industry.
61% Vehicle (PSLV). ULV will have the capacity to ISRO has invited private sector companies
launch 15,000 kg into low earth orbit (LEO). ISRO also awaits government approval for to participate in satellite manufacturing.
building its own space station.251 252 So far, private companies have only been
The Indian satellite industry includes supplying satellite components.257 Further,
satellite services such as satellite launch Satellite fabrication services ISRO has announced to develop a 100-acre
Source: Satellite Industry Report, June 2016v services, satellite manufacturing & hi-tech Space Park in Bengaluru, where the
ISRO Satellite Centre (ISAC), Bengaluru,
fabrication and ground equipment related private players will set up facilities to make
is the lead centre of ISRO for design,
to data management and analysis. subsystems and components for satellites.
development, fabrication and testing
Figure 51: India's space sector budget (INR billion) The opening up of the high profile satellite
of all Indian made satellites. ISRO has
Satellite launch services manufacturing sector is a part of the "Make
standardized design of major satellite
58.5 in India" initiative.258
Antrix, the commercial arm of ISRO, is subsystems in telemetry, tele-command,
48.4 45.9 the nodal agency for providing satellite power, control systems, structural
Opportunities for large industrial
Launch services for customer satellites, systems, spacecraft mechanisms, etc. It
manufacturers
on-board ISROs operational launch has outsourced fabrication and testing
ISRO is roping large industrial
vehicles namely, PSLV and GSLV.245 In activities to several approved players253
17.7 manufacturers to create engines, stages
14.7 FY2016, Antrix earned a revenue of and envisages to enhance industry
10.2 11.1 8.0 of rockets, propellant tanks, solar panels,
5.2 5.3 5.5 5.5 approximately INR 2,300 million ($35.17 participation towards production of
1.8 1.3 1.9 1.7 2.0 2.2 thermal control systems and electronics
million) through commercial launch subsystems, including component
packages required for satellites and launch
Space Technology Space Applications Space Sciences INSAT Satellite Establishment Autonomous services, which is about 0.6% of the procurement, fabrication, package
vehicles. Further, ISRO is currently in the
Systems Expenditure Bodies and Others global launch services market. assembly and testing.
process of developing a semi-cryogenic
For launching foreign satellites, a third ISRO also has a list of approved vendors engine. This will require indigenous
Budget Estimate 2016-17 Revised Estimate 2016-17 Budget Estimate 2017-18
launcher of higher payload capacity, GSLV which provide satellite sub-systems development of 35 materials and 22
Mk III is being developed and has been fabrication, testing, components and coating processes. Indian industries will
Source: India Budget 2017-18 tested successfully. It is expected to take design services such as Transpace help fabricate the hardware for the engine
its first flight during Q1 2017246 247. Technologies254, Alpha Design subsystems.259
As a part of the governments 12th Five Year The provisional financial resource two new ambitious Indian space science Technologies Private Ltd., Avasara
In February 2017, ISRO launched a record
Plan 2012-2017, ISRO has submitted a plan requirements for the missions as well missionsone to Mars and another to Technologies, L&T and Godrej and
of 104 satellites, taking its tally of foreign
for 58 space missions to be undertaken, as for advance investments for the Venus242. Dhruva Space, etc.
satellites launched to date to 180. The
which includes 33 satellite missions and realisation of missions during the early latest launch comprised three of its
India has been launching satellites for
25 launch vehicle missions241. phase of 13th Five Year Plan has been set own, while the remaining 101 were from
foreign countries for over 15 years. It has
Between 2012 and 2016, ISRO has at INR 550 billion ($8.4 billion) at (2011-12) six countries: US, Israel, Switzerland,
well established itself as a committed
been able to launch a total of 52 prices242 243. Netherlands, UAE, and Kazakhstan248 249.
player in the commercial satellite market.
space missions (meeting 90% of its
The government has increased its Space
planned 5-year target), including 26 The country has become a preferred
Budget estimate FY2017-18 by more
satellite missions and 26 launch vehicle destination for foreign satellite launches,
than 20%, to INR 90.94 billion ($1.35
missions. given the significant difference in costs.
billion). It will provide initial funding for
Many countries are keen to launch
116 117
Satellite data satellite remote sensing, Geographical not only start-ups, but also provides an Conclusion and recommendations Further, India needs to focus on setting
Information Systems (GIS), Space opportunity for SMEs to leverage cluster- ground rules for international space
National Remote Sensing Centre (NRSC) The government should encourage
Management and Data Analysis services based externalities such as technologies, cooperation with respect to other
at Hyderabad is responsible for remote private players in the industry to develop
to ISRO as well as to foreign space infrastructure and manpower to build countries such as the USA, China and
sensing satellite data acquisition and capacity and capability in pursuing
stations. space-based services.263 Russia. Unregulated international
processing, data dissemination, aerial space activities for future technology
cooperation can spur regional and
remote sensing and decision support for development.
Opportunities National Optical Fibre Network (NOFN) international insecurities.
disaster management. Further, Regional
BRICS to share data from remote plan There is a need to promote and develop a
Remote Sensing Centres (RRSCs) India can look forward to set up an
sensing satellites The Government is pursuing the National model for promotion of SMEs to capture
support remote sensing tasks specific independent space activities focused
BRICS nations have agreed to share spatial Optical Fibre Network (NOFN) plan of a larger share in the international space
to their regions as well as at the national think tank constituting distinguished
data on natural resources from their connecting the Gram Panchayats (GP) in market. The government could consider
level. experts in the space field. The think
remote-sensing satellites for optimum the country through the optical fibre cable instituting a national fund for promotion
tank will provide key insights on space
The Indian Institute of Remote Sensing utilisation of space assets. The initiative (OFC). Recently, OFCs in 76,728 GPs and of entrepreneurship in the space
program management, dual-use of
(IIRS) provides capacity building in will bring developing nations under the optical fibre in 64,599 GPs have been laid industry.
technologies, economic impacts of
Remote Sensing and Geo-informatics umbrella of space, opening possibilities which allows significant room for satellites
India expects development of allied space expenditures, new space laws,
through education and training of using excess capacities in the satellites. to contribute to Digital India.
technologies such as composites and insights on international cooperative
programmes260 261. Going forward, the space agencies of the
technology to play a vital role in the space agreements.266 267
BRICS nations will share similar data for Potential for global expansion
A s part of space cooperation between future demand of space tourism and
tele-education, tele-medicine, and a host of
India and Association of South East Asian India holds potential for global expansion space habitat due to its lightweight and
societal applications for mutual benefit.262
Nations (ASEAN), ISRO, is also working across several countries such as the US, better performance. Further, electronics
towards the establishment of a Satellite UK, Canada Germany, France, Korea, and and data analytics industry will grow
Growing NewSpace phenomenon
Tracking & Data Reception Station and Middle East. leading to enhanced collaborations in the
NewSpace is a worldwide phenomenon
Data Processing Facility in Vietnam for space industry.265
of enterprises expanding capacity and A s of date, ISRO has successfully
ASEAN Member countries. This facility
capability to develop space products launched 180 foreign satellites for 23 India could replicate the built-up of
is aims to acquire and process Indian
and service using private funding. It is countries.264 The US accounts for the Bangalore as an IT hub for the space
Remote Sensing Satellite data pertaining
challenging the traditional ways of space largest share of satellite launches, industry as well. Dedicated land should
to ASEAN region and disseminate to
services which have been otherwise followed by Canada and Germany. be allocated for space ventures and
ASEAN Member countries.
considered expensive and time-consuming. assistance should be provided to them
Various Indian companies provide Enabling NewSpace in India will impact in the start-up stage. Additionally, senior
ISRO and Antrix officers can mentor the
Figure 52: Foreign satellites launched by ISRO start-ups in space industry to ensure
114 they operate within the Indian space
policy framework and leverage technical
expertise to ISRO.
India is enhancing focus on NewSpace

companies which are building B2B
and B2C models which can scale
both nationally and internationally.
The B2B, B2C ecosystem in the space
industry has the potential of tapping
the IT infrastructure and extending it
11 10
8 to core software-based applications
6 4 of space-based information such as
3 2 1
Geographical Information Systems (GIS).
USA Canada Germany Singapore UK Algeria Indonesia, The Kazakhstan, The government support in NewSpace is
Switzerland, Netherlands, UAE, Korea, required to further catalyse the multiplier
Japan Isreal, Belgium, effect while steps are being taken to
upgrade the existing capacity of the
Denmark, Argentina,
space industry.
France, Austria Italy, Turkey,
Luxembourg
Source: ISRO
118 119
16. Railway Service

Industry profile
Indian Railway Station Development Corporation, in cooperation with China Railway Construction Engineering Group, will be
developing New Bhubaneshwar and Baiyappanahalli stations.
Indian Railways will form a joint venture with the Belgium government to develop and modernize the Mumbai Central, Jammu,
Jaipur and Varanasi railway stations to make them into commercial hubs.
South Korea has come forward to redevelop the New Delhi railway station, one of the busiest terminals in the country, as a world-
class facility.
French Railways is assisting its Indian counterpart in upgrading the track between Delhi-Chandigarh to facilitate running of trains
at a maximum speed of 220 km per hour.
Growth drivers for the industry Figure 54 : Trends in freight traffic (Million tonnes)
Growth in passenger traffic: The

passenger traffic is expected to grow to 975.2 1058.8 1107.0
804.1 892.2
15.2 billion by 2020, from 8.2 billion in
2016272. Urban population in India as a
percentage of total population, grew to
33% of total population in 2015 (from 31%
The Indian Railways is the largest employer in 2010), leading to surge in passenger 2008 2010 2012 2014 2016
Figure 53 : Trends in Passenger volumes (in billion)
in the country, employing 1.4 million traffic between urban and rural areas.
Additionally, rising income levels have Source: : Ministry of Railways
persons (as of December 2016). It is also
the fourth largest rail network after the 8.2 8.4 8.2 made rail travel affordable to a large
6.5 7.2 number of Indian population leading to a
US, Russia, and China. The 108,706-km personnel to operate bullet trains and Construction related services: Indian
network facilitates movement of 12,617 rise in passenger movement from rail.
other high speed trains being developed Railway Construction Co Ltd (IRCON), Rail
passenger trains. It has 6,853 stations, in the country. Indian Railways is expected India Technical and Economic Services
Growth in freight traffic: Increasing
240,000 wagons, 63,045 coaches, and to generate employment of 140 million (RITES) and Power Grid Corporation of
levels of industrialization across the
10,773 locomotives.268 2008 2010 2012 2014 2016 man-days in 2018-19273. According India Ltd (PGCIL) are coming together to
country is expected to increase freight
traffic, which is estimated to grow to 2.2 to Department of Industrial Policy & reduce carbon footprint by electrifying
Railways services is split into passenger Source: : Ministry of Railways Promotion (DIPP), FDI inflows into railways 24,000 km of railway tracks over the
billion tons by 2020, from 1.1 billion tons
services and freight services. The related components from April 2000 to next five years. Currently, about 2,000
in 2016272. Freight traffic via Dedicated
passenger traffic stood at 8.2 billion March 2016 stood at INR 47.6 billion ($710.9 km track is being electrified per year and
Freight Corridor (DFC) is also anticipated
in 2015-16, while freight traffic stood participation, establishment of a Rashtriya and capacity augmentation, and Foreign
to grow at a CAGR of 5.4% to reach 182 million).272 the aim is to reach 4,000 km per year by
at 1.1 billion tons during this period.269 Rail Sanraksha Kosh to ensure passenger Rail Technology Cooperation scheme.
million tons in 202122, from 140 million 2017-18 and 6,000 km in the subsequent
Freight remains the major revenue safety, and elimination of unmanned The Railways has identified 17 sectors Emerging opportunities: Indian Railways
tons in 201617. year. Through electrification, trains
earning segment for the Indian Railways, level crossing on broad gauge lines by in its operations to allow 100% foreign/ is among the biggest suppliers of
will run faster, reducing the energy bill
accounting for more than 67% of total 2020. It focussed on rejuvenation of the private investment including high speed Rise in demand for mass transit equipment including locomotives and
considerably and less emission of carbon.
revenues in 2015-16. The gross revenue of railway network through commissioning railway, freight corridors, suburban systems: Metro rail projects are being coaches to smaller nations in Africa, such
Indian Railways stood at INR 1,687.7 billion of 3,500 km of railway lines in 2017-18, lines, standalone passenger lines (hill envisaged across many cities over the as Benin, Angola, Tanzania, Mozambique,
($25.2 billion), and is expected to reach INR redevelopment of at least 25 stations in railways), passenger terminals, bio-toilets, next ten years, and an investment of $137 and Senegal. The Indian Railways is also
Export share of Indian Railways is just 2%
2,981 billion ($44.5 billion) by 2019-20.270 2017-18, installation of bio-toilets in all technological solutions for unmanned billion is expected in metro rail networks making plans to sell rail wheels to South
of the total world market of $175 billion.
coaches by 2019, and feeding of about level-crossings, mechanized laundries, by 2020272. Africa, a developed economy with a
There is a significant potential in rolling
The government has been investing 7,000 stations with solar power in the testing facilities, and construction of well-equipped railway system. RITES (a
stock and infrastructure services in the
heavily to upgrade railway infrastructure. medium-term. bridges. Role of Railway Services as key public sector undertaking under India's
countries of Africa, South America, Middle
The Union Budget 2017-18 allocated INR services sector Railway Ministry) recently exported
East, South East Asia, and CIS countries,
1.3 trillion ($19.7 billion) for capital and The Railways is also encouraging private Further, the government has partnered Indian Railways is planning to launch an 60 AC coaches to Bangladesh. It had
where India can play major role in tapping
development expenditure of Railways.271 players to participate in rail projects with foreign governments to aid integrated mobile application for availing also bagged a contract for the supply
this opportunity. Indian railways can
The budget envisaged enactment of a new through policy initiatives such as, modernization of the Railways: all travel-related services such as hiring of 18 MG diesel electric locomotives
leverage its strength in R&D, services and
Metro Rail Act to facilitate greater private Participative models for rail connectivity taxis, pre-ordering a meal, requesting to Myanmar Railways. Players such as
IT capabilities to gain entry in the world
for porter services, lodging at a retiring Koreas Hyundai Rotem and Bombardier
market by participation in railway oriented
room etc. According to railways, there will Inc., are also planning to export from
trade fairs and exhibition.
be a requirement of nearly 10,000 skilled India.
120 121
17. Professional Service

