Economic analysis:

Energy- oil&gas:

Introduction

The oil and gas sector is among the eight core industries in India and plays a major
role in influencing decision making for all the other important sections of the
economy.
India’s economic growth is closely related to energy demand; therefore the need for
oil and gas is projected to grow more, thereby making the sector quite conducive for
investment.
The Government of India has adopted several policies to fulfil the increasing
demand. The government has allowed 100 per cent Foreign Direct Investment (FDI)
in many segments of the sector, including natural gas, petroleum products, and
refineries, among others.

Market Size
India is expected to be one of the largest contributors to non-OECD petroleum
consumption growth globally. Oil imports rose sharply to US$ 87.37 billion in 2017-
18 from US$ 70.72 billion in 2016-17. India retained its spot as the third largest
consumer of oil in the world in 2017 with consumption of 4.69 mbpd of oil in 2017,
compared to 4.56 mbpd in 2016.
India was the fourth-largest Liquefied Natural Gas (LNG) importer in 2017 after
Japan, South Korea and China. LNG imports increased to 26.11 bcm in 2017-18
from 24.48 bcm in 2016-17.
Gas pipeline infrastructure in the country stood at 16,226 km at the beginning of
February 2019.

Investments
According to data released by the Department of Industrial Policy and Promotion
(DIPP), the petroleum and natural gas sector attracted FDI worth US$ 7.00 billion
between April 2000 and December 2018.
Following are some of the major investments and developments in the oil and gas
sector:

 In September 2018, the Government of Gujarat selected Energy Infrastructure Limited (EIL), a
subsidiary of the Netherlands-based Energy Infrastructure Butano (Asia) BV, to set up a Liquefied
Petroleum Gas (LPG) terminal at Okha with an investment of Rs 700 crore (US$ 104.42 million).
 Foreign investors will have opportunities to invest in projects worth US$ 300 billion in India, as the
country looks to cut reliance on oil imports by 10 per cent by 2022, according to Mr Dharmendra
Pradhan, Minister of Petroleum and Natural Gas, Government of India.
 Oil and Natural Gas Corporation (ONGC) is going to invest Rs 17,615 crore (US$ 2.73 billion) on drilling
oil and gas wells in 2018-19.
 As of March 2019, Brookfield is going to acquire Reliance Gas Transportation Infrastructure, now known
as East West Pipeline (EWPL) for Rs 13,000 crore (US$ 1.80 billion).
Government Initiatives
Some of the major initiatives taken by the Government of India to promote oil and
gas sector are:

 The Government of India is planning to set up around 5,000 compressed bio gas (CBG) plants by 2023.
 Government of India is planning to invest Rs 70,000 crore (US$ 9.97 billion) to expand the gas pipeline
network across the country.
 In September 2018, Government of India approved fiscal incentives to attract investments and
technology to improve recovery from oil fields which is expected to lead to hydrocarbon production worth
Rs 50 lakh crore (US$ 745.82 billion) in the next twenty years.
 State-run oil firms are planning investments worth Rs 723 crore (US$ 111.30 million) in Uttar Pradesh to
improve the liquefied petroleum gas (LPG) infrastructure in a bid to promote clean energy and generate
employment, according to Mr Dharmendra Pradhan, Minister of Petroleum and Natural Gas,
Government of India.
 A gas exchange is planned in order to bring market-driven pricing in the energy market of India and the
proposal for the same is ready to be taken to the Union Cabinet, according to Mr Dharmendra Pradhan,
Minister of Petroleum and Natural Gas, Government of India.
 The Oil Ministry plans to set up bio-CNG (compressed natural gas) plants and allied infrastructure at a
cost of Rs 7,000 crore (US$ 1.10 billion) to promote the use of clean fuel.

Consumer durables:

Indian consumer durables market is broadly segregated into urban and rural markets, and is attracting
marketers from across the world.

