The Indian economy is on an upward trend, and finding the right sectors can lead to huge investment opportunities. As India progresses, key sectors are likely to witness major growth and therefore hold great promise for investors. From the technology boom to the rise of renewable energy, each sector presents unique chances to capitalize on India’s development.
This article discusses the 5 key industries that are likely to have tremendous growth over the next few years.
Which 5 Sectors would Benefit from India’s Growth?
India's economy is set to grow significantly over the next decade, making now a great time to invest in the country. Here are five promising sectors to invest in stocks in India.
1. Information Technology (IT)
The Information Technology (IT) sector in India is a powerhouse of growth, driven by a combination of skilled labor, entrepreneurial culture, and favorable government policies. This sector is also one of the key contributors to the total GDP of India and occupies around 7.5%.
Originally focused on software services and outsourcing, the IT industry is now diving into advanced technologies like Artificial Intelligence (AI), Data Analytics, Cloud Computing, and the Internet of Things (IoT).
Major IT hubs in India, like Bengaluru, Hyderabad, and Pune are home to the world’s biggest IT companies along with thousands of startups, a few of which have even become “Unicorns”. In fact, the sector is making a huge contribution by earning significant export revenue and employing lakhs of people, making it a key player in India’s economic progress.
2. Energy Sector
In recent months, the war in Ukraine has led to a big increase in energy prices, including oil and natural gas. At the same time, India's growing economy, efforts to bring electricity to rural areas, and new schemes for domestic manufacturing are driving up electricity demand.
As a result, Indian companies that produce and export energy-related products are likely to see higher profits due to the steady demand for energy.
Companies investing in renewable energy sources are particularly worth noting, as they will benefit from these trends in the coming years.
3. Healthcare
The healthcare sector in India is experiencing significant growth, driven by substantial investments in infrastructure development and technological advancements.
The Union Health Ministry’s budget allocation for 2024-2025 has increased by 12.59%, reflecting the government’s prioritization of healthcare expenditure. The healthcare market, valued at USD 98.98 billion in 2023, is projected to grow at a CAGR of 8.0% from 2024 to 2032.
Additionally, segments like telemedicine and AI applications in healthcare are witnessing rapid expansion, with telemedicine expected to reach USD 5.4 billion by 2025. This growth is further supported by the inauguration of new AIIMS and other healthcare infrastructure projects across the country.
4. Fast-Moving Consumer Goods (FMCG)
The FMCG sector stands out as one of the most secure investment options in India due to its constant demand for essential products. In fact, The FMCG market in India is expected to double from $110 billion in 2020 to $220 billion by 2025.
Unlike luxury items, vacations, or real estate investments, essential goods such as packaged foods, drugs, consumables, dry goods, beverages, and toiletries are always needed.
Consequently, investing in the FMCG sector can be a stable and long-term choice. With its steady growth potential, FMCG companies are highly favored by investors seeking reliable opportunities in India’s market.
If you’re aiming for a safe investment with consistent demand, the FMCG sector can be an ideal option.
5. Infrastructure Sector
As India continues to develop, the infrastructure sector holds significant potential for future growth. The market is expected to reach approximately USD 204.06 billion in 2024 and grow to USD 322.27 billion by 2029, with a CAGR of 9.57%.
The government’s recent budget for 2024-25 outlines substantial investments in key areas such as railways, roads, airports, highways, expressways, shipping, aviation, waterways, mass transit, ports, and logistics. This focus on infrastructure is expected to drive the country’s economic expansion. However, the success of these projects depends heavily on a skilled workforce.
Investing in infrastructure sector stocks can offer long-term benefits, as it is one of the fastest-growing industries. Additionally, government initiatives like Make in India and smart city projects are supporting this growth.
If you’re interested in investing in such potential growth areas, opening a demat + trading account is a must, which will allow you to buy and sell stocks efficiently.
The Bottom Line
India’s growth story is being shaped by five exciting sectors with immense potential. From technology and renewable energy to healthcare, infrastructure, and consumer goods, these areas are ripe for investment. Remember, having a demat account is important to invest. It can streamline your investment journey, making it easier to trade and manage stocks in these booming sectors.
Disclaimer: No Business Standard Journalist was involved in creation of this content