Indian Railways has plans to modernize its
Integrated ticketing system: The
railways is looking to move towards a
The Indian Railways has plans to modernize
Industry profile
railway infrastructure, and for that it seeks cashless ticketing system by installing its infrastructure to be at par with the best
to modernize its railway stations in a way 6,000 point-of-sale machines and 1,000 transit hubs in the world. The government
that would place them at par with the best ticket vending machines across its plans to invest INR 8600 billion (~$130
transit hubs in the world. network. An integrated ticketing system billion) for new tracks, faster trains and
such as use of multi-purpose card for station redevelopment, of this, INR 1
Operation and maintenance services:
electronic payment across multiple trillion ($15 billion) is expected to come
Several Indian players have been involved
modes of transport will simplify the ticket from the private sector. It is also moving
in operations and maintenance of railway
procurement process for passengers. It away its focus from fares and new trains
services. For instance, Larsen & Toubro
also has plans to launch an integrated to improving customer experience, for
bagged the contract for construction
mobile app through which the consumers which it intends to modernize identified
of sections of Mukundpur-Lajpat Nagar
can access all travel-related services corridors, revamp stations, make disabled-
line for Delhi Metro; Kalindee-VNC joint
including ticketing, hiring cabs and friendly stations, and double the average
venture was awarded the contract
porters. speed of freight trains, among others. It
for commissioning of sections of
is correspondingly looking at non-fare
Janakpuri West-Kalindi Kunj and Central Opportunities in mass transit: The
revenue streams, including advertising
Secretariat-Kashmere gate line for Delhi government is encouraging cities with
and land leasing. This ensures ample
Metro. Indian players can also explore a population of 2 million and above to
opportunities for the private players,
opportunities for export of train sets and develop mass transit systems, including
particularly as it has allowed up to 100%
other related equipment in Bangladesh, metro, monorail and light-rail systems.
FDI in a number of areas, including,
Myanmar, Sri Lanka, Mozambique and Around 50 cities in India are expected
operation and maintenance services, Professional services include a range Figure 55 : Accounting and Auditing production turnover (% Share)
other African countries, where RITES is to have a population of over 2 million by
manufacturing services, and signaling and of different occupations like Audit and
already an established player. 2050, creating abundant opportunities
infrastructure projects. Accounting, Management consulting,
for players in coach manufacturing, track
Technology and analytics: The Railways Architectural and Engineering and Legal
maintenance, signaling and electrification,
plans to use drones and geospatial services which provide support to different
ticketing and other support services. Financial Auditing
satellite technology to remotely review businesses across the world. Professional and Book Keeping
the progress of major projects. Union Station redevelopment: Focus on station service providers add value through 33%
Budget 2016-17 mentioned digital redevelopment projects will open up their advisory services to their clients to
analytics as one of the focus areas, with opportunities for private developers as improve productivity, growth by ensuring
the government planning to set up a well as for consultancy services. required compliance. This includes Insolvency
Special Unit for Transportation Research services like but not limited to taxation Services
Advisory services: The Indian Railways
and Analytics (Sutra) to analyze the data advisory, non-attest assurance/accounting 39%
is looking for advisory services in a range
collected by the national carrier, to gain services, associated compliance services,
of areas, including that in raising finance
business insights. management consulting in the areas of Tax Advoisors
through public private partnership
bringing productivity efficiencies, structural 28%
Dedicated freight corridor: Dedicated (PPP), setting up National Rail Transport
Freight Corridor Corporation of India University, generation of non-fare consulting in terms of engineering and
(DFCCIL) a Special Purpose Vehicle revenue, and optimizing asset base architecture. Professional services support
under the aegis of Ministry of Railways- is through analytics-based services. businesses of all sizes and in a wide range Source: Industry Capsule: Euromonitor, Deloitte Analysis
constructing Dedicated Freight Corridor of industries. The professional services
Research unit: To promote in key policy market size is $14.43 billion and there is
(DFC) along the Eastern (1,856 km
areas, the railways proposed setting up of a high growth in the export market with expertise developed by the profession revenue growth in 2015.275 The slowed
route length) and Western (1,504 km
SRESTHA (Special Railway Establishment 9.4% growth recorded in the first half of in regard to information technology has down M&A activities in 2015 and 2016 has
route length) parts of India, to enhance
for Strategic Technology & Holistic 2015-16274. resulted in accountancy firms becoming restricted the financial advisory services
punctuality of freight trains, for which it
Advancement), a special unit comprising among the world's largest suppliers of such revenue in India. However the anticipated
signed contracts worth INR 350 billion
of scientists and railway experts to Audit and Accounting Services consultancy services. rise of M&A activities in 2017 is expected
($5.2 billion) as of November 2016. It is
accomplish long-term research for The Accounting and Auditing services to restore the revenue directions. In 2015,
also looking at enhancement of the speed
improving its overall functioning. constitute the core activities of The accounting and auditing industry in Tax advisor services managed to earn the
of all Express trains on the Diamond
accountancy firms, i.e., evaluation of India is driven by double-digit growth in highest share of revenue with approximately
Quadrilateral High Speed Rail Network.
the reliability and credibility of financial the FDI inflows and the rising activity in the INR 49 billion while financial auditing and
information as well as a wide range of manufacturing sector due to the Make in book keeping services and Insolvency
additional services like assurance services, India initiative. The FDI inflow in India grew services revenue was approximately INR
merger audits, insolvency services, by 30% making India the fourth largest 43 million and INR 35 million respectively.
tax advice, investment services, and receiver of FDI after Hong Kong, China and The major accounting firms generated $128
management consulting. The internal Singapore. The sector recorded a 10% billion revenue globally in 2015276.
122 123
Domestic and global demand: The global demand of audit and accounting (AICPA) has highest accounting professions Potential for global expansion: The a Memorandum of Understanding (MoU) exponential demand to take care of the
economy is changing rapidly due to services. The large availability of talent with 664,532277 professionals, India also rising adoption of technology based audit with Chartered Institute of Australia, potential of supply of services getting
globalization and industrialization. Rising pool, low-cost structure and technology has a demographic advantage with The process, talent pool, niche expertise Canada, New Zealand, Ireland and Oman. generated in the country. For example,
tension due to increasing financial crisis driven outsourcing services in India makes Institute of Chartered Accountants of on cost, diverse portfolio offering and Presently, around 200000 members and renowned global companies setting up
around the world and rising international it the perfect destination for accounting India (ICAI) having 253,369278 members accounting standard makes India a hot 1 million students are pursuing the course there financial and accounting shared
trade activities implies to the importance and auditing services. Similarly, from a in comparison to Institute of Chartered destination for countries where Audit from ICAI in India. services centers in India is a big and non-
of accounting and auditing services across domestic perspective, rising growth of this Accountants in England and Wales (ICAEW) and Accounting is less developed. Under linear shift in the business model opening
the world. As a natural outcome, regulatory market, investments from global players, which has 147,000 members.279 developed countries in Africa and least Future prospects: Indias demographic up many new accounting and auditing
policies, laws and accounting and audit new business models in the technology developed countries like Afghanistan, advantage is well known. The syllabus profiles for the talent pool in India. The
standards are getting updated to respond space and ease of doing business are the Competitive profile: India has a plethora Myanmar provides opportunity for global of the Chartered Accountancy, Cost growth in the global market is reflected
to economic fallout and public outcry. growth drivers The new Indian accounting of accounting firms which are still new in expansion to the Indian firms. Institute Accountancy and Company Secretary in the operations of these shared service
Overall there is an increased awareness standards (Ind AS), converged with the market in comparison to large audit of Chartered accountants of India (ICAI) courses are aligned/being aligned to the centers, thereby creating the growth
and stakeholders expectations in the area International Financial Reporting Standard firms in the US, UK, and some other has signed MoUs with international global standards. Both these factors create prospects for Indian accounting/auditing
of public accounting. The geographical (IFRS) has been a catalyst of growing European countries with wide global bodies which will help in CAs practicing a tremendous opportunities for Indian services.
expansion and diverse business portfolios demand in the audit service space in India. presence. Global companies in India in different countries and will help in accounting and auditing professionals to
across the world has also created a While The American Institute of CPAs leverage experience, reputation, network increasing international trade. It has signed cater to the global markets. Also there is
and expertise to gain more clients and
revenue than smaller firms. However
Recommendations:
Figure 56: Accounting and Auditing Market Demand 2010-2015 (~$ million) smaller firms find it difficult to develop
industry-specific knowledge, technical
expertise due to poor financial health and
160
130 fall behind the bigger firms. FDI in the sector 46% in services Relaxation on FDI will attract more foreign funds and help in better exposure of the
106 Indian firms in global market and vice versa
90 There is a constant threat from South
73 Limitation related High Developing talent pool in India which is accredited for the global accounting and
73 Korean as well as Chinese markets which
to Licensing and auditing standards which will enable working with entities from different geographies
1,950 is a challenge to India niche expertise of
1,850 accreditation
1,580 low cost operation. The performance of
1,139 1,339
947 the market is forecast to decelerate, with
an anticipated CAGR of 7.8% for the five-
2010 2011 2012 2013 2014 2016 year period 2015-2020, which is expected
to drive the market to a value of $14.8 Management Consulting line and exploring new markets. The
billion by the end of 2020. Comparatively, Management consulting sector provides management consultancy market size is
Locally Produced Products RSP Imports RSP the South Korean and Chinese markets is specialized advisory services to help expected to be around INR 300 billion in
expected to grow with CAGRs of 2.7% and in management decision making in a India and is expected to touch INR 348
Source: Industry Capsule: Euromonitor, Accessed via EMIS 9.7% respectively, over the same period, to company. These services helps the billion by 2018281. The market is extremely
reach respective values of $8.7 billion and organizations in various ways like fragmented and competitive with and is a
$16.2 billion in 2020. Business Optimization and restructuring, combination of selected global and no. of
expanding new business, product small players.
Growth Drivers:
Figure 57: Sector Contribution to GVA (INR million)
Technology Accounting Cost Structure Domestic Market Diverse Portfolio
Standard 348
Digital Business Low Cost High Growth of domestic Wide range of
280 300
Process as a key New IndAS Quality audit market services other
248 261
differentiator converged with IFRS services than Audit and 236
New MNCs setting
Accounting
Software and Diverse accounting Global Exposure of up business in India
Cloud services in standard proficiency auditors due large IT services
Infrastructure,
Accounting presence of MNCs
connectivity and Consulting
talent
Back office
operations FY 12 FY 13 FY 14 FY 16 FY 18 (F)
FY 15

Contriburion to GVA (INR million)
Source: Dun & Bradstreet Research
124 125
Market segments: Figure 59: Export/Import market in $million
Management Engineering Socio-economic IT Consulting HR Consulting 30349

Consulting Consulting Consulting 28447 28482 28422 27644
25910 25788 27189
IT Strategy Workforce 24626 24083
Corporate Strategy Feasibility Study Urban planning Management
Performance
Regulatory Cost Estimation Rural Improvement Training &
strategy Development Development
Project IT M&A
M&A and JV Management Environment Leadership
IT Project
Impact Development
Restructuring & Project Lifecycle Effectiveness
Assessment
Cost Optimization
Engineering design
Renewable Energy FY 12 FY 13 FY 14 FY 15 till Dec 2016
Support
Export Import
Global and domestic demand: economic reform measures and rising The recent reforms in Indian economy Source: RBI
The global management and marketing trade activities. The US and Europe who and government initiative to boost
consultancy market had total revenues of represent 47% and 29% of the global manufacturing sector in India has also
Growth Drivers
$321 billion in 2015, representing a CAGR market share are the major players for playing a significant role to generate
of 4.5% between 2011 and 2015. There Indian consulting services sector while demand in the domestic market. The Indian Skilled Workforce Low-Cost Service Diverse capabilities Government Initiative
has been a constant rise in demand for other countries like Germany, UK, and education sector has 10,330 management
Large Talented human Low-cost management Talent with different New demand from
management and consulting services France are also popular in the consulting institutes with almost 700,000 faculties.
resource consulting services domain specific knowledge government initiatives
across the world due to Globalization, arena. The total enrolment in management
colleges in 2015-16 is around 2 million.282 English Proficiency Well connected tier-1, tier-i Consulting firms offering Government push to ease
Some of the management institutes are and metro cities diverse solutions of doing business and
Technology Savvy
Figure 58: Consulting market share known globally for the quality of education liberal trade policies
generation Availability of Infrastructure
and talent they produce. Talent pool in the
France Start-ups and Larges
management sector has been a strong
1% domestic market
point in Indias arsenal.
RoW
8% Export market: Source: Deloitte Analysis
United The Management consulting service sector

Kingdom in India has changed its stance, from being
an import market to becoming a major Future prospects for the industry initiatives to make India an attractive Make in India initiative and liberal FDI
5%
exporter in the last few years due to rise The Indian economy has witnessed strong market for manufacturing, service policy has attracted many foreign
of management consultant firms both in growth in the last few years amidst global outsourcing, research and development, investors to start business in India which
domestic as well as international market. economy crisis, political instability and etc. Initiatives like make in India, will create a huge demand for consulting
US
The US and Europe are the major export changing regulatory environment. The liberalization of FDI policy, etc. has opened services.
47%
destinations. government has introduced numerous the market to the global investors.
Recommendations:

