Overview of Industries to Start a Business in India

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According to SBA (Small Business Administration), more than 6,00,000 businesses start every year. Starting a business is not easy. You need an idea for your business, test feasibility, know your market, and reach customers. However, before all these processes, it is important to know under which industries to start a business and if it is a good industry.  

Also read, 9 signs that you need to start your own business

1. Healthcare

Health-consciousness is increasing rapidly among people. Therefore, healthcare has become one of the largest industries to start a business, from simple pharmacies and hospitals to complex organic food production and laboratories. 

Barriers to entry: 

  • High in medicinal businesses 
  • Low in businesses like health data management, biotechnology, and personalized health.  

Related: Seven healthcare industry trends to watch in 2020

CAGR: Expected to rise by 7.9% from 2020-2027

Leading companies in the industry: Fortis Healthcare Ltd. and Apollo Hospitals 

New startups: PharmEasy and CureFit

2. Retail

Well, even Warby Parker is doing it. This industry, with both online and offline customer retail businesses, is booming with no end to be seen. Post World War II, there has been a tremendous increase in the retail industry. In addition, according to a survey in 2006, only 38% of Indian retail store owners faced stiff competition. 

Barriers to entry:

  • High for offline retail stores due to location and capital investment
  • Low for online retail stores

CAGR: Growing at 9-11%

GDP expenditure: Around 10% of GDP spent by India

Read more: Retail industry growth analysis 2019-2024

Leading companies in the industry: Reliance Retail Ltd., Shoppers Stop, and Aditya Birla Retail

New startups: Ecohoy and ShopKirana

3. Clean Packaged Drinking Water

If you care about public health and aspire to earn out of it, the packaged water industry is one of the most feasible and promising industries to start a business. Unfortunately, more than 700 million people, worldwide, do not have access to safe, clean drinking water. Thus, that could be your target market. 

Barriers to entry: High investment required (to build up the mechanism producing clean water). 

CAGR: Expected to rise by 9.0% from 2020 to 2023

Leading companies in the industry: Bisleri, Aquafina, and Kinley

New startups: Swajal Water ATM and Amrit

4. Education

India’s literacy rate is at 74.04%, around 5% higher than the previous year, 2019.  We surely are growing to understand the importance of education in our lives. On the other hand, new startups are breaking and entering into the traditional Indian education system to provide better education to students at their comfort. 

Read more: 4 tips to set up successful education startup

Barriers to entry: 

  • Low for online startups
  • High if you plan to start a new educational business offline, like colleges and coaching centers

CAGR: Around 43.85% (2019-2024)

GDP expenditure: 3% of total India’s GDP

Leading companies in the industry: Byju’s, Unacademy, and Toppr 

New startups: Walnut Knowledge, XPrep, and Dost Education

5. E-commerce (Electronic Commerce)

By now, most of us have a basic idea of the importance and growth of the E-commerce industry. This easy-to-set businesses-online industry covers all the transactions of goods and/or services online. As of 2019, more than 400 million people come under this category: internet users, this is just in India, you can picture the broad market worldwide. 

Barriers to entry:  Overall low. However,

  • High level of customer demands (qualitatively)
  • Tough competition

CAGR: Expected to rise by 19.6% from 2019-2023

Leading companies in the industry: Amazon, Flipkart, and Paytm

New startups: CrossBeats and A Little Fable

6. Logistics 

With the successful arrival of the E-commerce industry in India, logistics hopped on its back and made its way into the market. In addition, as the approach to quality of life is increasing within the consumers, businesses in this industry are reaching new heights. Also, technological and automation advancement has made the whole process easier for both consumers and entrepreneurs. 

Barriers to entry: Low with less investment

CAGR: Expected to grow at 10.5% between 2019- 2025

GDP expenditure: The Indian government spends 13% of its total GDP on the logistics industry

Leading companies in the industry: TNT express, Gati, DHL, and Blue Dart

New startups: LogiNext and Locus

7. Automobile

Automotive a.k.a automobile industry is one of the world’s largest industries by revenue. The businesses in this industry are highly diversified, from manufacturing, marketing, to simply repair shops. India automobile industry produced more than 4 million cars in 2018, ranking the fourth-largest passenger vehicle producer in the industry.

Barriers to entry: 

  • High level of import duties
  • High due to difficult and constant product management because of poor road conditions. 

CAGR: Increased at 2.36% in 2020 from 2016

Leading companies in the industry: Tata Motors Ltd. and Maruti Suzuki India Ltd.

New startups: Xoocar and Revolt Intellicorp

8. Technology

The IT (Information Technology) industry consists of software and hardware manufacturing, IoT, Artificial Intelligence, and telecommunications industries under its umbrella. India is the second-largest internet population in the world, demonstrably, it makes the country more susceptible to cybercrimes. 

Thus, this paves the road for the growth of business in the cybersecurity sector. 

Barriers to entry:

  • High in telecommunications and artificial intelligence
  • Low in software and hardware

CAGR: 9-12% growth expected in IT services companies in India

Related: How to take your business online amid Corona

Leading companies in the industry: Wipro Limited, Tata Consultancy Service, and HCL Technologies

New startups: Meesho, and CRED 

9. FMCG

The FMCG (Fast Moving Consumer Goods) industry includes businesses in food, alcohol, soft drinks, toiletries, fruits, dairy products, and vegetables. These FMCG products hold 55% of the total urban spending in India. 

FMCG is the fourth-largest sector in the Indian economy with some of the leading companies falling under this industry. 

Barriers to entry: Medium in India

CAGR: Expected to grow at 27.9% by 2020

Leading companies in the industry: Parle, Hindustan Unilever Limited, and ITC Limited 

New startups: Mamaearth and Sattviko

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