When it comes to the economy, there aren’t many certainties. While India’s economy is doing fairly well, as per the International Monetary Fund’s World Economic Outlook, it is also expected to see some robust growth in 2023.
Pierre-Olivier Gourinchas, Chief Economist of the IMF, stated that there is an expected growth of 6.8% by the end of 2022, and projected a 6.1% for the next year. The Asian Development Bank projects an approximate 8% growth for 2023 owing to growing public investment in infrastructure.
While speculations like these may seem like shining light for investors, it is important to know which is the best sector to invest in India for long term, since every industry has its own unique characteristics and financial trajectories. It is, hence, crucial to understand how each sector is performing and is projected to perform so as to make educated decisions that can help you in the long run.
Here are some of the future sectors to invest in India in 2023:
Healthcare and Health Insurance
Healthcare in India is one of the fastest growing sectors, not just in terms of revenue, but also in terms of employment and is one of the best sector to invest in India for long term. The Covid-19 pandemic caused a shift of focus towards the development of better healthcare infrastructure and technologies, with more diagnostics services being offered throughout the country.
India’s healthcare sector, which includes everything from hospitals, pharmaceuticals, and medical equipment and supplies to health insurance, has grown rapidly over the last 5 years, with a compounded annual growth rate of nearly 22% since 2016.
Not only that, the rapid growth has allowed for the creation of large employment opportunities in the sector. Furthermore, government initiatives, FDIs, and shift towards data-driven healthcare is ensuring a booming healthcare industry in the country. This has resulted in a huge demand from both domestic and global investors in this department. There are plans for increasing the healthcare expenditure from the government by 2.5% over the next three years.
India’s Pharmaceuticals sector, one of the best sector to invest in India for long term, is also one of the largest in the world, with a market size of about USD 41 billion, and is expected to grow to around USD 130 billion by 2030. It is also estimated that India’s biotechnology market will grow by about 30% by next year.
To add to this, health insurance is the second largest insurance business, contributing about 20% of the total insurance-based businesses. Furthermore, Covid-19 resulted in a huge increase in the number of people opting for health insurance.
With everything combined, the healthcare and health insurance industry might be one of the best sectors to check out in 2023.
Environmental and climate degradation is a global crisis that requires major collaboration and infrastructure changes globally to resolve. There is immense international pressure when it comes to reducing carbon emissions, but India has managed to go above and beyond when it comes to measures against climate change.
Advancement of renewable energy, one of the best sector to invest in India for long term, has allowed for a rapid shift away from fossil-fuel sources, with almost USD 80 billion invested in renewable energy over the past 7 years, and the total energy capacity nearly doubling during that time (from 76.4 GW in 2014 to 151.4 GW in 2021). There are goals to double the capacity further by 2030, making the renewable energy sector a prime investment opportunity.
Information Technology (IT)
With Industry 4.0 underway, the IT sector is seeing a major shift as well. While there is still demand for traditional IT jobs, the field of data science, artificial intelligence, and cloud computing has seen such a major boom in the last few years that it is quickly becoming one of the most lucrative sectors in the country.
Most Indian IT companies partner with one of the top three cloud platform providers in the world – Amazon (Amazon Web Services), Microsoft (Azure), and Alphabet (Google Cloud), each of which have shown over 30% increase in revenue over the past year.
Beyond the cloud, there has been a rapid rise in IT startups in India, with around 33 IT startups surpassing a valuation of USD 1 billion within the last two years. As technology continues to advance, India will continue to prove itself a major player in the game, making the IT sector one of the most valuable sectors in the country for years to come.
There has been a massive growth in the automotive industry over the past few years. The automobile industry not only contributes 7.1% of India’s GDP, but also 49% of its manufacturing GDP.
Passenger vehicles saw a 44% growth in the last year, while commercial vehicles displayed a growth of around 28%. This growth is due to a combination of many factors, including increasing disposable income, better financing opportunities, urban growth, and great technological advancement.
Moreover, there has been a huge amount of interest in electric vehicles (EVs). There has been a 218% increase in the number of EV units produced over the past year. The rising demand, along with government initiatives is pushing automobile companies to be a part of the booming EV market, with companies like Tata Motors and Hero being the frontrunners. The automobile industry is set to see some of its highest sales in 2023, making it a great target for investors.
With the way the Indian economy is growing, there are plenty of good investment opportunities in many sectors. However, as with every other case, it is important to do your own research and consider the potential risks and rewards of any investment.
Therefore, you shouldn't pass up these possibilities. So, stay connected & invested by opening a Demat Account with a reputable online stock trading firm and full-service stock broker in India that puts its customers' needs on top priority.