Germany
10% Promotion and Low A promotional branding strategy is required to promote Indian firms in the
Branding international arena
Funding Need Based Homegrown small Indian firms need high financial support
Europe
29% Make in India Manufacturing Expansion of make in India activities to support export market
Source: Global Management & Marketing Consultancy Report, MarketLine Export promotion Not present in India Export promotion councils can help in export growth
council
Understanding Low access to global Research on global market to gain market knowledge
Global Market market data
Bilateral trade agreement to promote export growth
Information through affiliates and subsidiaries to understand the market
126 127
India is the fastest growing startup Global and domestic potential: high spending in architectural and planning institutes. The Engineering and Growth drivers: India has transforming Outsourcing spends: As per some global
ecosystem in the world and government Rapid urbanization and industrialization engineering services in European countries technology institutes constitute of 3,364 from a restrictive market to a platform analysts the spending in engineering
initiative startup India along with of the Indian economy has generated like the UK, France, Germany, Spain and undergraduate colleges, and 2,305 post for huge global investment. Though outsourcing services market is set to
technology savvy young population with huge demand for business and residential Italy as well as APAC countries like South graduate colleges while 3,851 diploma architecture and engineering services are increase as the demand for such services
entrepreneurial mindset are bringing new premises, especially in urban India, with Korea, Japan and Australia are the leading colleges.286 More investment in the in its nascent stage of development there is keep growing due to huge development
ideas into business. These fast growing rising investment in the real estate. export market. Engineering products architecture skill development is the need ample opportunity of growth in the sector initiatives across the world and rising
startups are creating a demand for Public and private spending on different exports from India was $62 billion in FY of the hour. According to India Council of due to liberal government policies, growing outsourcing competition from other
professional services in the country. infrastructure and real estate projects such 2013-14284. South America, Caribbean, Architecture, there are 40,000 registered domestic market, government initiatives countries.
as housing projects, railway projects, roads, Kenya, Iran and developing nations like architectural professionals in India287 and like make in India, smart city projects etc.
Liberal trade agreements are also helping Expectation of shorter project lifecycle:
ports and airport, etc. has given significant Cambodia, Peru, and Sri Lanka are the the demand is too high with 1.25 billion In a global environment low cost structure,
more and more trade export to the US Consumers today are well-informed and
opportunity to the sector. Government leading export market for engineering population in the country and high demand high availability of skilled workforce and
and European countries. knowledgeable when it comes to the new
spending on smart city projects are services285. for urbanization. The gap in demand language proficiency are the drivers of
technologies being used in engineering
also providing a platform for innovative means finding international talent. Though growth. Large presence of knowledge
Architecture and Engineering Services domain. Clients expect to have very short
architecture and engineering services. Talent/Skill requirement there are an ample amount of engineering process outsourcing for both architectural
For a developing country like India, project lifecycles and service providers
Indias exports in architectural and The country has total 6431 approved institutes, the quality of education is still and engineering services make India a
infrastructure development is a key are pressurized to meet these demands
engineering services were approximately Engineering and technology institutes a worry as only few top level institutes potential hub for R&D activities.
driver of growth. And that signifies and stay ahead of the competition in the
$6.9 million in 2014. In a global scenario while 171 architecture and 8 town manage to provide high quality education
the importance of architecture and market and grab the market share.
and employment opportunity. Future prospects:
engineering services in the country.
Start-up ecosystem: The emerging
Architecture and engineering services are Talent: There is a need to spend
Figure 60: Architecture Enrolment Competitive profile: The US, Western startup ecosystem in India will be helpful
the backbone of the construction services more on skilling and talent building.
Europe, and China are the major exporters to generate domestic demand as well
and covers several related activities, such 7,000 Number of professionals in the service
of architectural and engineering services as to create innovative architectural and
as advisory and pre-design architectural sector specifically in the architectural
and are challenges to Indian architectural engineering service solutions to cater to
services, architectural design, contract services are not enough to cater to the
and engineering firms. Japan, Germany, the rising domestic and global demand.
administration services, urban planning, future demand from urbanization and
Spain, and France are other leading Start-ups with innovative architectural
etc. Architectural and Engineering services 4,251 industrialization.
4,001 competitors in terms of architectural and idea can provide new solution to the lack
are often combined into projects offered by 3,898
engineering services market. of infrastructure issue in India.
one company. 3,412
The government initiative in India to

promote infrastructure development
Recommendations:
services are creating a large demand for
architectural and engineering services in Subject Present Status Recommendations
India. There are several policy changes
like allowing 100% FDI in the real-estate 2011 2012 2013 2014 2015 Trade Agreement Low activity Promote trade agreements for easier promotion of Architectural and Engineering
sector has made the market attractive for Services
Source: AICTE
foreign investors. Indias architectural and Export Body Not Present Agencies in different countries to promote architectural and Engineering services by
engineering sector is mostly fragmented connecting Indian companies to new clients
with more than 50,000 players in the
Figure 61: Leading Exporters 17
market. The top players represent only 5% Promoting Indias Low Participate and promote in global events
of the total market. The Architectural and Expertise
Engineering services in India is expected to Mutual Recognition Unknown Mutual Agreement with statutory bodies of other countries with potential demand for
reach around $1.5 billion by 2018 growing Agreements services
at a CAGR of 14.2%283. The sector mostly 12
consists of B2B segment which represents LLPs with private Not Allowed Allowing will help in the growth of the sector with higher compensation and
around 99% of the total size. Public companies investments
administrator, defense and social security
are the major areas of investment. With
rising demand there is a need for more
man power as well as skilled labors in the
sector.
3 3 3
Japan Germany Spain UK France

Source: Euromonitor via ISI Emerging Markets
128 129
18. Tourism & Hospitality

Legal
Proper implementation of laws and
Growth Drivers Industry profile
regulations requires a well-functioning legal
Large Talent Pool Versatile Skills
service sector. With increasing globalization
and constant policy reforms in India, Large talented human resource Expertise in legal activities like
more and more companies are willing to Merger and Acquistion
Skilled workforce with English
setup their business in India which creates
proficiency Infrastructure financing
a demand for domestic legal services.
Increased level of globalization and 1200 Law colleges Public Private Partnership
international trade has helped the Indian
70-80 thousand enrolments in law
legal services sector to expand as there is
colleges every year
more requirement of documentation, legal
advice on setting up and structuring the
business. The sector is one of the most
restricted sectors both in India as well as enter the international market (including estimates, the UK accounts for around
globally. The market grew by 6% in 2015 tie-ups with global players) which is 10% of the global market for legal services,
in comparison to 17% CAGR growth over putting pressure on Indian government for second only to the US. It is also the largest
2010-2015.288 While the revenue growth liberalization of the sector. The US and UK market in Europe, accounting for around
is fueled by government initiatives to ease are the largest legal markets and provides a fifth of its legal services fee revenue.291
regulations on foreign investments and export potential for India. The UK is the worlds most international
rising demand of domestic market, the market for legal services and it offers
decline in the mergers and acquisitions Talent pool: unrestricted access to foreign firms with The value of the restaurant and hotel very important to the economy. There are Direct contribution of the sector is in Indias
deal value is a barrier to the revenue Indias legal profession is the worlds over 200 foreign law firms from around 40 industry is expected to continue to grow at around 2,333 number of hotels spread GDP estimated to be $47 billion in 2016.
growth. Also Indian companies enhancing second-largest, with more than 600,000 jurisdictions present in the UK. The US is a rate (averaging 8.1% annually throughout across various categories; 1/2/3/4/5 star, The sectors total contribution to GDP is
their footprints globally (subsidiaries, lawyers in more than 500 legal practices another major market in the Legal Service the forecast period), as India seeks to heritage hotels, apartment hotels, etc. in expected to increase to $136.2 billion by
associates, etc.), there is an increased level nationwide.289 There are around 1200 law exports. China has started legal exports develop and diversify the types of tourists India, which serves around 79,000 rooms, the end of 2016. The total contribution
of compliance requirements. This opens up schools in India with around 70,000-80,000 with major law firms setting up offices in served. Its value will increase from $28.1 in the Country, as on 31 December, 2014. of travel & tourism to Indian GDP is
opportunity for Indian law firms to increase enrolments every year.290 China. billion in 2016 to $39.8 billion by 2020.292 forecasted to increase by 4.97% per annum
their sphere of operations. While the hotel and restaurant industry India ranks third among 184 countries in to $280.5 billion by 2026.
Competitive profile: Countries like the contributes less than 1.5% of GDPa share terms of total contribution of tourism to
Domestic and global demand: US and UK has the advantage of organized that will be maintained in the next five GDP of 7.5% in 2016. In 2015, the total contribution of Travel and
Under current regulations, foreign law law firms and are home to most of the big yearsthis merely attests to the diversity Tourism to employment was 8.7% of the total
firms are not allowed to practice in India. players in the sector. The sectors trade and strength of other industries, such as employment. It is expected to rise by 3.0% in
But there is an increasing number of surplus has nearly doubled over the past IT, mining and infrastructure, which remain 2016 and by 1.9% pa to 9% in 2026.293
foreign multinational companies are decade to 3.4 billion in 2015, while the
looking to enter India for other business sectors contribution to the UK economy
opportunities in the legal sector. Some of increased to a record 25.7 billion in 2015 Figure 62: Total contribution to GDP (in $ billion)
the Indian companies are also eager to 160.2
(1.6% of GDP). According to TheCityUK
Recommendations:
120.3
Subject Present Status Recommendations 105.2
Liberalization Restricted Requires FDI allowance for better growth, allowing foreign firms to enter Indian 89.2
85 86
marketServices 77 74
70 86.9
Increasing Entry Low entry threshold All India Bar Exam need to increase the entry threshold to create raise the quality of 65
threshold legal professionals in India like ICAI 57
47
40.1 42.8
Legal Infrastructure Poor Requires more courtrooms and infrastructure 36
26 31 31
25 24
Right to Advertise Unknown Advocates and Legal firms can create greater brands when allowed to advertise. This 18
will help in better quality of service
2006 2007 2008 2009 2010 2011 2012 2013 2015 2016 2026 (E)
Direct Contribution Indirect Coutribution
130 131
Figure 63: Total contribution to Employment (in %) FDI in tourism and hospitality sector $0.8 billion. Hotel bookings is one of the hotels located around UNESCO World projects sanctioned during FY2016-17
The tourism and hospitality sector least penetrated segment within the Heritage sites (except Delhi and Mumbai). include Belur (West Bengal), Dwarka
7.05 generated FDI inflows of INR 73.5 billion in travel categories in India; online bookings 100% FDI is allowed under the automatic (Gujarat), Hazratbal (Jammu & Kashmir),
6.55 2016, and a cumulative inflow of INR 544.48 account for 16% of the hotel booking route in tourism & hospitality, subject to Kanchipuram and Vellankani (Tamil
6.15 billion during Jan 2000 to Dec 2016.297 currently. In Europe, 70% of hotel rooms applicable regulations and laws. 100% FDI Nadu).
5.8
5.5 5.5 are booked via online booking portals allowed in tourism construction projects,
5.31
4.94 Visa approvals: As on 31 December,
4.63 Currently, 100% FDI is allowed under while it stands at 35%-50% in the US. including the development of hotels,
4.37 2016 the e-visa facility is available under
the automatic route in the tourism & resorts & recreational facilities
Destination Management 3 sub-categories i.e. e- Tourist Visa,
hospitality sector. 100% FDI is also allowed
3.2 3.2 Organization (DMO): These are State incentives: Incentives offered by e Business Visa and e Medical Visa.
in tourism construction projects, which
marketing organisations which initiate state governments include subsidised E Visa facility has been extended to the
include development of hotels, resorts &
a standardized procedure to market land cost, relaxation in stamp duty, and nationals of 161 countries.303 E-medical
recreational facilities.298
a destination. They are designed to exemption on sale/lease of land, power Visa provides visa for foreign travellers
Domestic expenditure on tourism: bring visitors in touch with marketers tariff incentives, concessional rate of visiting India for medical treatment under
Domestic expenditure on tourism has (providers of tourism products and interest on loans, investment subsidies/ Indian systems of medicine.
grown significantly; by the end of 2016, services). They are perceived to manage tax incentives, backward areas subsidies
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Pre-loaded sim cards to foreign tourists:
the market is projected to reach $96 a destination evolving into a "total and special incentive packages for mega
In February 2017, the Ministry of Tourism
billion, representing growth at a CAGR of destination management system". Some projects. Incentives are provided for
Direct Contribution Indirect Coutribution announced to provide pre-loaded sim
5.4% during 2008 16, which is further of the international DMOs are present in setting up projects in special areas the
cards to foreign tourists arriving India on
anticipated to increase to $332.4 billion India. North-east, Jammu & Kashmir, Himachal
e-Visa. Bharat Sanchar Nigam Ltd. (BSNL)
by 2025.299 Pradesh and Uttarakhand.
will distribute pre-loaded SIM cards to
Growth drivers for the industry
In 2016, Foreign Tourist Arrivals (FTAs) During January-December 2016, a total of Capital investment in the tourism Incentives from the Ministry Of foreign tourists on e-Visa, initially at New
in India was 8.9 million as compared to 1.07 million tourists arrived on e-Tourist sector: Capital investment in the tourism Robust demand: Foreign tourist arrivals Tourism: These include assistance in Delhi airport and later in the remaining 15
8.3 million in 2015294. This is forecasted Visa as compared to 0.44 during January- and hospitality sector is expected to expected to increase at CAGR of 7.1% large revenue-generating projects, international airports.304
to increase at a CAGR of 7.1% during December 2015, registering a growth of increase at a CAGR of 6.2% during over 200525. India recorded 8.9 million Support to PPPs in infrastructure
Multi-Lingual Tourist Info Line: The
20052025. According to the World Tourism 142.5%. The growth was mainly attributed 200916. By 2025, investments are foreign tourist arrivals in 2016, listing an development such as viability gap
ministry operates a 24x7 Toll Free
Organisation, foreign tourist arrivals in to introduction of e-Tourist Visa for 161 expected to increase to $125.9 billion.300 annual growth of 4.5% over the previous funding, Schemes for capacity-building of
Multi-Lingual Tourist Info Line in 10
India is expected to reach 15.3 million by countries as against the earlier coverage of International hotel chains are increasing year. By 2020, medical tourism industry service providers.
International Languages to provide
2025. 113 countries.296 their presence in the country, as it will of India is expected to touch $8 billion.302
Infrastructure: More than half of the information and assistance to domestic
account for around 47% share in the A separate board has been formed by
Ministry of Tourisms Plan budget is and international tourists while travelling
The share of FTAs in India during December Foreign exchange Earnings (FEEs) from Tourism and Hospitality sector of India by the Ministry of Tourism for this purpose
channelized for funding the development in India.
2016 among the top 15 source countries tourism was INR 1,556.50 billion in 2016, 2020 and 50% by 2022, increasing from which is expected to drive the growth in
of destinations, circuits, mega projects
was highest from US (18.33%) followed by, witnessing growth of 15.1% from 2015. 44% in 2016. coming years. Set up of National Medical and
as well as rural tourism infrastructure
Bangladesh (13.02%), UK (11.71%), Australia Wellness Tourism Board: The ministry
Collective government spending Growing demand: Domestic expenditure projects.
(5.43%), Russian Fed (4.18%),Canada has constituted a National Medical &
on tourism: Governments collective on tourism is expected to rise due to the
(4.13%), Malaysia (3.38%), Germany (2.80%), Wellness and Tourism Board to provide
spending on tourism and hospitality growing income of households. A number Government Initiatives
China (2.53%), Sri Lanka (2.25%), Singapore institutional framework and promote
sector, in 2016, stood at around $2.2 of niche offerings such as medical
(2.12%), France (2.01%), Japan (1.79%), Swadesh Darshan: 13 thematic circuits medical tourism, wellness tourism and
billion.301 During 2008-2016 (till March tourism & eco-tourism are expected to
Afghanistan (1.38%), and Nepal (1.34%).295 have been identified for development: Yoga, Ayurveda Tourism and any other
2016), collective government spending on create more demand.
North-East India Circuit, Buddhist Circuit, format of Indian medicine covered by
tourism sector is expected to grow at a
Attractive opportunities: India has Himalayan Circuit, Coastal Circuit, Krishna Ayurveda, Yoga, Unani, Siddha and
CAGR of 6.8%. By 2025, the governments
Figure 64: FDI in Tourism (in INR billion) a diverse portfolio of niche tourism Circuit, Desert Circuit, Tribal Circuit, Eco Homeopathy (AYUSH).
collective spending is expected to
productscruises, adventure, medical, Circuit, Wildlife Circuit, Rural Circuit,
73.54 increase to $7.0 billion. Adventure Tourism: The Ministry has
70.03 wellness, sports, MICE, ecotourism, film, Spiritual Circuit, Ramayana Circuit &
48.65 issued guidelines for the approval
22.32 Online travel (OTA): OTAs offer single rural, and religious tourism. Heritage Circuit. During FY2016-17, the
of Adventure Tour Operators. It has
marketplace for all travel related needs. ministry has sanctioned 31 projects
Diverse attractions: India offers also formulated a set of guidelines on
Online Accommodation Reservation under this scheme, with Central Financial
geographical diversity, attractive Safety and Quality Norms on Adventure
Services specialize in accommodation Assistance of INR 26 billion and INR 5
beaches, 30 World Heritage Sites and 25 Tourism as basic minimum standards for
look-up and bookings. Rate parity is billion.
biogeographic zone. adventure tourism activities.
the offering of same price for the same
Pilgrimage Rejuvenation and Spiritual
room night regardless of the distribution Policy support: The Visa on Arrival Trained manpower: As part of
Augmentation Drive (PRASAD): 25
channel. Indian online hotel industry to scheme was extended to 180 countries the Ministrys initiative to generate
sites of religious significance have
be $1.8 billion by 2016 from the current in 2016. A five-year tax holiday has been professionally trained manpower
been identified for development
2013 2014 2015 2016 offered for 2-, 3-, and 4- star category to meet the needs of the tourism &
under the PRASAD Scheme. The
132 133
hospitality industry, 42 Institutes of Hotel Special boards: The Ministry has set up a advantage of its 7,500 km coastline to tap Improving inner capabilities such as Quality A ggressive tourism marketing
Management (IHMs) (21 Central IHMs Hospitality Development and Promotion growth potential of the cruise tourism of People engaged in Tourism & Hospitality strategies: Tourism ministry should
and 21 State IHMs), and 10 Food Craft Board (HDPB), which will monitor and segment through its Sagarmala Project through better program/trainings for surely pursue aggressive online and
Institutes (FCIs), have been set up with facilitate hotel project clearances/ which was established in July 2015. deploying quality people across this other marketing strategies to promote
financial assistance from the Ministry of approvals. sector; Infrastructure and Connectivity India as a must-visit location. Whether
Rural tourism: The potential for the
Tourism. of the network spread for tourism, it is broadcasting Incredible India
Project Mausam: Under Project development of rural tourism in India is
Professionalism, Hygiene and Safety to campaigns abroad, holding tourism
International Advertisement Mausam the government has proposed high as most of its population resides
provide world class facilities for tourism. seminars or offering Indian locations to
Campaign: The ministry has launched an to establish cross cultural linkages and in rural areas. This can benefit the local
promote foreign film productions in the
International Advertisement Campaign to revive historic maritime cultural and community economically and socially,
Conclusion and recommendations country.
in electronic and digital media for FY economic ties with 39 Indian Ocean and facilitate interaction between tourists
To promote multiple tourism (Rural,
2016-17 on leading Television Channels countries. In 2015, Government of India and locals for a mutually enriching Sell niche tourism areas separately:
Adventure, Medical, Heritage, Luxury,
including CNN, BBC, Discovery & TLC linked China Silk Road project with Project experience. India is currently in a position where
Eco-tourism and Pilgrimage) tourism, the
, Euro News, History, CNBC, Travel Mausam. it can make a cash cow out of selling
Eco-tourism: India is often termed as following factors need to be considered:
Channel, CBS (USA), Tabi (Japan) and RMC customized experiences, luxury spa
a hotspot of biodiversity and this rich
(France) and Google. Future prospects of the industry Allow corporate sponsorship for sessions, rare animal sanctuaries,
natural heritage is unparalleled in many
heritage buildings: An effective solution religious pilgrimage tours and extreme
MoUs for developing tourist places in Medical tourism: The presence of ways. Such a valuable resource base
for this would be to outsource the Himalaya tours.
states: As on February 2017, the State world-class hospitals and skilled medical gives impetus for the practice of variety
maintenance and exterior lighting of the
Governments of Chhattisgarh, Gujarat, professionals makes India a preferred of alternate tourism forms, many of which
heritage monument to corporate giants
Karnataka, Rajasthan and Uttarakhand destination for medical tourism. Indias are already in existence.
in return for some branding opportunity
have signed 86 MoUs for developing earnings from medical tourism could
at the monument.
tourist places in their respective states. exceed $8 billion by 2020.305 Tour Potential for global expansion
operators are teaming up with hospitals The rising number of foreign tourist Create experiences, not sightseeing
Allocation for North- Eastern regions:
to tap this market. arrivals from different parts of the world spots: The tourism industry which
The Ministry provides complimentary
suggests that there is huge scope for India includes the government and private
space to the North Eastern States, Cruise tourism: Cruise shipping is one
to attract the foreign tourists. Below is the players, needs to manipulate destinations
in the India Pavilions set up at major of the most dynamic and fastest growing
comparison of number of arrivals in India as experiences and not sightseeing
international travel fairs and exhibitions. segments of the global leisure industry.
during 2014 and 2015 with some of the point alone. Be it botanical gardens,
It also provides Marketing Development Government of India has estimated that
countries/geographies experiencing high architectural monuments, backwaters,
Assistance (MDA) to tourism service India would emerge with a market size
number of arrivals.306 the Himalayas, the tourism ministry
providers to undertake promotional of 1.2 million cruise visitors by 2030
should see the potential of a place to
activities overseas and also in India. 31. Moreover, India is looking to take
attract tourists rather than merely
banking on the natural beauty of a place.
Build great roads and access points: It is

