Independence Day 2024: Uncovering long-term growth opportunities in Indian investments

This Independence Day 2024 marks India’s 78th year as an independent nation, after earning a hard-won victory against the English forces in 1947. As we celebrate this momentous occasion by unfurling the tricolour, and proudly voicing the National Anthem, we must also consider how far the country has come, in its post-independence journey.

For the first time since it was colonised, India managed to topple the UK from its position as the fifth largest global economy, claiming the vaunted spot for itself and now, the domestic economy is poised to become the third largest, on a global scale, before the close of the ongoing decade. In this winsome scenario, investors, both domestic and foreign, have a tremendous opportunity to capitalise on the growing economic might of India.

Opportunities in consumer goods and retail investment

India's retail and consumer goods sectors stand at the heart of its burgeoning economy, driven by an expanding middle class and shifting consumer behaviours. Currently, personal consumption expenditure accounts for nearly two-thirds of India's GDP, highlighting the sector's critical role in economic growth even as the retail market, already the fourth largest globally, is poised for further expansion.

During FY 2022-23, leading retailers and quick-service restaurants added approximately 4,700 new stores, reflecting a robust demand for lifestyle and discretionary products. This surge is supported by an average per capita income exceeding USD 2,000, projected to surpass USD 12,000 by 2047.

The rise of digital platforms, coupled with the proliferation of last-mile logistics, has revolutionised retail access, especially in lower-tier cities where online shopping is thriving. The retail landscape now includes a diverse mix of global e-commerce giants, single-brand websites, multi-retail apps, and social media sellers. This digital shift has spurred premiumisation and increased focus on health and sustainability, as Indian consumers make more aspirational choices.

The market's potential is underscored by Deloitte's forecast, which predicts India's online retail market will soar to USD 325 billion by 2030 from USD 70 billion in 2022, while the organised retail market will grow to USD 230 billion from USD 110 billion. The offline retail market is also set to expand significantly, reaching USD 1,605 billion by 2030.

As India's middle class is expected to grow from 30% to 50% of the population by 2030, the opportunities for consumer goods and retail investment are substantial, driven by a young, urbanising population with rising disposable incomes. Accordingly, on this Independence Day, you can consider capitalising on the opportunity inherent in the domestic consumer goods and retail segments, by picking stocks aligned with your personal investor profile.

Investing in India's urban development

India's real estate market is also undergoing a transformative phase, poised for significant growth in the ongoing financial year 2024-25. With the economy expected to expand by 7-8%, the demand for residential and commercial properties is set to rise sharply. The Reserve Bank of India’s anticipated easing of interest rates is likely to make home loans more affordable, thus boosting residential property investments. This economic shift, coupled with rapid urbanisation and government support for affordable housing and infrastructure, creates a robust environment for real estate development, and, in tandem, effective investment in the country’s urban development.

The residential market is projected to grow by 10-12%, driven by an increasing preference for smaller, cost-effective units among first-time buyers. In parallel, the commercial real estate sector is expected to rebound, particularly in office spaces, reflecting renewed demand as businesses expand. The rise of Real Estate Investment Trusts (REITs), with assets projected to reach ₹18,000 crore by FY 2025, highlights the sector's appeal to institutional investors.

The burgeoning urban population and ongoing government initiatives, such as tax incentives and simplified approval processes, further support the sector's expansion even as the integration of technology is enhancing operational efficiency and customer experience in the real estate sector.

On this Independence Day, the winsome convergence of economic growth, favourable financial conditions, and supportive policies position India's consumer goods, retail and real estate sectors as dynamic investment opportunities, promising substantial returns and growth prospects for investors willing to bet on the country’s golden prospects.

Hemant Lakhotiya, Executive Director, 360 ONE Wealth