India Build and Interiors

TITLE title
Building and Interiors

in India: Creating
a Global Powerhouse
A MARKET INSIGHTS REPORT

BY ITE BUILD & INTERIORS
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1 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors
Contents
Section 1 – Introduction to India............................................ 3
Section 1 – Introduction to India.................................. 3
Section 1.1 – Population............................................... 4
Section 1.2 – GDP & Economy....................................... 6
Section 1.3 – Sources of Growth................................... 8
Section 1.4 – Foreign Direct Investment....................... 10
Section 1.5 – Imports................................................... 11
Section 2 – India’s Interior Finishing and Materials Market.... 12

Section 2.1 – Sanitary Ware and Bathroom Fittings...... 12
Section 2.2 – Modular Kitchens.................................... 14
Section 2.3 – Furniture................................................. 15
Section 2.4 – Ceramic Tiles........................................... 16
Section 2.5 – Doors & Windows.................................... 18
Section 2.6 – LED Lighting............................................ 19
Section 3 – India’s Building Industry Sector by Sector............ 21

Section 3.1 – Building Industry Overview...................... 21
Section 3.2 – Residential Construction......................... 22
Section 3.3 – Office & Commercial Construction.......... 25
Section 3.4 – Retail Construction................................. 26
Section 3.5 – Industrial Construction........................... 27
Section 3.6 – FDI in Construction and Infrastructure.... 28
Section 4 – Major Projects..................................................... 30

Section 4.1 – Housing for All by 2020............................ 30
Section 4.2 – Smart Cities Mission............................... 32
Section 5 – Doing business in India........................................ 35

Section 5.1 – Ease of Doing Business........................... 35
Section 5.2 – Key Business Stats................................. 36
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Section 6 – Challenges & Opportunities................................. 38
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Section 1 –
Introduction to India
India is on the cusp of becoming one of the world’s A country’s economic growth and societal changes
major economic powers. Already enjoying huge GDP, often go hand in hand, and India is no exception.
solid growth and a rising population, the conditions A changing landscape, partly fuelled by a rapidly
are right for the country to forge a path to global increasing consumer class, is driving housing
success in the 21st century. demand, infrastructure spending and demand for
high-end materials through the roof.
The construction industry, alongside the interiors Forecasts remain strong for India. In this report, we
and finishings sector, is playing a huge role in go into depth regarding South Asia’s most exciting
securing a brighter future for India. Spurred on by economy, the construction industry as a whole, and the
massive government investment, private firms and landscape for interior finishings and materials. There
FDI, construction in India is set to remain vital to the are plenty of opportunities for foreign companies to
country’s progress. succeed in India – read on to discover them.
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SECTION 1 - INTRODUCTION TO INDIA
Section 1.1 – Population

India’s Key Population Stats as of February 2016
Total population of 1,322,246,6681

Second largest population in the world2
Projected population growth of 1.21% a year (2016 growth figures)3
Median age of 27.34
32% of Indians live in urban areas5
Population density of 436 people per square kilometre6
29 cities and urban areas with a population over 1.5 million7
India’s huge population is one of the principle drivers of growth in the building sector. The UN’s 2015 revised
World Population Prospects report indicated that India’s population will reach 1,527,658,000 by 2030,
outstripping China to become the world’s most populated country.
When compared with the world’s other major economies, we can see the extent of India’s population forecasts:
India Population Growth 2015-2050 (UN World Prospects Report, 2015)
Country 2015 Population 2030 Population 2050 Population

China 1,376,048,000 1,415,545,000 1,348,056,000
Germany 80,689,000 79,294,000 74,513,000
India 1,311,051,000 1,527,658,000 1,705,333,000
Russia 143,457,000 136,652,000 128,599,000
United Kingdom 64,716,000 70,113,000 75,361,000
United States 321,774,000 355,765,000 388,865,000
India is a young country – 0-14 28.09%