Country/Geography 2014 2015 Percentage change 2015/14
critical to build good roads and approach
South Asia 1694857 1946207 14.8 points to a certain tourist destination.
Packaged train travel, easy bus
Western Europe 1860580 1880203 1.1
connections and safe car hire services
North America 1387468 1494930 7.7 with knowledgeable personnel combines
with great freeways and highways should
South East Asia 685805 700298 2.1
be explored.
East Asia 546792 555770 1.6
West Asia 413678 417616 1
Eastern Europe 422278 331051 -21.6
Australasia 286294 312101 9
Africa 280754 293569 4.6
Central & South America 69926 70831 1.3
Not Classified 30667 24557 -19.9
134 135
19. Wellnes
Industry profile Around two to three decades back, the
wellness industry saw its nascent and
healthcare, beauty, hospitality and more,
participating in it directly or otherwise. The
next 5 years.308 The industry can achieve
about $23 billion by 2020.309 The rural
unstructured, yet promising beginnings. young population; emerging middle class; population too is joining the mainstream
The concept of wellness has since become rising disposable incomes; and growing with improvement in linkages with the cities
a globally accepted phenomenon. consumer interest in health, travel, and by roads, telecommunication and the firms
Indian traditional yoga, interestingly, new experiences are all fueling strong reaching out to the people in villages and
has become the favorite flavor and an demandleading the Indian wellness small towns.
integral part of all wellness spas, centers industry on a growth trajectory. Indias
and festivals worldwide. There has been wellness market in 2015 was estimated at The wellness market offerings are
an unprecedented and steady growth approximately $13 billion and it is expected segmented on the basis of services as
in this sector, marked with sectors like to grow at a CAGR of nearly 12% for the follows:
Segments Services
Beauty Care Salons and Beauty Centers, Cosmetic treatments
Alternate Therapy Treatment Centers for Ayurveda, Homeopathy, Unani, Naturopathy, etc.
Spa & Wellness Centers Spas & Rejuvenation Resorts
Nutraceutical Dietary Supplements and Functional Foods
Fitness Products & Centers Fitness Centers, Slimming Centers, Gyms

