2014-02-11 17:23:34 - What are the opportunities up for grabs and the challenges facing investors for India's bludgeoning construction industry?
The construction industry, India’s second largest economic sector after agriculture, is a fast-growing opportunity for foreign direct investment (FDI). What are the opportunities up for grabs and the challenges facing investors? Japnit Singh, Senior Director of Spire Research and Consulting, shared his insights in Construction Sphere magazine.
The rise of India’s construction industry is a business opportunity too big to ignore. One sub-sector of great interest is the construction equipment market, which is seeing an increasing number of international players. This market is expected to grow from USD20 billion to USD25 billion between 2013 and 2020.
Investment in the construction industry has contributed 11 percent of India’s Gross Domestic Product (GDP). Registering an annual growth of 30 percent, this sector has been
driven by governmental plans as well as private investment in infrastructure development.
Opportunities are aplenty. The private real estate sector is booming – improved technology is set to reduce turnover time. For example, the prefabricated construction materials sector is booming. One trend fuelling construction demand is renewable energy projects.
Challenges remain for foreign investors, who have to deal with minimum area requirements, entry guidelines and minimum lock-in periods for investment. However these will be relaxed under the government’s Planning Commission proposal.