India’s presidency of the G20 summit comes at a time when not only is the economy being recognised as one of the most powerful growth engines but the stock market has also occupied a special place in the minds of emerging markets (EM) investors whose confidence has increased by $19 billion in FY24 so far.
As world leaders say ‘Namaste India’ in New Delhi this week, one can’t help but take notice of the 3Ds – Demography, Digitalisation and Domestic consumption – of India growth story.
As India takes centre stage at G20, these 4 sectors, representing the nation’s diverse industrial landscape, are poised to attract significant global attention:
1) Manufacturing
China+1 was a requirement during Covid which led to an opportunity for India to market itself as one of the factories of the world. Since then, the PLI scheme has improved sentiment around large-scale manufacturing and even made it the cornerstone for India’s growth story.
2) Defence
India’s capex in defence has grown at a CAGR of 9% over the past decade and analysts believe it can grow in sync with or closer to nominal GDP growth rates in the future.
“With favourable government policy and import embargo for 411 equipment, a large part of indigenization benefits is yet to reflect in the revenues of domestic companies due to a time lag in execution post receiving orders. With strong R&D, development of large indigenous platforms and favourable policies, we expect imports to decline sharply and share of exports to increase on the back of favourable policy initiatives,” said Swapnil Shah of StoxBox.
3) Infrastructure
Led by investments in roads and railways, the central government’s budgeted total capital spend is at Rs 10 trillion, 37% more than FY23.
“We think India is at the cusp of a capex cycle. With real interest rates trending down, gross fixed capital formation can once again pick up the pace as it did in previous cycles,” HSBC said, adding that the quality of expenditure is likely to increase with a focus on capex spending over revenue expenditure.
Many Indian companies like Reliance Industries have started investing in green energy which can be leveraged by other countries to partner with India in building a sustainable environment. “Renewable energy and manufacturing-related companies may benefit as discussions between members in G20 would revolve around the transition towards renewables and weaving mutually beneficial trade policies,” points out Sreeram Ramdas, Vice President at Green Portfolio PMS.
Other than these four sectors, analysts also say the aviation sector, witnessing impressive growth, offers lucrative investment avenues.
“Additionally, the real estate sector anticipates heightened foreign interest, while the burgeoning space sector, boasting over 400 private entities, is set to captivate global stakeholders,” says Sonam Srivastava of Wright Research.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)