Influenced by modern lifestyles and lead to a state of holistic health, ranging Globally, wellness industry represents a
increased awareness, wellness industry from physical, mental, social to emotional, $3.7 trillion economy, with a growth of
is growing at a tremendous pace with an spiritual wellbeing. The whole idea of 10.6% from 2013-2015.307 Majorly there are
Beauty Care Alternate Therapy generating approximately $0.6 billion. India
increasing share of the global economy. wellness is going back to the ancient ten sectors which are part of the wellness
Increasing awareness and growing India has an unmatched heritage will continue to be a hot spot for medical
Wellness is defined as the active pursuit timesbecoming preventive rather than ecosystem, including beauty, tourism, spa,
aspirations of consumers to look good represented by its ancient systems of tourists that seek travel services that
of activities, choices, and lifestyles that curative. fitness.
has opened up the beauty and wellness medicine which are a treasure house of incorporate diverse wellness packages.
market. Currently, it is estimated at $6.5 knowledge for both preventive and curative
Figure 65: Global wellness economy billion with a focus of moving the sector healthcare. Under its prime focused Make The India's Spa Industry is relatively young
towards a more organised space.310 This in India campaign, government is giving by global standards, however, it is also
sector is expected to grow with a CAGR impetus to meet the rising demand in India the home to key pillars of the ancient and
of 24% in next ten years posing huge and abroad for the ancient healthcare modern spa industry, Ayurveda, Yoga,
Complementary growth opportunities for FMCG and other systems. The Government of India has Meditation, etc. Such very authentic
& Alternative Wellness companies.311 We are also seeing a shift in set up a dedicated Department of Yoga, services related to the country can be
Medicine Tourism consumers from modern beauty methods Ayurveda, Naturopathy, Unani, Siddha and incorporated at a level not as easily
$199b Thermal $563b to traditional remedies, including herbal, Homoeopathy (AYUSH). The department obtained around the globe.
/ Mineral Ayurveda etc. A few of the factors driving is entrusted with the responsibility of
Springs growth in this industry are as follows: developing and propagating officially Regionally, it is mainly dominated by North
Preventive & $51b 01. Demographics of India, approximately recognized systems, namely, Ayurveda, India followed by Mumbai in West. South
personalised 60% population are in the age bracket Yoga, Naturopathy Siddha, Unani, and India is more known for its Ayurvedic
Spa Beauty &
Medical and of 15-54.312 Interestingly, there is a Homoeopathy. flavor. Thermal bathing, advanced beauty
Industry Anti-Aging
Public Health rising aspiration among Indian/India's treatments, medi-spa services, and male
$99b $999b
$534b men towards the beauty care which The AYUSH sector has an annual turnover grooming are becoming increasingly
has resulted in a growth of 42% in the of approximately $2 billion.314 The sector popular around the world. However,
Workplace
last five years in the mens grooming is dominated by micro, small and medium India has yet to fully explore application
Wellness
market. enterprises, accounting for more than 80% of these trends within its own spa and
$43b
02. Easy access to beauty and wellness of the enterprises, located in identifiable wellness market. Horwath Health and
Wellness products through online shopping; geographical clusters. Wellness strongly believes that, in India,
Healthy Eating,
Fitness & Lifestyle currently around 62% young financial opportunities exist beyond luxury
Nutrition &
Mind-Body Real Estate consumers buy online in metro cities.313 SPA & Wellness Centers hotel spas. The fact that Ananda in the
Weight Loss
$542b $119b 03. Increase in the number of beauty Substantial expansion in travel and tourism Himalayas, located in Narendra Nagar,
$648b
salons and spas in the country. industry as well as a rise in income has Uttarakhand, is Indias only currently
04. Rise in awareness and availability of made Spa as one of the fastest growing operational destination spa of global
Herbal and Ayurveda products. industry in India after America and repute clearly demonstrates room for
Source: Global Wellness Institute Europe. Annually, Spa industry in India is growth in this market segment.
136 137
On the other hand, the large domestic grow in these cities, high real estate costs A vast infrastructure with a dedicated forms the core target group for D. F
acilitators: Facilitators include Conclusion and recommendations
audience also likes to experience western/ will drive players to look at tier 2 and 3 Central Council of Indian Medicine, wellness products and services.318 employers, insurance companies and As more people around the world turn to
modern/foreign spa and wellness cities for growth. Hence, a higher growth in Central Councils of Homoeopathy India's growing middle-class is schools, who are likely to play a key wellness focused activities and lifestyles
modalities. So, a clearly identified and the premium and mid-end of the market is (Regulatory Councils) and five Central fueling demand for wellness role in encouraging and inculcating to mitigate their mounting stress and
well-structured differentiator for every anticipated. Councils for Research, one for each products. pro-wellness habits among consumers deteriorating health, the wellness economy
respective spa needs to be developed. AYUSH system. There are seven National Increase in discretionary spends is going forward. Employers, too, is positioned to expand at a healthy pace.
Drawbacks are the scarcity of trained team Growth drivers for the industry Institutes (two for Ayurveda and one each positive for the industry. have started providing a supportive Wellness sectors are positioned to grow as
members and the missing know how of for other systems), two North-eastern Rising incomes are resulting environment to promote wellness as an increasing share of the India economy,
An emerging global middle class with
modern management of spas services and institutes to cater to needs of a specific in increasing discretionary part of employee's lifestyle. propelled by demographic and consumer
rising disposable income and favorable
processes. In addition, Indian developers area, two Pharmacopoeia Laboratories, expenditures. E. Government: The Government wears trends, as well as an evolving collective
(young) demographics focused on
tend to call in specialists (like us) far one Pharmacopoeia Commission for A spirational products and multiple hats in its roles as a provider, consciousness toward global wellbeing.
improving the quality of life and their
too late, thus leading to not always well Indian Medicine, a National Medicinal services are finding many takers. facilitator, enabler and regulator in the Given the potential in this sector, a gradual
future outlook.
conceptualized spas. Plants Board and a public sector Growing urbanization is resulting in industry. Recognizing the importance improvement over the below aspects
An increasing consumer interest in undertaking for manufacture of higher awareness levels. of this industry, the Government has would surely lay a strong foundation to tap
Nutraceutical maintaining and improving lifestyle and standardized Ayurveda and Unani The urban population constituted already initiated some measures to this uncommon sector, with high potential
Riding high on around 20% annual health and moving from curative to medicine. 28% of total population in 2001, stimulate growth. business opportunities:
growth in past six year, the nutraceuticals preventive healthcare this is estimated to increase to
An increasing inbound tourism from the Skilled manpower: There is an urgent
market in India is expected to double to 37% in 2025. Government initiatives
A collective, growing awareness and USA, UK, Australia, and UAE for Ayurveda, need to skill the workforce and standards
$4.1 billion by 2020.315 Drug Marketing B. Providers: Providers offer wellness
education among the consumers around Yoga, etc. Make in India: In India, a separate need to be defined which should be
and Manufacturing Association (DMMA) services and products to meet the
wellness. Ministry named AYUSH has been formed, followed across the industry. Private
estimates that the nutraceutical industry A strong growth in wellness tourism, hygiene, curative and enhancement
which will have a Department for YOGA. players can work with government to
is likely to grow by 16% CAGR over the next A strong support by the Government faster than global tourism, as more needs of the consumer. Wellness
The market has the potential to generate formulate guidelines on education and
five years. Rise in lifestyle diseases such by recognizing Wellness as one of consumers aspire to higher levels of services bouquet accounts for 40%
three million job opportunities. India training institutes.
as diabetes, blood pressure, obesity and the priority sectors in its Make in India wellness and incorporate this intention of the total wellness market in India.
is also the second largest exporter of
cardio vascular problems are driving the campaign. into their travels. India is ranked 12th in the The beauty care market comprises of Minimum wage rate: There is need to fix
Ayurvedic and alternative medicine in the
high demand of nutrition supplements. Global Wellness Tourism ranking in 2015. cosmetic products, salons and cosmetic the minimum salaries for different levels
An increasing interest in natural world. The country has also developed
Currently this market is dominate by treatment centers of training with standard pay scale for
remedies and old traditions of Ayurveda, Switzerland recognized CAM vast AYUSH infrastructure comprising of
multinationals and pharma giants. The nutraceutical segment skilled manpower.
Yoga, Naturopathy, Unani, Siddha and (complementary and alternative 736,538 registered practitioners.
The sector also has issues regarding comprises of Health & Wellness
Homoeopathy (AYUSH) and herbal medicines) in its public health system Curb malpractices: To create strong
quality, consistency and compliance. Food and Beverages, Dietary Skill India: A national level initiative with
products. A vast reservoir of natural flora in 2009. The recognition of Ayurveda in industry lobby to liaison with government
Therefore, there is a strong push by the supplements. the partnership of the government,
and fauna and also ancient texts and Swiss public health system exemplifies its for better monitoring and compliance
industry association towards encouraging Health and wellness food and employers and other important
knowledge that have made it an authority efficacy in the public health system and within the industry. Further, a team
small players to create sufficient beverage1s includes three sub- stakeholders to create and lead a skill
in the field of AYUSH. therefore it could be replicated in other should be setup to conduct surprise
infrastructure to meet labelling, global segments; Fortified foods and development initiative for the beauty and
countries of the world. checks on a regular basis to check the
manufacturing practices and quality A global trend of seeking experiences beverages (FFB), Naturally healthy wellness industry has been envisaged.
usage of sub-standard, ineffective and
control norms so that they are able to that are rooted in authenticity and C AM has witnessed an increase in use in (NH) products, Better for you Beauty and Wellness Skill Development
harmful products by service providers
compete with bigger players. nature therefore leading towards a global recent times not only in North America, (BFY) products Council (BWSSC) established to ensure
with a view to regulate costs.
recognition of tradition India wellness Europe and Australia but also in Asian The spa and wellness centers the generation of skilled manpower
Fitness Products & Centers practices. countries including India.317 segment is in the nascent stage but in the sector, create career paths in Introduce quality norms: Government
The health and fitness industry in India growing rapidly. roles existing within the unorganized should define quality norms to bring
A rising cost of unwell workers is
is poised at an inflection point and is Competitive profile The industry is highly fragmented and organized segments of the Beauty standardization and uniformity within the
encouraging the employers to spend
chiefly driven towards wellness, fitness, Characteristics of the stakeholders and with no clear industry leader and and Wellness industry and ensure industry.
more on employee wellness as a
presentability, and confidence. Fitness key growth drivers of the wellness market/ there is an opportunity for new active participation of the different
means to lower healthcare costs, Awareness campaign: Consumer
industry in India is worth $1.1 billion and network are as follows: players to create value in this stakeholders, i.e., Industry, Academia and
improve morale and recruitment, raise awareness programs in the form of
is expected to cross $1.1 billion by 2017.316 A. Consumers: Consumers mainly segment learners to ensure a holistic development
productivity, and stay competitive in road shows and media channels to
The market penetration rate in India is comprise young population with rising C. Adjacent industries: Adjacent of skilled manpower.
the market. As companies increase advertise benefits of accredited and non-
as low as 0.5% and is mainly fragmented income levels. Increasing need to look industries such as healthcare,
their workplace wellness expenditures, Digital India: National Health Portal to accredited center.
with majority of the market dominated by good and feel good has led these young hospitality, education, media, retail and
it generates many related business provide general information on health
unorganized and independent gyms. The consumers to seek wellness solutions gaming are capitalizing on the growth
opportunities, including a proliferating and diseases and multiple mobile apps
organized fitness market is concentrated to meet lifestyle challenges. of the wellness sector to generate
number of third-party providers that such as the Swasthya Bharat App have
in top eight cities of IndiaDelhi NCR, Indian youth (in the age group of additional revenue streams, leverage
supply services, products, and platforms been initiated.319
Mumbai, Bengaluru, Chennai, Kolkata, 15 to 34 years) is the core target existing competencies and offer a
(e.g., screening assessments, diagnostic
Pune, Hyderabad and Ahmedabad with group, comprising over 34% of the wider array of services/products to
tests, incentive programs, wearable
more than 60% of top companies located total population. This is expected customers.
devices, counselling services, etc.)
here. While the market will continue to to cross over 400mn by 2016 and
138 139
20. Facility Management

Industry profile Figure 66: Facility Management Services in end user industries
IT/ITES/BPO/BFSI Electrical services like HVAC and maintaining power stations for office buildings
Water management for regulating water usage in canteens and washrooms
Housekeeping
Security
Pantry and cleaning
Manufacturing Operation and maintenance of HVAC systems
Energy management for utilities
Soft services like security, pantry, transportation
Retail Electrical and mechanical services
Housekeeping
Security
Healthcare Electrical maintenance of OPD, ICU,

Facilities management services revolve facilities management will grow at a CAGR With growth expected in the facility
around people. It involves maintaining of 17% and reach $19 billion by 2020.320 The management market, several large and other critical areas
and managing the building facility and Indian facility management services market multinational corporations are entering
Housekeeping
carrying out several non-core business is largely unorganized in the current state and looking to enter the market. Some
activities for the organization. These of things. of the leading US players are already Pantry and cleaning
include hard services like management and operating in India.
maintenance of an entire building facility, Facility management services are primarily
Infrastructure HVAC
soft services or business support services, concentrated in and around metros with Future prospects of the industry
and energy management services. Services low penetration in Tier II and Tier III cities. Housekeeping
Businesses are constantly making
in this sector can range from a single This is due to the presence of a majority
efforts to ensure that their facilities and Security
service, bundled service, or an entire range of office facilities, building spaces, and
workplaces are properly maintained,
of business support functions for the client developed infrastructure in these areas.
focusing attention on the core business Government Housekeeping
organizations. Among all Indian cities, the two cities
activities. Facility management vendors
of Mumbai and Pune contribute the Catering
provide flexibility of outsourcing
The facility management services maximum share of over 20% to the facility
their non-core activities like heating, Security
spans across sectors - infrastructure, management services market followed by
ventilation and air conditioning (HVAC),
manufacturing, IT, and other services Delhi-NCR and Bangalore.321
maintenance and cleaning, plumbing, and
(along with future investments). Among IT/ITES/BPO/BFSI Electrical and mechanical services
several other support functions.
end-users, IT/ ITES/ BFSI contributes more Within the end-user segments, information
Security
than 21% of revenue generated by the technology (IT)/information technology The facility management services market
facility management services market due enabled services (ITES)/Banking, Financial in India is slowly gaining momentum Housekeeping
to the recent boom and investment in the Services, and Insurance (BFSI) occupy the owing to the rapid infrastructural
Catering and cleaning
segment. Other sectors like healthcare, maximum share of facility management growth expected in the forecast period.
retail, manufacturing, and infrastructure services, followed by manufacturing and The facility management sector will Horticulture
are also gaining momentum because infrastructure sectors. The demand for strengthen its hold in the services sector
Transportation
growth is stemming from increased facility management services is high with and penetrate into other developing
investments and initiatives undertaken by growing emphasis on urban development sectors like manufacturing, healthcare,
the Government of India. and modernization of office spaces. The and retail.
Indian real estate sector is the major
The growth in BPO, IT, and ITES sectors
Global facility management market was driver for the facility management services
has stimulated the demand for facility
estimated at $1.12 trillion in 2016. The market. With advances in infrastructure
management services in India. The
US leads the sector with some of its facilities, any positive activity in the real
country is the world's largest IT industry,
large multinationals present worldwide. estate sector will benefit the market in
accounting for approximately 65% of the
It is expected that the Indian market for future.
140 141
21. Exhibition and Event Service

global IT market. Various hard services
and soft services are required in most
Among all service lines, facilities
management services areand will
The Industry is moving towards
consolidation and Integrated Facility
Industry profile
of the offices, resulting in a bright future continue to be the most highly Management Services is the emerging
for the facility management services integrated industry purchase. trend. Even customers are more
market. It is projected that by 2020, an comfortable with a single vendor
Increasing competition coming from
additional 325 million sq. ft. of land in providing multiple services rather than
new players in emerging markets will
Tier I cities and 300 million sq. ft. of land dealing with multiple vendors. The
force companies to search for greater
in Tier II and III cities for office space integrated services approach gives major
differentiation, and to be innovative in
would be created in the IT/ITES industry. cost benefits to the facility management
how they adjust their business models
The rapidly expanding office spaces in company as well as to the customers,
and deliver extra value to clients.
IT sector signals positive signs for the making it a win-win situation for both.
facility management industry. Facility Global warming will be one of the main The growing regulatory and compliance
management services in the industry sustainability challenges for the coming requirements have furthered the case of
have gradually transformed their role century. To become more energy and integrated services and customers are
from an outsourcing service arm to carbon-efficient, societies around the happy to rely on the service providers to
a more solution-based channel for world may be forced to restructure take care of these unwanted regulatory
business enhancement. With advances their economies and infrastructure. complexities.
in technology, it is expected that facility Technological development is squeezing
management services will evolve from low-quality labour out of the market The government is also looking towards
workplace management to cloud-based and creating new demands for skill sets. professional facility management service
solutions and services underlined by People and organizations expect tailored providers rather than relying on in-house
Computer Aided Facility Management. products, services and solutions. manpower. The government is becoming Exhibitions are a medium for effective Global exhibition market was estimated MICE destination. India has major MICE
more and more stringent with its quality promotion of businesses, products, and at $55 billion and attracts around 260 centers located in New Delhi, Mumbai,
Big and established vendors can cater Companies expect their facility
and delivery parameters. This is a welcome services. They help in lead generation million visitors annually. It is growing at a Agra, Bangalore, Chennai, Cochin, Goa,
to a wide variety of facilities services management and services industry
change for the professional facility and are more effective than advertising significant rate worldwide. The market is Hyderabad, Jaipur and Kolkata. Also major
compared with small and local vendors. providers to supply individualized
management service providers as it opens campaigns such as online banner poised to witness a huge demand in the 5 star and 7 star hotel chains at these
Technology will also play a decisive role services that maximize their value
more avenues for them in the government adverts and newspapers. Companies APAC region and the MEA region. The US, locations have excellent facilities for such
in ensuring delivery capability of facility proposition. Additionally, companies will
sector. Also, with infrastructure that participate in the events, maximize Germany, France, the UK and Spain are activities.
management services, encouraging experience increasing employee turnover.
development being one of the major focus the return from the events by combining top 5 countries in the world in organizing
the need for constant technological Individualization will be prominent as
of the government, the facility management it with various marketing techniques meetings. Growth drivers for the industry
upgrades. Facility management has employees and customers increase their
industry is set to grow with leaps and such as direct mail, public relations, and The Global Exhibition Organizing market
become a tool that allows businesses demands for individual attention.
bounds as every new infrastructural facility e-newsletters. An event is a forum for The Global Exhibition Organizing market is largely driven by an increase in the need
to integrate their noncore activities,
Corporations are implementing needs a facility manager. interaction of prospective buyers and generates revenue from the organizations for specialized, effective, and high-quality
focusing attention on core activities.
alternative workplace practices and sellers. of the following exhibitions: One-time exhibition events, which would attract
new ways of working to promote events and permanent facilities. These international buyers to take part in local
Government Initiatives
corporate identity and foster more Business to consumer (B2C) and exhibitions are not recurring in nature and exhibitions. Social media and search engine
The various policy initiatives such as
efficient collaboration, knowledge Business-to-business (B2B) exhibitions are conducted for a few months or may marketing are also driving the growth in the
RERA (The Real Estate (Regulation
sharing, flexibility, speed, innovation, and held worldwide help provide a platform be prolonged for years. Exhibitions which sector. Ministry of Tourism is emphasizing
and Development) Act, 2016), GST,
productivity. to promote products and services are recurring in nature, are conducted in on the potential of MICE Tourism and the
Infrastructure Status for Affordable
Housing, coupled with a strong Introduction of foreign players in this to a wide group of target customers. permanent facilities and have a dedicated new tourism policy has identified it as an
infrastructure development plan, is making market is expected to increase in the Vendors organize exhibitions to provide exhibition centre. important product to increase tourism
India an attractive destination for foreign coming times. The next wave of urban interaction between the exhibitors revenue.
companies to set up operations in the development will occur in areas already and the prospective buyers. Exhibition Indian event industry is projected around
country. prone to natural disasters. Facility organizations stage and manage INR 960 billion ($14.5 billion) growing at the The exhibitions provide a platform for
management and services industry exhibitions. They select the venue and rate of ~5.2% year-on-year. increased brand awareness, media
Conclusions and recommendations managers should prepare contingency make provision for facilities and logistics. exposure, networking, and competitive
and continuity plans for a number of MICE (Meetings, Incentives, Conventions monitoring. They enhance direct
Within the next few years, the facilities The interactive forum enables sellers and Exhibitions) tourism is growing and interaction between buyers and sellers,
challenges.
management and real estate industries to pitch their products according to the contributing significantly to the global which is essential for doing effective
will experience a considerable increase in Government regulations including Private preferences of the customers. tourism industry. The entire world business. The exhibitions could generate
the demand for outsourcing, integration Security Agencies (Regulation) Act 2005 has witnessed the immense potential ancillary services, new clients, and
and globalization of services. and Foreign Direct Investment Policy of MICE Tourism. The government is partnerships.
and Goods and Services Tax is building working towards promoting India as a
the foundation for a key segment of this
sector.
142 143
Figure 67: Drivers in the Global Exhibition Organising market
1
Increased
3
demand for
business- Effective
focused events medium for
the promotion
of business
4
Growth in
2
Increased emerging
government markets
support
'The Exhibition industry is growing at together. The innovations reduce the

a robust pace in developing countries probability of disinterested parties
such as China, India, Brazil, Russia, and interacting with each other, thereby
South America. However, the Exhibition increasing the throughput for the
Organizing market in China is larger than exhibiters. Both social media and search
other developing countries. This is mainly engine marketing have a strong effect
because the country has stable economic on the Exhibition industry and are also
growth, and has a higher demand for the expected to drive the market during the
Exhibition industry. forecast period.
Conclusion and recommendations Overall, the market will continue growing at