the median age of its
people stands at 27.3 years 15-24 18.06%
old. When broken down into
25-54 40.74%
percentages, we can see
the following divisions in 55-64 7.16%
age amongst the population
of India: 65+ 5.95%8
1
http://www.worldometers.info/world-population/india-population/
2
3
4
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
http://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS
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6
http://data.worldbank.org/indicator/EN.POP.DNST
7
http://www.censusindia.gov.in/2011-prov-results/paper2/data_files/India2/Table_3_PR_UA_Citiees_1Lakh_and_Above.pdf
8
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html ITEOil&Gas
SECTION 1 - INTRODUCTION TO INDIA Population
When a country expands as quickly as India is A rise in purchasing power is very likely to increase
projected to, its consumer class will grow with it. desire and consumption of foreign luxury goods and
materials. Knight Frank suggests that there has been
According to Ernst & Young, quoted in an article by a greater number of high wealth individuals in recent
Forbes, India’s consumer class population stands years. As such, the research firm predicts that, rather
at 50 million or around 5% of the population. than relying on local suppliers for goods, services
This number is expected to quadruple to 200 million and materials, the Indian new rich will rely more on
members in 2020. 2030 will see the middle class more foreign imports to attain their luxury goods. 12
than double again as Ernst & Young predicts India will
have 475 million members of the middle class. 9 McKinsey suggests that India’s urban population will
grow in the coming years. According to the research
With middle class growth comes an increase firm, India’s urban population totalled 320 million
in spending power. In turn, this drives the demand in 2008 but this is expected to nearly double to
for mid-to-high quality housing upwards alongside 590 million in 2030.13 This, alongside the burgeoning
a greater need for improved infrastructure projects consumer class, will spur on the construction sector
and other commercial amenities. as a mixture of residential, retail and commercial
buildings will be required.
India is home to 198,000 dollar millionaires10 and
the third largest number of billionaires in the world.
97 individuals are worth at least $1 billion.11
9
http://www.forbes.com/sites/edfuller/2015/09/10/india-asias-next-economic-dynamo/#48f078e43ae6
10
http://www.business-standard.com/article/economy-policy/india-has-198-000-dollar-millionaires-study-115091600026_1.html
11 ITEBeauty
http://blogs.wsj.com/indiarealtime/2015/02/04/india-has-worlds-third-largest-number-of-billionaires/
12
http://www.knightfrank.com/wealthreport/2015/luxury-spending/big-spender
13
http://www.mckinsey.com/insights/urbanization/urban_awakening_in_india
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Section 1.2 – GDP & Economy

India Key GDP GDP Nominal – $2.183 trillion
Stats as GDP PPP – $8.027 trillion
GDP Nominal Rank – 7th
of February 2016
GDP PPP Rank – 3rd
GDP per capita – $1,570 (2014)14
India is the dominant economic power in South Currently, India’s GDP stands at over $2 trillion as of
Asia. In fact, the World Bank has suggested that January 2016, having grown steadily over the past
India’s growth is why South Asia is now the fastest two years. GDP based on purchasing-power-parity
growing region in the world. Due to India’s massive (PPP) has also increased to over $8 trillion as
GDP contribution, the World Bank predicts regional of 2016. The table below shows India’s GDP and
growth will increase steadily from 7% to 7.6% increases over the last two years.
annually by 2017.15
GDP growth in India 2014-2016 (IMF)16
GDP Descriptor 2014 2015 2016 (IMF estimate)

GDP - Actual $2,051,228,000,000 $2,182,577,000,000 $2,384,726,000,000
GDP – PPP $7,411,093,000,000 $8,027,031,000,000 $8,727,955,000,000
The Economic Times reported that India’s GDP grew reach or succeed 8% growth in the 2016 fiscal year. 18
by 7.5% in the last quarter of 2014 with growth hitting Accordingly, PricewaterhouseCoopers (PWC) predicts
7.3% for 2015 financial year.17 Minister of Finance that India will remain one of the world’s dominant
Arun Jaitley is confident that the country could economies in terms of GDP-PPP by 2050:
PWC Predications for Top Country Rankings by GDP-PPP19
PPP PPP PPP GDP PPP GDP PPP GDP PPP

