The Indian market for video surveillance equipment exceeded $300 million for the first time in 2013 and is forecast to grow at an increasing rate over the next five years. This is according to a recently published report by IHS Inc. (NYSE: IHS) entitled “ The Indian Market for CCTV and Video Surveillance Equipment ”.
Much of the market growth is forecast to come from increased government spending. In June 2014, a new government was elected in India. It won enough seats to govern without the support of other parties. Such independence is expected to help the new government push through the difficult economic reforms that are necessary for India to return to higher rates of GDP growth. It is also expected to help push through spending on public projects which have previously struggled to gain final approval. Demand for video surveillance equipment is therefore forecast to grow quickly in such end-user sectors as city surveillance, traffic monitoring, railways, and education.
Big plans have already been announced in each of these end-user sectors but nothing should be taken for granted. One complexity of the Indian market is that authorities often announce intentions to install video surveillance equipment before firm plans are in place. It can therefore take a long time from these announcements being made to tenders being issued and funding becoming available. Sometimes these projects never actually come to fruition as priorities change or funding is never approved. Sometimes the conditions of supply are too onerous for suppliers to bid (e.g. credit terms, warranty terms, maintenance terms). One example of a large project that has been delayed many times is a major city surveillance project in Mumbai that was planned to be started years ago and has been put out to tender four different times.
This is not the only challenge vendors face when doing business in India. The market is very price sensitive and a highly fragmented supply base means that customers are able to choose from a wide selection of alternative products. Nevertheless, the Indian market offers excellent growth opportunities for vendors with the right strategy. The market is forecast to almost double in size between 2013 and 2018. Furthermore, it is more open to foreign vendors than some other regional markets. Many of the big international brands already have a local presence in India but they are likely to expand and be joined by other international brands as the market continues to grow.