The growth in India’s consumer market would be primarily driven by a favorable

population composition and increasing disposable incomes.
Per capita GDP of India is expected to reach US$ 3,273.85 in 2023 from US$ 1,983
in 2012. The maximum consumer spending is likely to occur in food, housing,
consumer durables, and transport and communication sectors.

Consumer durables index under the Index of Industrial Production (IIP) has grown 7.5 per cent year-on-year
between Apr-Dec 2018.
Investments

According to the data released by the Department of Industrial Policy and Promotion
(DIPP), the electronics sector attracted foreign direct investment (FDI) worth US$
2.27 billion between April 2000 and December 2018.

The S&P BSE Consumer Durables Index has grown at 20 per cent CAGR between
2010-17.

Source:IBEF

Financial services:
India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of
existing financial services firms and new entities entering the market. The sector comprises
commercial banks, insurance companies, non-banking financial companies, co-operatives, pension
funds, mutual funds and other smaller financial entities.

Market Size:

However, the financial sector in India is predominantly a banking sector with commercial banks accounting for
more than 64 per cent of the total assets held by the financial system. Market Size

The Mutual Fund (MF) industry in India has seen rapid growth in Assets Under Management
(AUM). Total AUM of the industry stood at Rs 23.16 trillion (US$ 321.00 billion) as of February
2019. At the same time the number of Mutual fund (MF) equity portfolios reached a high of
74.6 million as of June 2018.

Another crucial component of India’s financial industry is the insurance industry. The
insurance industry has been expanding at a fast pace. The total first year premium of life
insurance companies reached Rs 159,004 crore (US$ 22.04 billion) as of Jan 2019.
Along with the secondary market, the market for Initial Public Offers (IPOs) has also
witnessed rapid expansion. The total amount of Initial Public Offerings (IPO) stood at Rs
14,032 crore (US$ 1.94 billion) as of Feb 2019.

Furthermore, India’s leading bourse Bombay Stock Exchange (BSE) will set up a joint venture
with Ebix Inc to build a robust insurance distribution network in the country through a new
distribution exchange platform.

Investments/Developments

 Investments by Foreign Portfolio Investors (FPIs) in Indian capital markets have reached Rs 5,400 crore
(US$ 748.44 million) up to December 30, 2018.
 The private equity and venture capital (PE/VC) investments reached US$ 33.1 billion in 2018.

Government Initiatives

 In December, 2018, Securities and Exchange Board of India (SEBI) proposed direct overseas listing of
Indian companies and other regulatory changes. It has provided companies with a broader investor
base, better valuation, increased awareness, analyst coverage and visibility.
 Bombay Stock Exchange (BSE) introduced weekly futures and options contracts on Sensex 50 index
from October 26, 2018.
 The Government of India launched India Post Payments Bank (IPPB), to provide every district with one
branch which will help increase rural penetration. As of August 2018, two branches out of 650 branches
are already operational.

Road Ahead

 India is today one of the most vibrant global economies, on the back of robust banking and insurance
sectors. The relaxation of foreign investment rules has received a positive response from the insurance
sector, with many companies announcing plans to increase their stakes in joint ventures with Indian
companies. Over the coming quarters there could be a series of joint venture deals between global
insurance giants and local players.
 The Association of Mutual Funds in India (AMFI) is targeting nearly five fold growth in assets under
management (AUM) to Rs 95 lakh crore (US$ 1.47 trillion) and a more than three times growth in
investor accounts to 130 million by 2025.

 India's mobile wallet industry is estimated to grow at a Compound Annual Growth Rate (CAGR) of 150
per cent to reach US$ 4.4 billion by 2022 while mobile wallet transactions to touch Rs 32 trillion (USD $
492.6 billion) by 2022.

Exchange Rate Used: INR 1 = US$ 0.0139 as of Q3 FY19

Industry analysis:

Porter 5 forces model:

Indian industry analysis of oil&gas

life cycle of oil&gas:

 industry analysis of Consumer durables:

Life cycle of consumer durables:

Indian industry analysis of financial services:

Life cycle of financial services