Rank Rank Rank Projected 2014 ($US Projected 2030 Projected 2030
Country 2014 2030 2050 Billion) ($US Billion) ($US Billion)
China 1 1 1 17.632 36.112 61.079
US 2 2 3 17.416 25.451 42.205
India 3 3 2 7.411 17.138 41.384
14
http://data.worldbank.org/indicator/NY.GNP.PCAP.CD/countries
15
http://www.worldbank.org/en/news/press-release/2015/04/13/south-asia-cheap-oil-reform-energy-pricing
16
http://www.imf.org/external/pubs/ft/weo/2015/02/weodata/weorept.aspx?pr.x=71&pr.y=10&sy=2014&ey=2016&scsm=1&ssd=1&sort=cou
ntry&ds=.&br=1&c=534&s=NGDPD%2CNGDPDPC%2CPPPGDP%2CPPPPC&grp=0&a=#cs2
17 ITEBeauty
http://economictimes.indiatimes.com/news/economy/indicators/q4-gdp-growth-at-7-5-economy-grows-at-7-3-in-fy15/
articleshow/47471403.cms?from=mdr
http://www.thenational.ae/business/economy/indian-economic-growth-gathers-steam
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18
19
https://www.pwc.com/gx/en/issues/the-economy/assets/world-in-2050-february-2015.pdf

India is a member of the BRICS economic community of emerging countries. Using the OECD’s long term
GDP growth prediction tool, we can see the following contrasts between India and the other BRICS nations
in terms of growth:20
GDP 2016 - OECD Estimate GDP 2030 – OECD Estimate GDP 2050 – OECD Estimate
Country ($US Million)* ($US Million)* ($US Million)*
Brazil 2,237,617 3,222,358 5,182,059
China 14,217,032 26,307,248 45,730,397
India 5,039,874 11,162,212 27,817,822
Russia 2,656,459 4,001,090 4,938,271
South Africa 575,267 1,121,202 2,013,204
*All figures are accurate of the OECD’s Long Term GDP growth tool but may differ from the predictions of other financial bodies and institutions.
According to Make in India, an Indian government website promoting business in the country, the construction
industry accounts for 8% of India’s total GDP. The government has pledged to invest $1 trillion in infrastructure
and construction projects between 2012 and 2017, with $650 billion of this huge sum allocated for urban
infrastructure projects. 21
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20
https://data.oecd.org/gdp/gross-domestic-product-gdp.htm#indicator-chart
21
http://www.makeinindia.com/sector/construction
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Section 1.3 – Sources of Growth

