Top 6 Fastest Growing Sectors in India 2024 (2024)

In today's dynamic and ever-changing investment landscape, it is crucial to identify growing industries that offer significant growth potential. Investors can make informed decisions and capitalise on promising opportunities by understanding market trends and analysing key statistics. In this article, we will know which sector is growing fast in India in 2024.

1. Electric Vehicles (EV)

One of the fastest growing sectors in India is the electric vehicle (EV) market. The transition to electric mobility is gaining momentum globally, and India is no exception. The Indian government has set ambitious targets and implemented various incentives to promote the adoption of electric vehicles.

According to industry reports, the Indian electric vehicle market size was valued at US$ 1.45 billion in 2021, and it is projected to reach a staggering US$ 113.99 billion by 2029, exhibiting a remarkable CAGR of 66.52% during the forecast period¹. Despite the challenges posed by the COVID-19 pandemic, the Indian EV market witnessed a growth of 11.34% in 2020 compared to the previous year. According to a report published by Bain & Company, the penetration of electric vehicle in India will reach 40%+ by 2030².

The Indian electric vehicle market is dominated by two-wheelers, which accounted for approximately 90% of total EV sales in 2021. Three-wheelers and four-wheelers accounted for about 9% and 1% of total sales, respectively. The market size and growth rate for each segment vary, with two-wheelers expected to have a CAGR of 67% during 2022-2029, three-wheelers with a CAGR of 64%, and four-wheelers with a CAGR of 63% during the same period.

Several factors contribute to the growth of the electric vehicle market in India. The government's initiatives, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and the National Electric Mobility Mission Plan (NEMMP), have significantly boosted the EV industry. Additionally, reduced Goods and Services Tax (GST) for electric vehicles, income tax deductions, state-level subsidies, and incentives have further encouraged consumers to adopt electric cars.

Investing in the electric vehicle industry can be lucrative as the demand for clean and sustainable transportation solutions continues to rise. Companies involved in electric vehicle manufacturing, battery technology, charging infrastructure, and related services are well-positioned to benefit from the market's growth. Furthermore, the government's push towards electric mobility and increasing consumer awareness of environmental issues make electric vehicles a promising sector for investment.

List of key players in the Electric Vehicle (EV) market in India:

2. Healthcare And Insurance

India's healthcare and insurance sectors have witnessed remarkable growth in recent years. The value of the Indian healthcare market was estimated at approximately USD 180 billion in FY 2023 and it is expected to reach approximately USD 320 billion by FY 2028. The hospital market in India is also expected to grow at a CAGR of 8.0%, reaching USD 193.59 billion by 2032 from USD 98.98 billion in 2023.

In addition, the number of health insurance policies issued has been on the rise. From 48.9 million policies issued in FY20, the number increased to 60.7 million in FY21. This surge in policy issuance reflects the growing awareness and demand for health insurance among the Indian population. As the healthcare and insurance sectors expand, they present attractive investment opportunities for those seeking long-term growth prospects.

List of key players in the healthcare market in India:

3. Renewable Energy

The renewable energy sector is growing rapidly in India, with the country ranking 4th globally. As of July 2024, India’s installed renewable energy capacity exceeds 205.38 GW. This capacity includes various segments such as solar, hydro, biomass and wind energy. Solar energy has seen remarkable growth, with installed capacity reaching 87.2 GW, a thirtyfold increase over the last nine years. India also ranks 4th globally in wind energy, with an installed capacity of 47.07 GW³.

The Indian government has played a pivotal role in achieving this growth by introducing several initiatives to support renewable energy, including the Production-Linked Incentive (PLI) Scheme for high-efficiency solar PV modules and the National Green Hydrogen Mission.

The impressive growth of the renewable energy sector has made it one of the top choices for investors. It is expected to attract over $250 billion in investments, including $15.5 billion for solar PV projects and $2.7 billion for battery manufacturing. India recorded a notable 9.83% growth rate in renewable energy additions in 2022 and aims to achieve 500 GW of non-fossil fuel-based energy by 2030. Policy support also includes allowing up to 100% Foreign Direct Investment (FDI) in renewable energy generation and distribution projects through the automatic route⁴.

The renewable energy sector in India offers immense potential for growth and investment. As the country aims to reduce its dependence on fossil fuels and embrace sustainable energy sources, opportunities for solar, wind, and other renewable energy projects are expected to increase. With favourable government policies and incentives, investing in the renewable energy sector can yield attractive returns while contributing to a greener and more sustainable future.

