Economic Sectors in India Winners & Losers Entering 2024

India's economy encompasses industrial-scale agriculture, traditional village farming, handicrafts, and multiple modern industries. Over the past decade, the planet’s most populous nation has done loads to transform its economy, attaining a spot as a global economic juggernaut. In 2024, its GDP is predicted to grow by 6.2%, and the guess for 2025 is that India’s GDP will increase by 6.6%. Below, we analyze what sectors are expected to do well. And which ones are likely to note declines in 2024.

BFSI-NBFC – Winner

For the uninformed, BFSI stands for Banking, Financial Services, and Insurance, and NBFC is short for Non-Banking Financial Company. Hence, BFSI-NBFC refers to a sector of non-banking entities within the wider BFSI sphere. To further clarify, NBFCs are institutions that supply investments and loans. Yet, they do not hold a banking license. These are regulated by the RBI or the Reserve Bank of India. They differ from traditional banks because they do not accept deposits. Despite this, they still play a vital role in the country’s financial system by filling the credit needs of individuals and small businesses that do not have access to formal banking. Those are physical and legal persons who usually reside in rural areas.

In the past few years, India has seen vast credit growth momentum. That has been driven by continuous traction in the SME and retail segments. Credit card, auto, and home loans have continued to grow, and corporate ones are gradually recovering as the entire corporate segment is picking up steam. Most analysts are confident about NBFC expansion, as they expect liquidity to be sufficient for this segment to keep outperforming in 2024 and going forward. Such a conclusion was reached despite incremental earnings for the 2023 financial year primarily credited to the BFSI sector.

Agriculture – Loser

Those with even some knowledge of agriculture likely know that India is a massive producer of jute and pulses, and it ranks as the planet’s second most sizeable producer of wheat, sugarcane, vegetables, cotton, fruit, and groundnut. It rates high when it comes to producing plantation crops and spices. On top of this, it is one of the largest milk producers, has substantial herds of cattle and buffaloes, and an ever-expanding poultry industry.

In 2023, agriculture’s share in India’s GDP has again fallen. Going by the available data, this sector’s share in the country’s Gross Value Added dropped by 15% in 2023, down 35% compared to the 1991 figure. That has occurred due to the rapid growth of the service and industrial sectors. The government has adopted and is looking to implement new development programs to boost this sphere, but expectations are that it will see a further decline in 2024.

Autos and Ancillaries – Winner

We are sure that it will come as a massive surprise to many, but per a statement from India’s Minister for Heavy Industries, Mahendra Nath Pandey, the country’s automotive industry will mainly contribute to India’s expansion as the world’s third-largest economy. It currently ranks fifth, but with a 35% contribution rate to the GPT, the Indian automotive industry will have played its part in the country reaching this milestone. India’s major automobile manufacturing companies are Tata Motors, Ashok Leyland, Maruti Suzuki, Hyundai Motor India, Mahindra & Mahindra, Eicher Motors, Royal Enfield, Force Motors, Tractors and Farm Equipment Limited, Sonalika Tractors, Hindustan Motors, Hradyesh, Kerala Automobiles Limited, and ICML.

iGaming – Loser

iGaming stands for interactive gaming. That entails chance-based games with monetary rewards on the line. That has been possible for Indians at offshore sites boasting robust new user promos like Las Atlantis. These gaming sites were available even before Goa, Daman, and Sikkim regulated the online market in 2022.

Globally, the online gaming market is projected to reach an annual revenue total of $107 billion in 2024. Unfortunately, the Indian sector has gotten hit with a sizeable hurdle in a 28% tax set to wreak havoc on the Indian gaming landscape.

Manufacturing – Winner

Amidst an impressive investment surge, the Indian manufacturing sector is experiencing a revolution. Colliers now estimate that this market will hit $1 trillion in 2025, mainly owed primarily on account of billions in foreign investments. Gujarat is India’s emerging manufacturing powerhouse, followed by Maharashtra and Tamil Nadu. Per various expert opinions, policies such as Make in India and the production-linked incentive scheme are the prime reasons the country has seen a substantial rise in global investors and incentivized domestic manufacturing.

Textiles & Garments – Loser

As noted in released government data, in 2022, between April and November, readymade garments saw a 15% decline. The dip is credited to evolving market dynamics, changing global economic conditions, and shifting consumer preferences. Some also believe this is because of the ongoing Isreal-Gaza war, which has lowered Middle East demand. That is a bit worrying because the textile sector is India’s second-largest employer behind agriculture, with forty-five million employed by this industry, and it supports one hundred million in allied spheres.