Despite these challenges, the Global a high rate during the forecast period due
Exhibition Organizing market is growing to an increasing number of organizations
significantly because of some emerging establishing themselves in developing
trends. Increased innovation in exhibition countries. Supportive government policies
formats is one of the trends. These and regulations, outstanding infrastructure
innovations allow organizers to offer a for MICE and connectivity with other major
customized experience to buyers and destinations worldwide would strengthen
sellers by strategically bringing them growth.
144 145
1. Cyber Security
Industry profile
Emerging
Opportunities
Cyber security is related to securing and Market trends Rising risks
preventing unauthorized access of any There are a number of trends that are Social Media Risks: Social media can
enterprise asset in which digital data can creating a need for a focused effort to solve be a valuable sales and marketing
reside or transcend. The key principles on cybersecurity issues: tool. Inherent in these applications are
which cyber security operates on are security risks that can put the individual
Increased sophistication & number of
or a company in a compromising
Secure: securing and reducing the risk to attacks: Despite company efforts, these
position or at serious operational,
the asset attacks continue. Clients agree they need
regulatory as well as reputational risks.
to change the way they defend against
Vigilant: monitoring the enterprise and Cloud Infrastructure Risks: Lack
and recover from cyber-attacks.
the assets continuously to ensure that of best practices on the method
there are no threats and Rising costs: It used to be that a cyber and content of a cloud services risk
breach would cost only the company assessment. Non-transparency of
Resilient: ensuring the resilience of the
remediation but now the costs are service providers presents challenges
asset, to self-heal or be able to recover to
increasing with the average cost $6.75 to security professionals charged with
original state in case of a compromise.
million. assessing the risk of cloud services.
Poorly defined business requirements
The Assets can fall into the area of Increased mobility: Companies IT
on the part of cloud services buyers
information technology, communication infrastructure continues to extend
create additional areas of potential risk.
Infrastructure, Internet of Things (IoT), beyond the walls of their data center.
Malware Follows Users to Mobile:
physical access and other digital assets With Bring Your Own Device, business
With increase in usage of services
through which Digital Information can partnerships, mobile and cloud
through mobiles and tablets, malware
transcend proliferation, data is increasingly exposed
pose a threat even to the mobile
to higher risks.
devices. With these networks growing
Defense and military, government, financial
Underdeveloped cybersecurity more and more common, with increase
institutions and corporation etc. collect
workforce: With the increase in in complexity, keeping a check on the
and store confidential information on
sophistication of attacks companies find spread of malware has become an
computers and transfer that data across
it easier to outsource cyber services to increasingly difficult task.
networks. In order to protect this data and
firms who can leverage resources for
information from being compromised,
many clients, thereby decreasing costs
cyber security becomes necessary.
while retaining expertise.
Increasing threats such computer intrusion
(hacking), virus deployment and denial of Changing regulations and guidelines:
services are increasing the demand for Governments around the world are
cyber security solutions and services. implementing more stringent regulations.
146 147
Market segments further gets segmented based on Opportunities The market in India has a high potential of Competitive landscape Conclusion and recommendations
The Cyber Security market can be broadly customizations and needs of specific The growing concern over geo political growth driven by digital economy initiatives As one analyzes the cyber security Cyber security is no different, we will
segmented into three major types into Industry sectors and regions. issues, regulatory matters, organized of the government, along with digitisation competitive landscape, one can draw an face competition from all fronts. We
cyber-crime and rising adoption of digital and automation. The digital transformation analogy and learning from the technology as a country need to capitalize on the
Security Original Equipment
Market size technologies like social, mobile cloud, and drive by government creates huge demand and business process outsourcing advantages that we have and rapidly
Manufacturer (OEM): The cyber security
While it is intuitive to understand the IoT, etc. that further increase the risk of for cyber security services in the country industry, where Indian vendors face accelerate our capabilities and capacity
ecosystem comprises cyber security
expanding market size of Cyber Security, it compromise, provide new frontiers and and provides new opportunity for the competition from both large global service in the cyber security space by offering a
OEMs such as Intel Security Symantec
further gets validated by several research / growth opportunities for Cyber Security. vendors. Further mature markets such as providers as well as niche firms. Further complete portfolio of services to assist
Corporation, Hewlett Packard Enterprise,
reports: Indias large pool of cost effective English Americas and EMEA where there is a severe in this space Latin America and Eastern enterprises establish their cyber security
IBM Corporation, Cisco Systems, Inc.,
speaking talent (with proven capabilities shortage of cyber security professionals European countries traditionally compete programs, and assist them in the ongoing
Rapid7, Inc., EMC RSA, FireEye, Inc., Trend The global cyber security market size is
in ITES, BPO, KPO types of services), rising and additionally the emerging markets with India for near-shore and offshore management and monitoring of these
Micro, Inc., Sophos Ltd., service providers; estimated to grow from $122.45 billion
smartphone and internet penetration, like APAC, Middle East & Africa which delivery infrastructure and countries programs, and continue to be trusted
system integrators; and enterprises. in 2016 to $202.36 billion by 2021, at a
along with public sector investments in face similar challenges, provide new like Philippines, Vietnam, Malaysia, and advisor who partakes in their business
CAGR of 10.6%.
Services: This sub-segment includes digital economy initiatives in India would opportunities for growth for Indian cyber Indonesia are also destinations for transformation and assist in managing
consulting risk and compliance, design According to Data Security Council of enable the industry address domestic and security vendors. delivering cost effective IT/BPO services. of cyber risk as the threat environment
and integration, training, analytics, India (DSCI), the Indian Cyber Security global opportunities in Cyber Security. constantly evolves. The complete portfolio
forensic, etc. Other service providers market is expected to grow nine fold from is described below:
include security service providers, $4 billion to $35 billion by 2025. The rise of Uber, AirBnb, etc. which have
IT service providers, resellers and disrupted/transformed their respective
Government spending has increased at
technology providers. sectors, has been an awakening call for
an average annual rate of 14.5% from
several enterprises across the world
Applications & Solutions: This sub- 2006 2017, outpacing investments in
and this has caused rapid acceleration
segment has solutions categorized any other program, according to Scott
of disruptions / adoption of digital
in the following broad categories Homa, Senior Vice President for Mid-
technologies like social, mobile, cloud,
namely risk and compliance, identity Atlantic Research at Jones Lang Lasalle
and IoT, etc. as businesses strive to be Cyber Threat Cyber Analytics & Cyber Strategy and Vulnerability Infrastructure
and access, information leakage and (JLL).
competitive and relevant. Intelligence Incident Response Governance Management Management
rights management, Infrastructure
A 2016 report from BI Intelligence,
management (firewall, encryption,
estimates that $655 billion will be spent These businesses in their desire to To prepare and combat Anticipate, Plan & Define and implement Providing the enhanced Providing IT
PKI, anti-malware and anti-virus, web against security attacks Prepare. Provide a Cyber strategy and a threat protection to infrastructure
globally on cyber security initiatives Uberize within and become more Digital
filtering, DAC, IDS, etc.), Threat & Incident prompt response and governance framework critical environments management services
to protect computer systems, mobile in an accelerated window of time, further
management, vulnerability management, resolution to qualified
devices, and IOT from 2015-2020. increase the risk of compromise, thus
resilience and business continuity and incidents
providing new frontiers and growth
analytics/correlation. This sub-segment
opportunities for cyber security. Description
Provide updates and Providing prompt Support an executive- Providing enhanced Enable companies to
feeds on an on-going response and led cyber Governance, threat protection to optimize, secure,
Cloud Services loT Cyber Security basis regarding malign resolution assistance to Risk and Compliance critical and fragile manage and support
Global Cloud Market Global loT Market Size: Enterprise security happenings across the qualified incidents program customer environments availability and
globe to prepare and performance of
$208.4 billion $1.7 trillion by 2020 spending(hardware, softwere,
combat against security infrastructure
services) in India is around 1.12
Indian Cloud Market Indian loT Market Size: attacks
billion in 2016, upto 10.6 percent
$ 16 billion by 2020 $15 billion by 2020
from $1.01 billion in 2015 and is Design
Growth Drivers for IT Growth Drivers for IT Services expected to reach $1.24 Billion In
Services 2017 Implement
High loT Security Spending (348
Digitisation million in 2016) As per Gartner, India Security Market Operate
is expected to grow 10.6 Percent in
Payment Sector Security Services
2016
Government Services
Aadhar, e-KYC
148 149
2. Northeast India
In this journey of race to the top, India
needs to position itself as the security
Cyber Security Incubation, R&D and
#MakeInIndia: Create cyber security
Industry profile
provider to the world, by building an parks or expand the mandate of STPI,
ecosystem of cyber security services, SEZ etc. and create special incentives
solution and technology providers. This for creating products intellectual
segment will need further incentives property, innovation of services in cyber
to incubate and grow at a rapid space security areas. This will help Indian
to capture market share from the companies innovate and provide cost
competition. Thus India should take bold effective security solutions and services
steps in the following: (#MakeInIndia) for the global markets,
which is currently dominated by the US
Cyber Skilling India: Revisit the
and European vendors.
curriculum at school and colleges and
revamp it to adapt to the changing
needs and establish a strong foundation Data Protection, Ownership and
in cyber security at a very early Jurisdictional Rights: As India embarks
stage. Further incentivize private and on being the security capital of the world,
government training institutes to providing managed security services
establish and impart re-skilling of cyber from state of art cyber security centres,
security training to the vast pool of we should consider provide explicit Data
professionals in existing work force. This Protection, Ownership & Jurisdictional
will create a vast pool of skilled workforce rights to businesses who may want to
that can be used to support domestic have their data reside in India, as a logical Northeast India comprises eight states and Sikkim. It is one of the most resource Some of the driving factors are discussed
and global needs. extension of their own country. This will Arunachal Pradesh, Assam, Manipur, rich regions in the country and is endowed below:
further turbo-charge the adoption of Meghalaya, Mizoram, Nagaland, Tripura, with a diverse range of natural resources.
National talent search: Create the ability
remote cyber security centres.
to constantly search and identify the best Driving factors for NE
talent across the country and provide Authentication as a Service:
them state of art facilities to further Authentication will continue to be a The region has a long international border of almost 4500 km and shares border
enhance and develop their cyber security challenge across the world. Leveraging Strategic with Bangladesh, Bhutan China, Myanmar and Nepal
skills and contribute to the nation and the the state of art authentication capabilities Location
It has potential to be developed for boosting trade with ASEAN countries
private industry. and significant scale established by the
Government of India for the Aadhaar
Ease of doing business in India: Simplify
environment, we should explore the
procurement processes within the Most state in North East have an education index above 60 and the level of
opportunity of establishing a trusted
government, to provide a major boost Affordable education is alleged to be higher than that in other parts of the country
environment to provide authentication as
to the domestic security industry and Labour
a service across the world. Presence of a youthful population and labour at affordable rates
help security service providers address
emerging digital economy opportunities
in India. Presence of a diverse range of natural resources and crops tea, bamboo, etc.
Natural
Almost 52% of the region has forest cover and has abundant water resources
Resources
NER supplies 10% of the gas and 12% of the oil requirements of India
Each of the eight states offers its distinct culture and heritage
Cultural There are 3 UNESCO identified world heritage sites located in this region
NE Tourism Circuit being developed under the Swadesh Darshan scheme
Plans of investing INR 920 billion for development of roads and railways
Under the Special Accelerated Road Development Programme in North- East

