Today China and India are among the fastest
growing economies in the world that also present tremendous market
opportunities to those willing to join the fray for newer growth opportunities.
They are no longer just cost-effective manufacturing and services centers, but
the world’s two biggest markets with rapidly expanding domestic market and
infrastructure needs.
For the industrial
automation sector Chindia market is even more important. According to ARC
Advisory Group’s 2013 research report titled, Human Machine Interface Software and Services Global Market
Research Study, “both Chinese and Indian economies will
continue to be a growth engine for HMI software and services as they pursue
expansion and improvement of internal infrastructure and manufacturing
operations to meet increasing domestic demands, as well as to increase energy
efficiency and the quality of their processes.” When it comes to HMI software
and services Asia remains the world’s third largest market. ARC’s 2013 market
research study predicts that the Asia will be the fastest growing region at
almost 10 percent compound annual growth rate (CAGR) from 2012 to 2017.
The economy of India is
the tenth-largest in the world by nominal GDP and the third-largest by
purchasing power parity (PPP). The World Bank sees 6.7% GDP growth for India by
FY2014–15. With a young and rapidly growing population, India is faced with a
multitude of challenges including city infrastructure, transportation, water
& waste water management, power generation and clean drinking water. China
on the other hand is the world’s second largest economy as well as the largest
exporter of manufactured goods. China has made huge investments made in
infrastructure and results are there for all to see; however, it also faces
challenges related to rapid urbanization, such as city infrastructure
development and management, waste water management, and power.
Opportunities in the
Guise of Problems
Water & wastewater,
power generation, oil & gas, mining & metals, electronics manufacturing
and automobile are the key industries with great potential in both China and
India. According to ARC Advisory Group study (ARC’s 2011 report, Human Machine
Interface Software and Services Worldwide Outlook), “the water & wastewater
industry represents one of the greatest opportunities for the automation
business as a whole, and the HMI software and services market in particular,
through the next 20 years. The infrastructure needed to supply clean water and
help protect water sources from human, industrial, and agricultural
contaminants is sorely burdened on many different fronts.”
Rapid population and industrial
growth in both China and India have posed few infrastructure-related
challenges. The cities produce a huge amount of sewage, wastewater and
industrial effluents, most of which is dumped almost untreated in rivers and
other water bodies. This has badly affected the health of the major rivers in
China and India. Ganges, Yamuna, Jian and Yangtze are among the world’s most
polluted rivers. Underground water table is also decreasing at an alarming rate
in most urban areas. There is an increasing demand for establishing proper
means to protect water sources. The government of China aims to invest 1.8
trillion yuan (US$280 billion) in water conservation projects by 2015. City
infrastructure is yet another challenge which is an opportunity in disguise. Most
Indian cities are not well equipped to manage the demands of growing
population. The Indian Government is planning to spend close to US$1 trillion
on a variety of new infrastructure projects between 2012 and 2017, including
roads, airports, power and urban regeneration. There is a tremendous
opportunity for companies involved in providing infrastructure solutions
related to transportation, energy, manufacturing, and traffic management.
India’s is fast emerging
as a "Global Manufacturing and Supply Hub" in several areas. India is
Asia's third-largest automobile market. Experts believe that unlike China,
India's manufacturing will be selective and largely concentrated on high-end
military, aerospace and industrial raw materials. The Indian automation industry
currently has a turnover of over $930 million and is expected to grow at an
annual rate of 20-25 percent. Industrial automation in India is still in its
nascent stage; however, it has tremendous growth potential in near future.
India and China are emerging
as the two biggest markets for Industrial Automation & Controls business.
If a company wants to remain relevant, sustain its growth and increase revenue,
it must focus on Chindia market. One must also have a sound understanding of
socio-politico-economic scenarios of these countries. In India you need to have
patience while in China you need to be cautious, if you want your business to
succeed.
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