Five key areas of India’s economy are driving economic growth, according to Macquarie Research’s 2014 report
“India Strategy Outlook 2015: From Promise to Performance”22. These are:
Infrastructure – As outlined in section 1.2, and chemicals.26 However, Modi, with his “Make in
Infrastructure is a huge factor in driving economic India” initiative is hoping to not just improve domestic
growth. KPMG has described the government’s 2015- production by Indian firms, but is hoping to encourage
2016 budget as “kick-start for infrastructure” with the FDI in the manufacturing sector too.
promise of significant investment.23
“Opening up FDI in sectors such as Defence has given
An injection of $1.6 billion in railways and $2.25 credence to the government’s ‘Make in India’ pitch.
billion to roads is just a small part of the $1 trillion Growth in the manufacturing sector would also help
investment planned by the government from 2012- increase India’s share of world exports (currently
2017. A wealth of other projects, such as airport less than 2% as of 2013),” the Macquarie report
expansions, ports, schools and improved energy grids suggests.27 The program was launched in September
is all part of the Modi administration’s push to make 2014. Once live, it was reported that FDI levels in India
India a truly competitive country worldwide.24 reached $32.87 billion during the period October
2014-September 2015.28
Interest Rates – India’s interest rates are being held
at a rate of 6.75%, in order to keep growth stable. Indirect Tax Reform – Industry was waiting for the
A statement from the Reserve Bank of India’s (RIB) passing of the Goods and Services Tax (GST) Bill,
governor Raghuram Rajan revealed its decision to which Macquarie Research is hoping will be drafted
curb interest rates as part of a strategy to ensure into law by 2017’s financial year. Essentially, this tax
that India’s impressive financial growth has strong would replace India’s previous archaic, overlapping
foundations.25 system with a nationwide flat rate on goods and
services.29
Make in India – Since coming to power in May
2014, Prime Minister Modi has made overtures As well as improving taxation revenues, it is predicted
towards promoting his country’s potentially huge that the GST could add an additional growth of 0.9-
manufacturing base. India is already a large producer 1.7% in the short term once rolled out. A long term
of many heavy goods such as machinery, cars and projection suggests that GDP growth could even be
steel alongside other items such as textiles, clothes improved by another 1-2%.30
22
http://articles.economictimes.indiatimes.com/2014-12-04/news/56723439_1_rakesh-arora-growth-rate-ncaer
23
https://assets.kpmg.com/content/dam/kpmg/pdf/2015/04/foresight-28.pdf
24
https://assets.kpmg.com/content/dam/kpmg/pdf/2015/04/foresight-28.pdf
25
http://www.khaleejtimes.com/business/banking-finance/indias-central-bank-holds-interest-rates-at-675
26
http://qz.com/401344/when-modi-called-on-the-world-to-make-in-india-this-is-the-manufacturing-future-he-envisioned/
27
28
http://www.dnaindia.com/money/report-pm-modi-govt-s-make-in-india-has-made-tremendous-impact-on-investments-2156364
29 ITEBeauty
http://www.thehindu.com/business/Industry/all-you-need-to-know-about-goods-and-services-tax/article7929788.ece
30
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Internet – Macquarie suggests that a growing number this, India is projected to be the second largest
of mid to high income families in India will lead to a mobile broadband market in 2016 with 367 million
boost in internet access. As such, e-commerce levels connections. 32
will rise. This will likely see further infrastructure
This internet growth will benefit the commercial
improvements too as e-commerce retailers will
sector too – a study by the Boston Consulting
require warehousing facilities as well as easy
Group and Retailers Association of India suggests
distribution networks.31
that by 2020 the Indian e-commerce market could
According to the World Economic Forum, India reach a value of $50 billion.33 Not only will this fuel
has a wireless internet subscriber base of GDP growth, it will also give building and interiors
873 million people, and smartphone users are companies another way of selling their products to
likely to increase to 382 million by 2016. Alongside the Indian market.
31
32
33
http://www.weforum.org/agenda/2014/01/three-innovations-driving-indias-growth/
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http://economictimes.indiatimes.com/industry/services/retail/e-commerce-market-may-reach-45-50-billion-by-2020-study/
articleshow/50929601.cms
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Section 1.4 – Foreign Direct Investment

Foreign direct investment, or FDI, is a serious driver of The World Bank has reported that FDI made up 1.7%
India’s growth story. The United Nations Conference of India’s total GDP in 2014.35 But with a government
on Trade and Development (UNCTD) reported that strongly backing easier FDI, it is likely even more
FDI increased by 75% in 2015, reaching $59 billion.34 foreign firms will begin to invest in India in the near
Legislative changes could see this figure increase future. This, alongside a growing number of mid-to-
dramatically. high income citizens, should therefore, make India
a more exciting prospect for foreign companies
In 2015, India relaxed FDI regulations across
looking to gain a foothold in a robust, emerging
a number of sectors, including defence, civil aviation,
economy.
media and, crucially for interior finishing companies,
construction – this report covers FDI rule relaxations
in construction in more detail in section 3.6.
The main sources of FDI into India Country FDI Equity Inflows 2015 Value
are given below: (source: India
Mauritius $9.03 billion
Brand Equity Foundation)36
Singapore $6.74 billion
The Netherlands $3.43 billion
Japan $2.08 billion
United States $1.82 billion
(The reason for Mauritius’ huge levels of FDI lies with Rather, investments are stemming from Indians
the Double Taxation Avoidance Treaty signed between routing cash through Mauritius in order to avoid
the island and India in 1983. However, India is looking taxes. This practice is known as “round tripping”.37)
to change the terms of this treaty as the country is
The Make in India campaign is also likely to
claiming that investments from Mauritius do not
encourage further levels of FDI in the coming years.
constitute full foreign investments.
A conference on the project held in Mumbai in March
2016 saw foreign firms pledging to invest $222 billion
in India showing other avenues of FDI.38
34
http://www.firstpost.com/business/fdi-into-india-up-75-in-2015-after-govt-steps-to-boost-investment-says-un-body-2592880.html
35
36
http://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS
http://www.ibef.org/economy/foreign-direct-investment.aspx
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37
http://www.reuters.com/article/us-mauritius-economy-india-idUSKCN0S11EW20151007
38 ITEOil&Gas
http://globalriskinsights.com/2016/03/modis-make-in-india-campaign-a-step-in-the-right-direction/