Government (SARDP-NE), the Trans-Arunachal highway is being developed
Focus
Each Central Ministry is required to spend 10% of its budget in the North East
Government has a INR 1.3 trillion plan to double O&G production in NE
150 151
Combining the strengths of the Northeast Tourism in Northeast folk dance and music in the Northeastern Five year tax holiday for two, three, and on the northeastern states of the country, NERAMAC (North Eastern Regional
region and the focus of the Central Northeast India comprises eight states region together offers an opportunity for four star category hotels located around this virtually unexplored region can be Agricultural Marketing Corporation Limited)
Government, certain industries (Tourism, namely Arunachal Pradesh, Assam, development of tourism in the region. UNESCO world heritage sites in India. developed as a tourism hub based on is considering setting up the following
Logistics, Food Processing, IT & ITES) with Manipur, Meghalaya, Mizoram, Nagaland, Each state in the region has its own Three such UNESCO sites exists in this different themes such as adventure, three projectsa Central Packaging Centre
potential for attracting investment in the Tripura, and Sikkim. The location of the distinct feature and together the region is regiontwo in Assam and one in Sikkim. wildlife, eco-tourism, wellness tourism, at Guwahati, multi-food processing plant
Northeast region have been detailed in this region is strategically important as it shares endowed with diverse tourist attractions. cultural tourism, tea- tourism and at Silchar, Assam, and modernization of
A six week training program has been
document. its border with Bangladesh, Bhutan, China, Of the 35 UNESCO identified World pilgrimage. The regions proximity to the pineapple concentration plant at Tripura.324
launched for the age group 18-28 years
and Myanmar. The natural beauty of the Heritage Sites in India, three are in this South-East Asian Tourism Hub is an added
to achieve better tourist satisfaction
place, rivers and mountains, Buddhist regionKaziranga Wildlife Sanctuary and advantage. Future prospects for the industry
in terms of availability of skilled tourist
monasteries, serene natural environment, Manas Wildlife Sanctuary in Assam; and
facilitators in Northeast. Northeast, and in particular the state of
exotic flora and fauna, unique tribal culture, Khangchendzonga National Park in Sikkim. Food Processing in Northeast
Assam, is the largest tea producing state
The North Eastern Region holds lot of
Future prospects for the industry in India. Development of blending and
potential for food processing as the
Figure 68: Total number of tourist arrivals in North East India in 2015 (in million)322 mixing services holds good potential in
Niche tourism sectors like medical weather and adequate availability of water
the region provided new infrastructure
tourism, eco-tourism, and wellness are conducive to food cultivation and
8.06 3.53 like that of the existing ICD (Inland
5.52 tourism offer good opportunities in suitable for growing large variety of fruits
Container Depot) Amingaon, Tea parks,
the tourism industry. Northeast has a and vegetables. The Central Government
etc. are developed in the region.
plethora of attractions to be developed is trying to develop food processing sector
In Million
for niche tourism. in Northeast through its schemes of The demand for organic products is
Mega Food Park, Cold Chain, Abattoir, and growing and the North East region
Development of the tourism sector
development of Food Testing Laboratories. has the potential to become the
0.15 0.76 has potential to benefit other ancillary
organic farming hub of India. Sikkim
0.067 0.067 0.4 services providers such as facility
0.74 Government initiatives has already turned completely organic
management, banking and financial
The Government of India approved a and farmers in other region can be
services providers, and entertainment
2015 Arunachal Assam Manipur Meghalya Mizoram Nagaland Tripura Sikkim package of fiscal incentives and other educated and supported to completely
service providers.
Pradesh concessions for the North- Eastern region reject chemicals. This can create huge
Northeast India has been largely including Sikkim namely, The North East impetus to the setting up of various food
Source: Annual Reports of Ministry of Tourism, Government of India
untapped till date and the focus of the Industrial and Investment Promotion processing services and organic value
Central Government on this region Policy (NEIIP), 2007, effective from 1 April, chains in the region.
The number of tourist arrivals in Northeast and Promotion Board to monitor and Provision of complimentary space to the under the Swadesh Darshan and Prasad 2007, which envisages large number of
A gricultural extension programs are
India has increased from 6.43 million in facilitate hotel project clearances. Some of Northeastern states in India Pavilions schemes will provide the requisite incentives/subsidies namely, Excise Duty
conducted in Assam for technology
the year 2011 to 8.06 million in 2015 at the key initiatives are mentioned below: set up at International Travel Fairs and impetus to tourism related infrastructure exemption, Income Tax exemption, Capital
transfer to the tea growing farmers.
a CAGR of almost 5.8%. In the last few Exhibitions. projects in this region. In 2016 alone, four Investment Subsidy, Interest Subsidy, etc.323
Introduction of the Swadesh Darshan Similar extension services can be
years there has been a steady rise in the projects have already been sanctioned.
scheme to promote theme based tourist 100% central financial assistance to the 3 Mega Food Parks have been sanctioned provided to the food processing setups
number of domestic and foreign tourist
circuits in the country. The Northeast Northeastern states for organizing fairs Skill development initiatives targeted for for this region, one each in Assam (which in order to improve competence of
arrivals in the region, however Northeast
India Circuit (Paradise Unexplored) has and festivals. tourism will create requisite talent pool has been made operational), Mizoram the farmers and adoption of new
India still accounts for less than 1% of
been identified as one of the twelve for the tourism industry in Northeast and in Tripura. technologies.325
the total tourist arrivals in India. This Ministry of Tourism, as part of its ongoing
thematic circuits under this scheme. India and that too at affordable rates.
may be attributed to the lack of proper activities undertake several outdoor 5 Cold Chain projects have also been
Infrastructure projects amounting to Conclusion and recommendations
infrastructure, inadequate marketing, and media campaigns in the international The development of the Northeast India sanctioned in Assam, Manipur, Mizoram
around INR 3.5 billion has already been There is a lot of potential around
scarcity of skilled manpower and absence and domestic market to promote various Circuit under the Swadesh Darshan is which have a capacity of 11500 MT of cold
sanctioned under this scheme for the developing food processing industry
of a broad tourism policy for the region as tourist destinations. It undertakes special expected to generate greater demand storage, 0.75 MT/per Hr. of IQF capacity
Northeastern region. in the Northeast, given its proximity to
a whole. campaigns on Northeast region to for tourism and accommodation facilities. and 68 Reefer Trucks.
South East Asian markets, being home to
Introduction of the PRASAD scheme promote tourism in this region. The expected increase in demand
8 Abattoirs projects have also been diverse variety of fruits and other crops
Government initiatives (Pilgrimage Rejuvenation and Spiritual combined with the five year tax holiday
International Tourism Mart (ITM) is sanctioned which are aimed at and the huge potential of organic farming
The Ministry of Tourism has taken a Augmentation Drive) to promote places offered to two, three and four star
organized annually with the objective establishing modern Abattoirs and in the region. The continuous focus of the
plethora of initiatives to promote tourism with pilgrimages. Kamakhya in Assam is category hotels located around UNESCO
of showcasing the largely untapped ensuring hygienic and scientific meat Government of India in setting up modern
in the country and specifically in Northeast one such center identified. World Heritage sites by the Government
potential of Northeast India in the processing. infrastructure like food parks, export
India. From formulation of the National is expected to attract investment in this
10% of the plan allocation of the Ministry domestic and international markets. zones and cold chain and efficient policy
Tourism Policy 2015 to introduction of region. 6 Food Testing Labs for creating
of Tourism is earmarked for North East Already four ITMs have been conducted making can make the North East one of the
new initiatives like Swadesh Darshan and infrastructure for food safety and quality
India. so far. potential food processing zones in India.
PRASAD many steps are been taken to Conclusion and recommendations testing.
boost the tourism industry. The Ministry Investment in tourism and hospitality
has also set up a Hospitality Development has been rising consistently. With the
renewed focus of the Central Government
152 153
Logistics in North East Growing E-retail segment: Online sales The government is also looking at Cold Chains: Considering the current
Infrastructure snapshot of the north east region in this region has seen considerable developing a viable road network in levels of food wastage and food security
traction, especially in categories like this region by increasing the lanes of issues, there is a huge demand for cold
Table 7: Key activities / services in logistics music, apparels and books331. The the existing ones and laying out new chains in India. The segment is expected
presence of a relatively young population lanes through PPP model to improve to grow at 28% CAGR to reach $13
Transportation Distribution Import/Export has further accelerated this growth. With connectivity. billion by 2017.335 The market is highly
Plan Network Design Facility Design Coordination of global freight the penetration of online retail across all fragmented with organized players
North Eastern Development Finance
movement tier-II cities in India, there has not only contributing only 8-10%. The segment
Carrier contracting Project Management Corporation set up by the government
been a sustained growth of existing has been given infrastructure status and
to predominantly cater to the financial
Shipment optimization courier players but also emergence of FDI is allowed through automatic route
needs of the MSME sector in this region
dedicated logistics providers. There is to attract investments in this emerging
Execute Carrier selection Warehouse management Customs clearance can resolve the working capital issue for
a lot of potential for growth for these sector.
businesses venturing in this industry.
Shipment tracking Value added services Freight forwarding players as they plan to invest in logistics
services and manpower training. Regional Connectivity plan in airlines Conclusion and recommendations
Freight payment sector may not only revive the dormant Development of transportation and
Source: IEEE326 Government initiatives airports (along with development of logistics-related infrastructure such as
ancillary services industry) but will reduce dedicated freight corridors, logistics
Railway Connectivity in North East:
commuting time in a cost effective parks, free trade warehousing zones, and
Road: The North Eastern region has linkages to international trade). There operates ferry services. The current budget The Northeast Frontier Railway zone
manner - existing Guwahati Airport, container freight stations are expected
close to 8480 Km of National Highways327 are 11 operational airports (includes two also proposed construction and operation has received a massive push from the
Dibrugarh Airport, Silchar Airport, to improve efficiency and transform the
running across the eight states (including international airports at Guwahati and of water taxis as one of the key projects in government and is expected to complete
Agartala Airport, Shillong Airport, Imphal logistics sector in India. The north east
Sikkim). The lions share of freight Imphal) in the Northeast and 10 non- the region. connectivity across the states within
Airport, and Dimapur Airport to be; and region offers significant opportunities in
movement across the region happens operational airports with one green field 2020332. Some of the key tracks in the
upcoming new airports at Itanagar, the logistics sector both from the point
through roadways and movement across airport coming up in Itanagar.328 Growth drivers for the industry region include:
Ceithu (Kohima), Pakyong (Gangtok) to be of view of attracting private and foreign
the Chickens Neck region (the stretch of Jiribam-Imphal, 110.63 km in Manipur
Emergence of new hubs in tier-II cities: benefitted.334 players as also for expansion of Indian
land connecting this region to the rest of Waterways: The Brahmaputra River which Badarpur (Assam)-Agartala (Tripura),
Locations like Guwahati (Assam), Agartala start-ups and logistics service providers.
India through Siliguri in North Bengal) has flows through the region provides Assam 227 km in Tripura
(Tripura), and Imphal (Manipur) in north Future prospects for the industry With increasing focus of the current
resulted in extreme congestion. with the largest network of navigable Katakhal (Assam) to Sairang (Mizoram),
east are some of the key emerging government on improving infrastructure
waterways in the country. Along with river 135.38 km Organized retail: With emergence of
hubs330 catering to the increasing across India and efficient policy making the
Rail: The railways network across the north Barak, which was recently was declared Tetelia (near Guwahati)-Shillong organized players , key trends in the
demand across the north eastern states. logistics sector is going to be one of the key
eastern states is ~2600 km with broad part of National Waterways (NW16), nine (Meghalaya), 129.9 km industry as seen in the last few years
sectors to watch out for.
gauge limited majorly to Assam. other rivers the Aai, the Subansiri, the International Trade: The region shares Dhansiri-Zubza, 91.75 km in Nagaland include:
Gangadhar, the Beki, the Dehing, the border with Bangladesh, Myanmar, and Harmuti (Assam)-Naharlagun Growing acceptance of 3PL (third party
IT/ITES in Northeast
Air: Civil aviation holds the key of not only Dikhow, the Puthimari, the Kapili and the Nepal (BBIN Corridor) and has huge (Arunachal Pradesh), 21.75 km logistics) players
A large chunk of highly educated, computer
connecting this region with the rest of India Dhansiri are being developed as a part potential for improving trade with these Sivok (Bengal)-Rangpo (Sikkim), Government focus on providing
literate, English speaking youths from
but also boosting trade and commerce of the national waterways329 where the regions and the entire South Asia. 44.96 km support for cold chain and logistics
the Northeast are now working in ITES-
(both within the region as well as providing state inland water transport department industry
Development of multi-modal hubs: The BPOs across the country. The fact that
Emergence of 4PL players which are
government is looking at development the Northeastern states have a legacy of
Table 8: Snapshot of infrastructure in the North Eastern States of India involved in management of 3PL players
of multi-modal hubs including road, missionary schools, where good English is
and looks at the entire supply chain of
State Roadways Length Rail Network Length Operational Airports Non-operational railway, ports and aviation and inland taught is coming in handy for the industry
the organization
(Km.) (Km.) Airports waterways which would act as great and offers a huge potential for BPO firms.
logistics hubs. Proposals to convert High quality warehouses: With the
Assam 2836 2434.99 6 1 Inland Waterways Terminal in Jogighopa development of new warehouses Growth drivers for the industry
Arunachal Pradesh 1992 1.26 5 (Assam) into a multi-modal transport in emerging hub locations, most
Availability of skilled resources: The
hub for cargo movement and trade organizations are looking at bringing in
Manipur 959 1.35 1 northeastern region has, as of 2016, 1 IIM,
between Bangladesh and Bhutan is global best practices and high standards
1 IIT and 8 NITs to fulfill the technological
Mizoram 927 1.50 1 1 currently under consideration by the in these warehouses. Improved
resource required for the IT/ITES industry.
government.333 Other locations which warehouse management and tracking
Meghalaya 810 1 Along with a legacy of missionary education
could be explored on similar lines include systems, automated conveyor systems
and exposure to English language from
Nagaland 494 12.85 1 Dhubri and Badarpur in Assam. fire sprinklers, etc. are expected to
a very early age, the population of the
improve the standards of the warehouses
Tripura 400 151.4 1 3 region has a distinct advantage for the IT/
as India prepares for post-GST
ITES industry. Companies such as NIIT
Sikkim 62 operations.
Planetworkz, has set up close to 30 Time
Total 8480 2602.35 11 10 Machines, an online recruitment kiosk, at
different places in Northeastern states.
Source: Ministry of Development of NER website and AAI Presentation on North East Connectivity Summit 2015
154 155
3. Research & Development