List of key players in the energy sector in India:

4. Information Technology (IT)

The information technology (IT) sector is one of the key sectors in India and plays an important role in the development of the Indian economy. The overall contribution of the IT sector to the GDP is 7.5%. In FY 2023, the IT and Business Process Management (IT-BPM) industry generated approximately $245 billion in revenue. A significant part of the industry’s revenue comes from exports, with IT services and software exports reaching an estimated $194 billion in FY 2023. Not only this, the sector is one of the biggest employers in India as it gives job opportunities to approximately 5.4 million Indians⁵. The government of India has also taken different initiatives to boost the growth of IT industry. For example, Digital India is a big initiative that has helped the sector.

The IT industry's resilience and adaptability make it an attractive sector for investment. India's skilled workforce, technological advancements, and outsourcing capabilities have positioned it as a global IT hub. The rise of digital transformation, cloud computing, artificial intelligence, and other emerging technologies further enhances the growth potential of the Indian IT industry. As organisations worldwide continue to invest in technology solutions and digital infrastructure, the demand for IT services is expected to remain strong.

Investing in the Indian IT industry can provide long-term growth and profitability opportunities. Companies involved in software development, IT consulting, cybersecurity, and digital transformation are well-positioned to benefit from the increasing reliance on technology across various sectors. Furthermore, the government's initiatives to promote digitalisation and the adoption of emerging technologies create a favourable environment for IT investments.

List of key players in the information technology (IT) sector in India:

5. Fast-Moving Consumer Goods (FMCG)

India's fast-moving consumer goods (FMCG) sector has been experiencing steady growth and is one of the booming sectors in India. According to IBEF, the Indian FMCG market is projected to reach US$ 220 billion by 2025, with a CAGR of 9.4% during 2020-2025. The rural FMCG market is also poised for substantial growth, estimated to reach US$ 100 billion by 2025, with a CAGR of 10.6% during 2019-2025. The online FMCG market is also expected to expand rapidly, reaching US$ 18 billion by 2023, with a CAGR of 31% during 2018-2023.

Several factors contribute to the growth of the FMCG sector in India. The rising disposable income, urbanisation, changing consumer preferences, and the increasing penetration of e-commerce platforms have fueled the demand for FMCG products. Furthermore, the FMCG industry has shown resilience during uncertain times, making it an attractive investment option.

Investing in established FMCG companies or exploring opportunities in niche segments can allow investors to benefit from the growing consumer market in India. Companies focusing on innovation, distribution efficiency, and sustainability will likely excel in this competitive sector.

List of key players in the FMCG sector in India:

6. Infrastructure

The Indian government has taken different initiatives to boost the development of the infrastructure sector in India. National Infrastructure Pipeline (NIP) is one such initiative that aims to invest $1.4 trillion in infrastructure projects by 2025. Similarly, Gati Shakti is also a multi-modal connectivity master plan which aims to invest $1.3 trillion by 2025⁶. Smart Cities Mission and Housing For All are also big projects announced by the government.

These initiatives have made India’s infrastructure sector a lucrative opportunity for investors. Both, domestic as well as international investors are interested in investing in this sector. For example, Saudi Arabia has plans to invest approximately $100 billion in India which will go into the energy and infrastructure industries.

Infrastructure development is crucial in supporting economic growth and improving quality of life. The Indian government's focus on initiatives like Smart Cities, affordable housing, renewable energy infrastructure, and transportation networks opens up opportunities for investment in various sub-sectors. Projects related to roads, highways, airports, railways, power generation, and urban infrastructure are among the areas that offer potential returns for investors.

Infrastructure investment can provide long-term, stable returns as the demand for improved infrastructure facilities rises. However, it's important to note that infrastructure projects often involve long gestation periods and require careful evaluation of risks and regulatory factors.

List of key players in the Infrastructure sector in India:

Conclusion

In conclusion, the healthcare and insurance, renewable energy, IT, FMCG, infrastructure, and electric vehicle industries are emerging sectors in 2024 to invest in. These industries offer substantial growth potential, driven by favourable market conditions, government initiatives, and changing consumer preferences.

However, investors must conduct thorough research, analyse market trends, and consider their risk tolerance before making investment decisions. You must be wondering how you can capitalise on the growth of such booming industries. Get exposure to high-growth sectors by investing in alternative investments via Grip Invest. Explore Grip Invest now!

References:

1. Fortune Business Insights <https://bit.ly/3AxW5We>
2. Bain & Company, Accessed from: https://www.bain.com/insights/india-electric-vehicle-report-2023/
3. Invest India, Accessed from: https://www.investindia.gov.in/sector/renewable-energy
4. India Brand Equity Foundation (IBEP),Accessed from: https://www.ibef.org/industry/renewable-energy
5. Statista, Accessed from: https://www.statista.com/topics/2256/it-industry-in-india/#topicOverview
6. India Brand Equity Foundation (IBEP)Accessed from: https://www.ibef.org/industry/infrastructure-sector-india/infographic

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