India economy forecast 2022: sectors to watch out for
Two years have passed since the world was hit by the deadly coronavirus and now we all can say that we’re living in the age of pandemic. As the world grapples with yet another variant of the virus, India continues to make great strides on the vaccination front and keep the economic activity running, even as everyone globally fears another shutdown.
So, how’s 2022 going to be for India? Given that the Indian economy stood up to many of its promises in the previous year and have given great hopes to the world for the new year ahead, we’re looking at the top three sectors to watch out for in 2022 and how they are going to perform.
Real Estate Manufacturing Goods
In the year 2021, the real estate industry had strong growth. And this upward tendency has encouraged the rise of many of the sector’s ancillary industries, particularly the real estate manufacturing goods sector.
The real estate inventory overhang in India continues to drop, and the demand will only increase in the coming months, bringing in more money to this industry. This recovery was assisted by governmental reforms such as GST, RERA, and REIT, which were implemented to provide the industry a boost.
Today, the building material industry stands at around $225 Billion in terms of market size. The projected growth rate for 2022 is around 10%, and it is estimated to clock a CAGR growth of 8% to 9% in the next five years. In fact, sub-segment within this industry like Ready-Mix-Concrete, uPVC, Tiles are all gearing up for an exciting 2022.
Here are some important figures that give us an insight into the industry’s growth projections
The Ceramic Tiles Industry:
The market for ceramic tiles in India was valued at $3,720.2 million in 2019, and is expected to expand to $7,144.7 million by 2027, with a CAGR of 8.6% from 2020 to 2027.
The Ready Mix Concrete Industry:
According to a Mordor Intelligence analysis, the Indian market for uPVC doors and windows is expected to increase at a CAGR of more than 7% from 2021 to 2026.
In 2022, technology will continue to play a significant role, particularly in the areas of home automation and workplace automation. Facial recognition, auto sensor lighting, and other innovations in building products are expected to be some of the most prominent trends in 2022.
According to an estimate from major IT market research and advisory firm Gartner, Inc., IT investment in India would reach $101.8 billion in 2022, up by 7% from 2021.
In India, all areas of IT spending are predicted to expand in 2022, with software being the fastest rising. In 2022, software spending is expected to reach $10.5 billion, up 14.4% from 2021. While spending on software is expected to nearly quadruple in 2022 compared to pre-pandemic levels, growth will be slower than in 2021.
As hybrid work adoption increases in the country, there will be an uptick in spending on devices in 2022, reaching $44 billion, an increase of 7.5% from 2021. The growth in devices is a combination of two components – hybrid work and pent-up demand from 2020 for device upgrades,” said Roy. “Spending on devices will make up 43% of total IT spending next year.
One industry that has been silently but steadily showing growth is the Sugar industry in India. Sugar industry in India is expected to grow by 6-7% in the years 2021-2022 due to growth in exports of sugar and ethanol.
What has further added to this positive outlook for the industry, is the Indian government’s measures to boost ethanol production. In an effort to reduce import of petroleum products, the government has been encouraging farmers to produce ethanol that can be blended with petrol and used as a fuel in vehicles.
Maruti Suzuki, Toyota, Honda, BMW and Mercedes have been told to make vehicles that can run on ethanol based fuel, said Union Minister for Road Transport and Highways Nitin Gadkari in an Agro-Vision event in Nagpur earlier last year while encouraging farmers to grow more sugarcane plants. Plus, ICRA had earlier reported that in light of surged global sugar prices, the export prospects look promising for the upcoming sugar season even if export policy isn’t announced.
As 2022 begins, a flurry of developments, ranging from the budgetary announcements to continuation of stimulus measures to monetary policy, will set the tone for the domestic economy. And with a positive forecast for these 3 thriving sectors to watch out for, we have great hopes from the year too.
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