Investing Big Bucks in India? Consider Large Scale Industries
Investing in a country with a population of over 1.35 billion people is certainly a click among smart businesspeople.
However, a big profit would only be possible by digging deeper on what types of business are profitable in India.
Going big-time also requires sizable capital investment.
India’s top industries include tea, jute, cement, sugar, paper, engineering, and food processing. Furthermore, IT and electronics, software and automobile have had great success in the country.
Traditional Industries in India
Of the list, there are five traditional industries. Their history date back in the late 18th and early 19th centuries.
Indian Tea Industry
The tea industry, one of the oldest trade Indian economies, falls on top of the list of large scale industries in India. Introduced by Britons back in the early 1900s, this industry made an initial kick-off in Assam in 1933. Since then, there has been no stopping its growth. In fact, it took the planters just five years to make the world see how good teas from India are, as it started the exportation of the world-famous tea to England in 1938.
Tea manufacturers were on their own until 1965 when the government finally recognized the economic gains from the tea industry and as such, established tea gardens.
Today, India is among the biggest tea-exporting countries in the world. It produces 27% of the global tea requirement.
Parallel with the growth of the tea industry is the employment of local folks from Assam, West Bengal, Tamil Nadu, Kerala and East Punjab.
As the pilot site of the thriving tea industry, Assam earns the distinction of producing more than half of India’s total production of teas.
Indian Jute Industry
India is distinctively known for its clothes made of soft, shiny fabric referred to as Jutes. This type spun into coarse, strong thread fibre is produced primarily from plants in the genus Corchorus. The plant grows in abundance in many parts of India.
Considered as among the large scale industries in India, the traditional jute production dates back to 1885 in Rishra. where the first power-driven jute mill was established.
After almost half a century, the nearby city of Kolkata went on to put up a number of jute mills.
To date, India hosts 73 jute mills with nearly 44,990 looms out of which only 70 units are in operation.
As years passed, the production of jute textiles in India increased from 837,000 tonnes in 1950 to 1.06 million tonnes in 1970. It further jacked up to 1.39 million tonnes in 1980. In the late 1990s, jute production reached 1.6 million tonnes.
The demand for jute fabrics remains growing to an extent that India fell short of what is required by the market.
Today, the jute industry has diversified. They are now into producing cotton, bags, tarpaulin, carpets, carpet backing, paper-lined hessian and cloth.
Indian Cement Industry
Another large-scale industry in India is cement production. The cement industry in India started way back in the early 1900s in Tamil Nadu. However, it took nearly a decade to put up a systematic cement manufacturing of cement.
Today, there are at least 24 large cement plants in India.
Interestingly one of the biggest and longest-running cement manufacturers in India is the India Cement Company Ltd. at Porbandar, Gujarat.
The combined production of cement is about 262 million tonnes, representing a steady climb from 2.7 million tonnes in 1950.
This sector also employs a significant chunk of India’s local workforce.
Indian Sugar Industry
Countries with vast tracts of agricultural land never miss on sugar production. With an area conducive for a sugarcane plantation, it’s no surprise that sugar production falls well within the list of the large scale industries in India.
India’s sugar industry could be traced 117 years ago in Bihar and Uttar Pradesh. Fifty years later, the industry grew with 138 sugar factories producing 11.34 lakh tonnes. The high demand for sugar prompted industry leaders to establish more sugar factories.
Web sources state India has 414 sugar factories with a combined production of 245.5 million tonnes. Furthermore, the sector has been employing 3.25 lakh workers, on top of 25 million sugarcane growers.
Aside from Bihar and Uttar Pradesh, other states like Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka, also are in the sugar production industry.
Despite difficulties, India’s sugar industry has been expanding at a very fast pace.
Indian Paper Industry
Another age-old industry in India is paper production. A major source of taxes and job provider, the paper production business carved its way into the list of the large scale industries in India since 1925.
With a government-imposed protective tariff in place, the sugar production industry enjoys the leverage of an unregulated revenue system resulting in its rapid progress. The protective tariff provision, however, mandates the paper industry sector to replenish forest resources from where papers come from.
India has 652 industrial units producing paper and paper boards under the private sector. There also are public sector units run by Hindustan Paper Corporation. As of 2013, there are already 759 paper mills in the country.
As of this posting, government data shows India producing 18.4 million tonnes of paper annually.
Large Industries in India Beyond 1950
At the onset of the half-century mark, new industries came in. They introduced the modern innovation and technologies in the country.
Indian Engineering Industry
India’s engineering industry came at the halfway mark of the 1900s. With huge investments embarking on heavy and capital goods industries coming in, the Indian government found it logical to strengthen its position by developing the local engineering industry.