Thrust on IT Connectivity: There is a
focused plan and sustained investment
a. Capital Support: Up to 50% of
one time expenditure incurred
Provision of IT/ITES services to
Industry profile
from Government of India may result in on admissible items subject to an International Markets: Northeast
better tele-services required for setting upper ceiling of INR 100,000/Seat. India is strategically located for foreign
up of industries and Smart Cities, with b. Special Incentives: The following and domestic investors to tap the vast
Guwahati being selected for the first special incentives will be provided contiguous markets of Bangladesh,
batch of Smart Cities to come up in India. within the ceiling oftotal financial Myanmar, China, Malaysia, Thailand,
support, i.e., INR 100,000/Seat. Singapore, Philippines, Indonesia and other
Focus on IT infrastructure: With the
c. Training Incentive: Upto 50% of East and South East Asian countries. India
exception of Arunachal Pradesh and
training expenditure with cap of INR being the eighth largest trading partner
Nagaland, all other states have dedicated
6,000/employee for total regular of ASEAN countries (as of June 2016) and
Software Technology Parks set up. The IT
employees up to the 1.5 times close proximity to SAARC countries, the
Park in Manipur and Tripura have been
(employment target) the number Northeast region of India is positioned
allotted a massive 20,000 sq. ft. and
of approved seats of BPO/ITES to cater to the huge demand in the
35,000 sq. ft. respectively.
operation. international market.338
Lower manpower & Real estate costs: d. Incentive for diversity & inclusion:
The Northeast region, being one of the Special incentive (% of eligible Conclusion and recommendations
most underdeveloped part of India, capital support) for Units providing
Improvement in connectivity to be a
has relatively lower manpower and real employment to women and
focus area and participation of more
estate cost of approximately 50% and persons with disability will be
private players to be encouraged through
40% respectively when compared to Tier provided as
the North East BPO Promotion Scheme
1 cities. 5% for 50% women employment
(NEBPS).
7.5% for 75% women
Favorable Policies: The government India is the sixth largest in R&D spending Engineering Services sector allocated funds for various R&D projects
employment The North East Development Finance
has undertaken several policy initiatives across globe totaling over $66 billion The US, Japan, Germany, France, the UK, such as $72 million for National Automotive
2% for employment for persons Corporation Limited supports
to incentivize and uplift the state of IT/ in 2015 for both in-house and contract Italy, Netherlands, and Sweden are the Testing and R&D Infrastructure Project
with disability entrepreneurs and startups to set up IT/
ITES industry in the Northeast. The R&D and accounted for 2.7% of global worlds largest spenders of Engineering (NATRIP) program. The IITs across India
e. Incentive for providing ITES operations through its North East
Northeast BPO Promotion scheme, which expenditure. In 2016, government spending Services. plan to nurture start-ups and house
employment beyond target: Venture Fund with investment limit up to
was envisaged under the Digital India on R&D was 0.85% of the GDP and is the R&D centres for established firms in
Special incentive (% of eligible INR 100 million for each project.339
Program offers capital incentives, and expected to reach 2.4% of the GDP by The outsourced engineering services order to forge closer industry-academic
capital support) for units providing
other incentives for training, diversity and Software Technology Parks of India (STPI) 2034. The government has declared 2010- market in India would reach $15 billion by collaboration.346
employment beyond employment
employment along with incentives for set up in the five Northeast regions may 2020 as decade of innovation giving a push 2020 from $7.8 billion in 2015 at a CAGR of
target (1.5 times the number of
setting up of BPO/ITES operations. expand to all eight states. to R&D. Around 30% of the top 1,000 global 14%.343 Engineering Services sector
seats) will be provided as follows:
5% for 2X number of seats Availability of skilled manpower, low cost R&D spending organisations are present in opportunities
Government initiatives India.340 As products become smarter and global Given the natural advantage of India, the
7.5% for 2.5X number of seats of infrastructure and huge potential
There are several Gvernment schemes companies seek to provide services engineering services market is expected to
10% for 3X number of seats for providing IT/ITES services to both
running to support the development of IT/ India has the third largest scientific and through internet, they use Indias reach $42 billion at a CAGR of 14% by 2020.
f. Incentive for promoting local developed and emerging economies
ITES industry in NER. technical talent pool in the world. There traditional technology and the emerging However, CRO market includes trial by
entrepreneur: Special Incentive (5% makes Northeast the hot bed for
The North East BPO Promotion of eligible capital support) for units potential investment in the sector. are 162 universities awarding around engineering skills. In this context focus on global companies as well.347
Scheme (NEBPS) seeks to incentivize setting up BPO/ITES operations as a 4,000 doctorates and around 35,000 IP, end-to-end solutions, higher sales, and
establishment of 5,000 seats in respect consortium with local. postgraduate degrees every year. The marketing investments seems to fit into Contract Research Organization (CRO)
of BPO/ITES operations in Northeast Council of Scientific and Industrial Research what India has to offer.344 market
In addition, North Eastern Development runs 38 research laboratories.341 The Indian pharmaceutical industry
region at an outlay of INR 500 million
Finance Corporation Limited (NEDFi) Engineering Services sector growth spends about 6-8% of their sales on R&D,
creating employment opportunities
in association with Ministry of However, as per US Chamber of Commerce drivers compared to 15-20% by companies in the
for about 15,000 persons in BPO/ITES
Development of North Eastern Region report published in February 2017, India Atal Innovation Mission has been created to developed world.348
operations. NEBPS provides the financial
(M-DoNER) has launched the first stood at the 43rd position out of 45 nations facilitate the academicians, entrepreneurs
supports with overall ceiling of INR
dedicated venture capital fund for the in Global Innovation Index,342 with Indian and researchers for working on innovative The Indian clinical trials industry stagnated
100,000/seat in the form of Viability Gap
Northeast region namely North East professionals largely providing engineering ideas.345 post 2012 after government tightened
Funding (VGF) to eligible companies,
Venture Fund. With a corpus of INR 1 services in India for the global companies the regulations and due to attention from
to encourage the growth of the IT/ITES
billion with the primary objective of North which have set up their R&D centres in According to Union Budget 2017-18, the media and activists. There was a sharp
Industry in the North Eastern Region
East Venture Fund (NEVF) to invest in India. India is re-stablishing itself as the government of India is planning to establish drop in the number of trials approved
(NER) through BPO/ITES operations336:
enterprises focused IT & ITES located in most preferred location for Engineering 100 India International Skills centres across (from 262 in 2012 to just 107 in 2013). The
the Northeast region.337 Services and Clinical trials globally. the country. Also, the government has industry is re-orienting towards growth
156 157
after new regulatory framework has been CRO sector potential for global Conclusion and recommendations
implemented which has made the approval expansion As per the 2015 estimates, the private
process quicker and in line with the global The global pharmaceutical companies sector investments in R&D in India was
practices.349 and Indian entrepreneurs have set up about half of the public sector which is
CROs in India as the cost of conducting a generally around 2:1 in case of developed
Joint ventures, alliances and licensing clinical trial is more than 50% cheaper than economies. It indicates that there is an
agreements have increased R&D in the United States or the Europe. The enormous potential for private players
investment in recent years. However, the reasons for low cost of drug development participation and government could
definition of innovation under Patents Act is the relatively low cost human resource incentivise collaboration of public and
and the issuance of India's first compulsory availability for conducting clinical private R&D.
licence in 2012 have slowed down the research.352
efforts of R&D companies in India.350 The Make in India initiative which
CRO sector regulations encourages global companies to
CRO market growth drivers 01. New regulatory changes have made the manufacture in India will lead to increased
With large number of volunteers for clinical approval process quicker. R&D investments provided issues such
trial, qualified medical professionals, 02. The CDSCO has relaxed the restriction as ease of doing business and complex
clinicians and data specialists, and good of not allowing trial investigators to regulations are addressed.
regulatory policies, Indian clinical research conduct more than 3 clinical trials
market is poised for growth. at any given period in time in the
country.353
The global companies are looking to
achieve greater efficiency on R&D Government initiatives
expenditure resulting in growing demand
A s part of DIGITAL India initiative, online
for outsourcing of analytical testing and
licensing portal SUGAM has been set up
clinical trial services and regulations
by the Central Drugs Standard Control
requiring companies to conduct clinical trial
Organization (CDSCO) in March 2016
before it is approved.
for the online application of clinical trial
requests by pharma companies.354
CRO market opportunities
Clinical trial and research is now a major The government is planning a major
business in India with over 100 companies multi-billion dollar initiative with 50%
currently conducting the clinical trials. public funding through public private
India has been increasingly attracting partnership (PPP) model to harness
collaborative contract proposals for Indias innovation capability. The vision
conducting clinical trials and many is to push India into one of the top-five
entrepreneurs have already come Pharma innovation hubs by 2020 with
forward to set up their Clinical Research one out of every 5 to 10 drugs discovered
Organisations (CROs).351 in India at global scale.355
The Department of Pharmaceuticals

Prevalence of chronic diseases, relatively
has prepared a Pharma Vision 2020
low cost of talent and a large pool of
document, with a focus to establish India
volunteers for clinical research makes India
as a leading county for end-to-end drug
a preferred destination for clinical trials.
manufacturing and innovation.356
Clinical trial growth and maturity in India $149.11 million venture capital fund has
is important as with a large and ageing been planned by the Department of
population, India will need to invest in novel Pharmaceuticals to support R&D start-
and targeted therapies to treat its own ups in the pharmaceutical and biotech
growing population of the diseased. industry.357
158 159
About Confederation About Deloitte

of Indian Industry
The Confederation of Indian Industry The CII theme for 2016-17, Building We believe that were only as good as the Thats what makes us truly different at
(CII) works to create and sustain National Competitiveness, emphasizes good we do. Deloitte. Not how big we are, where we
an environment conducive to the Industry's role in partnering Government are, nor what services we offer. What really
development of India, partnering industry, to accelerate competitiveness All the facts and figures that talk to our defines us is our drive to make an impact
Government, and civil society, through across sectors, with sustained global size and diversity and years of history, as that matters in the world.
advisory and consultative processes. competitiveness as the goal. The focus is notable and important as they may be,
on six key enablers: Human Development; are secondary to the truest measure of In India, Deloitte member firms are spread
CII is a non-government, not-for-profit, Corporate Integrity and Good Citizenship; Deloitte: the impact we make in the world. across 13 locations with more than 40,000
industry-led and industry-managed Ease of Doing Business; Innovation and professionals who take pride in their ability
organization, playing a proactive role in Technical Capability; Sustainability; and So, when people ask, whats different to deliver to clients the right combination of
India's development process. Founded in Integration with the World. about Deloitte? the answer resides in local insight and international expertise.
1895, India's premier business association the many specific examples of where we
has over 8000 members, from the private With 66 offices, including 9 Centres of have helped Deloitte member firm clients, (C) 2017 Deloitte Touche Tohmatsu India
as well as public sectors, including SMEs Excellence, in India, and 9 overseas offices our people, and sections of society to LLP
and MNCs, and an indirect membership in Australia, Bahrain, China, Egypt, France, achieve remarkable goals, solve complex
of over 200,000 enterprises from around Germany, Singapore, UK, and USA, as well problems or make meaningful progress.
240 national and regional sectoral industry as institutional partnerships with 320 Deeper still, its in the beliefs, behaviors
bodies. counterpart organizations in 106 countries, and fundamental sense of purpose that
CII serves as a reference point for Indian underpin all that we do.
CII charts change by working closely with industry and the international business
Government on policy issues, interfacing community. Our hard work and commitment to making
with thought leaders, and enhancing a real difference, our organization has
efficiency, competitiveness and business grown in scale and diversitymore than
opportunities for industry through a range 245,000 people in 150 countries, providing
of specialized services and strategic global multidisciplinary services yet our shared
linkages. It also provides a platform for culture remains the same.
consensus-building and networking on key
issues. For us, good isnt good enough. We aim
to excel at all that we doto help clients
Extending its agenda beyond business, CII realize their ambitions; to make a positive
assists industry to identify and execute difference in society; and to maximize the
corporate citizenship programmes. success of our people. This drive fuels the
Partnerships with civil society organizations commitment and humanity that run deep
carry forward corporate initiatives for through our every action.
integrated and inclusive development
across diverse domains including
affirmative action, healthcare, education,
livelihood, diversity management, skill
development, empowerment of women,
and water, to name a few.
160 161
Acknowledgements
We acknowledge the efforts put in by:
Strategic direction
K Kumar
Hemant Joshi
Research team
Vedamoorthy Namasivayam Sneha Prithviraj
Kalpesh Mehta Saurabh Khosla
Amrit Pandurangi Soumyak Biswas
Monish Shah Ashish Mehta
Anil Talreja Manikanda Prabhu
Charu Sehgal Riddhi Lahiri
Arindam Guha Rabani Gupta
PN Sudarshan Pravin Wani
Anis Chakravarty Kiran Vergis
Shree Parthasarathy Ranjan Kotian
Ashesh Jani Akanksha Sharma
Rajat Vig Arpita Garg
Peeyush Naidu Deepshikha Jana
Debashish Biswas Soumya Dalai
Mohammed Shariff Navdeep Verma
Prashant Bhojwani Mukesh Verma
Rishi Suri Rishi Shah
Aanchal Karanth Ankita Chowdhry
Project Management Office

Anu Peisker
162 163
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164 165
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India Services Sector

A Multi-trillion Dollar Opportunity for Global Symbiotic Growth

Emerging Opportunities 146

Message from Confederation Message from

South America Opportunities

Digital transformation of industries across the world

Growing domestic market in India, due to digital economy initiatives

Linkages Growth Enablers

Sector Overview Engineering R&D Digital delivery of Rising domestic demand

Linkages Growth Enablers

Make in India Digital India National Health Policy 2017

For details, see page 60

Focus on imparting skills through online and onsite medium.

Revenue sharing franchisee model

Opportunity to provide world class cost Low cost education

Participation of female labor force and demand for pre-school facilities

For details, see page 52

Banking & Financial Services

Advisory for creating digital identity digital Government focus on digital

Refinancing capital: Real estate, infra and bad loans

Innovation capital: Fintech, RPA, cognitive, blockchain

Investment capital: New banks

Sector Overview Re-engineering capital: GIC/shared services

Global Industry Linkages Growth Enablers

Start-ups / SME in Services

Major market: Domestic Strong IT/ITeS presence

Strong presence of Angel Investors and incubators

Evolving consumer demand

Global Industry Demand for online service

US and UK are the major startup ecosystems Linkages Growth Enablers

Case Study: Start-up India program

For details, see page 73

Media & Entertainment

Shooting in India at historical monuments Opportunities

Increasing penetration of multiplexes

Growth potential in animation, VFX, gaming sectors

Broadcast Asia, Singapore Skill India Start-up India

Cannes Film Festival, France Government Tax exemption

For details, see page 78

Demand for sports infrastructure, favorable government policies

Sports tourism and sports medicine have high potential

Linkages Growth Enablers

Olympic Games Case Study

Emerging African countries High adoption of mobile devices

Untapped potential in rural areas

Demand of data services, digitization

Popularity of non-traditional services

Case Study: Reverse Innovation Success in the Telecom Sector

For details, see page 88

Increasing focus on third party (3PL), 4PL and 5PL logistics

Increase in e-commerce in India

Focus on specialised services such as liquid logistics, temperature-controlled logistics or

Linkages Growth Enablers

For details, see page 93

Retail & E-commerce

FDI investments in multi-brand products Strong distribution and delivery network

Changing demographics and increasing per capita income

Use of technology and digitization

Linkages Growth Enablers

For details, see page 101

South-East Asia, Africa Increased acceptance of PPP structures

Upsurge in technology adoption for better waste management

A number of angel investors backing waste management startups in India

Government supporting waste management through Swachh Bharat Mission, Smart