Fastest Growing Sectors in India 2024 with Investment Potential

Which Is the Fastest Growing Indian Sector in 2024-2025?

In today's highly dynamic and fast-developing investment world, there has been a clear need to establish emerging industries with promising high returns within time frames. Investors who understand market dynamics and focus on appropriate statistics may properly organise such investments. In this article, we will look at several industries that are poised to do well in 2024.

Key Highlights 

  • India's outsourcing industry is changing aggressively. With progress in artificial intelligence, data analytics, data science, and big information, it will hit the $300 billion mark by 2025.

  • FAME policy and PLI will ensure that the automobile sector recovers in the future and meets all consumers' demands for electric vehicles.

  • The medical and insurance sectors have registered exemplary performance over the previous years, with the Indian healthcare sector, according to an estimate, crossing $372 billion in 2022.

  • While the healthcare market is poised to hit the mark of $94 billion in 2025 by increasing knowledge about healthy living, cost implications for individual households.

Fastest Growing Sectors in India 2024-2025

Explore the thriving sectors in India for 2024-2025. Gain valuable knowledge about the fastest-growing industries and seize new opportunities.

1- IT Sector:

The rate at which the IT Tech business has changed and grown within a short period of two years is almost unimaginable, especially in Artificial Intelligence, Data Analytics, Data Science and Big Data.

In Indian IT, about 33 start-ups have become unicorns, meaning their value is over $1 billion. The Nifty Index of the IT Sector has shown an unbelievable 132% return in the last two years. India is the second-largest market in the online world, with over 560 million internet users.

Further, on 16 January, Piyush Goyal, the Union Commerce and Industry Minister, stated that India's IT sector could multiply service exports to $1 trillion annually. It is evident that India has made many achievements in this vibrant sector.

The country's IT market has progressed rapidly, and sales are expected to exceed $300 billion in 2025. The Indian automobile sector employs millions and contributes 7% to GDP. 

Legislation, electric vehicle adoption, and customer desire have hurt the Indian automotive sector. Urbanisation, infrastructure, and prosperity will revive the industry in the upcoming years.

FAME, among other Indian government programmes, attempts to improve the automobile sector. Under this initiative, electric cars are promoted nationwide. The Production Linked Incentive (PLI) and other government incentives promote industrial development.

Government initiatives, rising earnings, and a larger consumer base could boost the Indian auto sector in the coming years. However, the corporation may be affected by rising fuel prices, client preferences, and global competition.

2- Healthcare And Insurance Sector:

Insurance and healthcare have developed rapidly in India. In 2023, the Indian healthcare sector maintained its robust expansion, reaching a valuation of USD 372 billion. Between 2022 and 2025, the health insurance business is expected to grow to $650 billion. The emphasis on complete insurance coverage, rising healthcare expenses, and health awareness drive this development.

Additionally, additional health insurance policies have been granted. In FY21, 60.7 million insurance policies were issued, up from 48.9 million in FY20. Rising demand and awareness of health insurance among Indians drive policy issuance. 

3- Renewable Energy Sector:

Investors can also invest in renewable energy in 2024. The 95.66 gigawatts of renewable energy capacity installed in India at the end of March 2021 are a very high number.

This figure comprises:

  • 4.7 GW small hydropower

  • 10.31 GW biopower

  • The balance from wind and solar arrays totalling capacities of 39.24 GW

  • The Indian Government is working towards producing 500 GW of renewable energy by 2030.

  • The remaining electricity must come from wind (60 GW), biopower (10 GW), and modest hydropower (5 GW). The wind must supply the remaining electricity after solar provides 100 GW.

India's renewable energy industry has so many growth and investment opportunities it's hard to imagine. Solar, wind, and other renewable energy initiatives will increase as fossil fuel demand decreases. Enacting government laws and incentives can assist in combating pollution and increasing profitability if they focus on developing new forms of renewable energy.

4- Infrastructure Sector:

India's fast growth and modernisation have created infrastructure investment opportunities. IBEF anticipates India spending $1.4 trillion on infrastructure from 2019 to 2023. We expect the market to increase by 7.6% annually between 2016 and 2025.

This market is expected to increase 7.6% annually between 2016 and 2025. Notably, construction is set to grow at a 7% CAGR from 2019 to 2024, but transport production will increase by around 8%.

Infrastructure development is crucial for both economic growth as well as in improving living standards. The Indian government provides affordable housing, transit networks, smart cities, and renewable energy infrastructure to encourage investment in many industries.

5- Fast-Moving Consumer Goods (FMCG) Sector:

The Indian FMCG business will continue to develop. According to the IBEF's findings, sales of Indian fast-moving consumer goods should amount to over 230 billion dollars in 2025. This shows an impressive 9.4% compounded annual growth rate during 2020-2025.

The rural FMCG market, which may reach $100 billion by 2025, will see a significant CAGR rate of 10.6% during the forecast period.

The Online FMCG market is also set to grow exponentially, reaching over $80 billion by 2023 at a CAGR of about 31% during 2018-2023. With the growing consumer market in India, investing in mature FMCG companies or exploring opportunities with niche segments can benefit investors.

Final Words 

The businesses that offer investment opportunities in terms of the rising sectors for 2024–25 include information technology, FMCG infrastructure, electric cars, health and insurance, and Information Technology. Depending on the market condition, government regulations, and consumer demand, these industries may have much potential for growth.

However, before making a selection, investors must spend considerable time studying, closely examining market patterns, and assessing their level of risk tolerance. You might be wondering how to take advantage of the booming sectors' quick expansion.

FAQs

What is the fastest-growing sector in India in 2024? 

As noted by The Economic Times, IT Tech, which includes artificial intelligence, big data, and the like, will be India's fastest-growing sector in 2024. The sector has generated several unicorn start-ups and has a high potential for exports and innovation.

What is the fastest-growing industry in India in 2025? 

The World Economic Forum report indicates that renewable energy will be the highest-developing enterprise in India by 2025 and will need 175 GW of corresponding power flow for over a decade. The fight against emissions and the search for clean, affordable energy spur the renewable industry.

Which sectors are expected to give good returns to investors in the future?

Among them are health and insurance, food and digital, which offer investors high returns. At the same time, the rest are financial infrastructure software and services such as chemicals and petrochemicals textiles. Some factors that have been accused of being behind these sectors' growth include demand, use and application technology, and innovation.

What are the sectors that will have more job opportunities?

The e-commerce and retail, healthcare and pharmaceuticals, fintech firms such as Paytm, agriculture and Agri-business start-ups like Unnati platform for farmer training, electric vehicles-green mobility- various EV manufacturers in India-logistics and transport businesses companies, fashion sectors are expected to generate more future employment. These areas are expected to create more jobs due to the quick growth, digitalisation and social needs.

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Samiya Saeed 17 Mar, 2024

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