It was during this part of the country’s history that the engineering industry was seen at a rapid pace of development. The country had started producing a lot of ways of producing machine tools, automobiles, diesel engines, tractors, bicycles and motorcycles. During its initial years, the engineering industry comprised 7.5% of India’s industrial output.
Today, this industry is already contributing 31.2% of India’s total industrial output.
Relatedly, the engineering industry accounts for 28% percent of the total industrial employment in the country.
The growth of the engineering industry also allowed India to corner a slice of the global market. The industry helped other sectors like equipment for power plants, steel plants, transportation, mining, chemical processing, petrochemicals, fertilizers, petroleum and many other forms of machines.
Likewise, India exports sewing machines, typewriters, bikes, watches, electric fans, batteries, lamps, refrigerators and washing machines.
What makes the engineering industry attractive to investors is the government deregulation policy.
Indian Food Processing Industry
Food processing failed to impress the global market when it first made an attempt covering the 80s. However, the deregulation of the industry in 1991 effectively lured investors to gamble into it for its development.
India’s food industry has been having a steady climb. This applies particularly to the fruit and vegetable processing industry, fuelled further by strong local demand for processed food and beverage products.
Incidentally, India has yet to fully develop the industry as processed food remains relatively short of the demand, This is even if the country exports food products locally and internationally.
Seeing the potential in the food industry business including fruit and vegetable processing, meat, poultry, dairy and seafood, packaged/convenience food, soft drinks and grain processing, the government of India is providing substantial stimulation to the industry by adopting modern-day technology apt for food processing and packaging.
Indian IT and Electronics Industry
The advent of the internet and mobile gadgets allowed India to diversify into Information Technology and Electronics. This, the industry now tops the list of the large industries in India.
Aptly referred to as the InfoTech industry, India plays a significant role in the world’s promotion and development of the IT industry.
Leading the pack are young Indian nationals embarking on an IT revolution in the cities of Bangalore and Hyderabad.
Of the large industries in India, this one has opened the gate for aspiring young entrepreneurs wielding ideas, knowledge, entrepreneurship and technology to rack up revenue and career growth under an industry that has a phenomenally high growth rate worldwide.
Indian Software Industry
Relatedly, the IT boom in India allowed its sub-sector, the software industry, to grow side by side with the IR and electronics industry.
Recognizing the economic potential of the software industry, the Indian government took initiatives seen to take India to greater heights. It would not be an overstatement to say that the government plans to make its country a global information technology superpower.
As a result, software production emerged as one of the large industries in India. As of now, continues to grow and post a remarkable 50% annual growth.
This industry has also lured foreign companies to infuse huge investments in the Indian Software Industry.
Today, India’s software industry has been globally acclaimed for providing quality services as manifested by international quality certification.
Interestingly, the phenomenal growth in the export of software is because of the comparative cost advantage of India.
Indian Automobile Industry
The last 20 years saw the automobile industry make it among the large scale industries in India. This is primarily because of the government’s liberalization in the automobile sector.
Since then, the automobile industry has seen steady growth with the entry of new manufacturers. This includes multinational transport companies which saw the need to complement India’s economic growth by infusing the transport business.
Equipped with state-of-the-art technology, these foreign companies found India as a viable place for expansion of the automobile industry. Leading Indian automobile companies like Tata Motors, Maruti Udyog, etc. have gone as far as collaborating with leading multinational automobile businesses for technology transfer.
To make the long story short, the Indian automobile companies made it big as with the use of the updated automotive technology. They have been successful to make India’s automobile industry fight for a slice of the world auto industry market.
To date, India’s automobile industry has diversified its product spectrum by coming up with mass production of various categories of vehicles. They have been producing passenger cars, multi-utility vehicles, commercial vehicles, two-wheelers and three-wheelers too.
As of this posting, there are already 15 passenger cars and multi-utility vehicle companies. Furthermore, another 15 firms manufacture motorcycles and trikes and one manufacturer of commercial vehicles. They have all earned a place in the international market, making the automobile industry a lot more promising for those wanting to start one in India.
A Lot More Room to Invest
As it is, India has remained one of the best options to go big-time. However, getting into any of these large scale industries in India would certainly require a thorough study and a good amount of experience and skills. You may also need guidance from legitimate business advisors with vast knowledge and familiarity on how to start business in India
The good thing though is that 3E Accounting has deep roots in India. Our company maintains a fleet of professionals willing to help you form and start a business in India.
For more information, feel free to contact us.