SECTION 1 - INTRODUCTION TO INDIA Key Business Stats
Section 1.5 – Imports

Top Ten Indian Import Partners (2015)39 Top Ten Indian Imports (2015)40
Country Imports Value Product/Commodity Total Value

United States $40.4 billion Mineral fuels, mineral oceans and products of their distillation; $156 billion
bituminous substances; mineral waxes
United Arab Emirates $30.3 billion
Natural or cultured pearls, precious or semiprecious stones $62 billion
Hong Kong $12.2 billion
Nuclear reactors, boilers, machinery and mechanical appliances $32 billion
China $9.5 billion
Electrical machinery, equipment and parts $33 billion
United Kingdom $8.9 billion
Organic chemicals $18 billion
Singapore $7.8 billion
Plastic $12 billion
Germany $7 billion
Iron & steel $12 billion
Saudi Arabia $7 billion
Animal or vegetable fats, oils & their cleavage products;
Sri Lanka $5.5 billion pre edible fats; animal or vegetable waxes $11 billion
Bangladesh $5.5 billion Miscellaneous goods $7 billion
Ships, boats, and floating structures $5 billion
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http://www.worldstopexports.com/indias-top-import-partners/
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http://www.infodriveindia.com/export-import/trade-statistics/top-products.aspx#top-import-products
40

Section 2 –
India’s Interior Finishing
and Materials Market
With demand for housing, both affordable and luxury, on the rise, India’s interior finishing and materials market is
flourishing. Previous market valuations put the industry’s size at $4.2 billion with a CAGR of between 15-20%. Roughly
10% of the total market value relates to the premium market, i.e. high-end finishing and materials, which corresponds
to a burgeoning consumer class.41
There are a number of key areas Sanitary ware and bathroom fittings
where Indian consumers are Modular kitchens
driving demand and growth.
Furniture
These include:
Ceramic tiles
Doors and windows
LED lighting
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41
http://www.s-ge.com/sites/default/files/private_files/BBK_building%20interior%20sectors%20india%20sept%202014_3.pdf
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SECTION 2 – INDIA’S INTERIOR FINISHING AND MATERIALS MARKET
Section 2.1 – Sanitary Ware and Bathroom Fittings

The Indian sanitary ware market is expected to enjoy The twin aspects of sanitary ware and bathroom
substantial growth over the coming years. A range of fittings combined held a market value of around
government initiatives and educational programs on the $427 million in 201443. When split, each segment
importance of safe sanitation, plus enhanced spending contributed the following towards the total market
power, will keep pushing the market forward. 42 valuation:
India Sanitary Ware and Bathroom Fittings Market by Value (2014) 44
Market Segment Contribution of Market Value CAGR Prediction (2012-2018)

Sanitary ware $124 million 12.5%
Bathroom fittings $303 million 15%
Previously, domestic manufacturers controlled the Kohler

vast majority of the market in this sector. However,
a growing taste for high-end, imported products has
Häfele
resulted in an increased market presence by a large Grohe
number of foreign companies, chief among them: Roca 45
http://www.gima.de/media/1/1/4798/overview_of_india_s_bathroom_kitchen_industry.pdf
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43
44
45
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As well as being an important market for companies Quality bathroom products are in demand across the
to sell their products, India is emerging as a sanitary building sector, including hotels, office blocks and
ware manufacturing hub. India accounts for 8% of commercial buildings, schools, hospitals and other
global manufacturing in this sector, and is the second public amenities. This means there is a huge market
largest manufacturer in South-East Asia. This offers for bathroom fittings and sanitary ware in a country
further avenues for companies looking to expand into as focused on construction as India currently is.
the Indian market. An abundance of raw materials
and low labour costs make India very attractive in
terms of creating a manufacturing base.46
Emerging trends in this market segment include:
Complete bathroom solutions – Indian Increasing presence of foreign players –

consumers are looking for complete bathroom As mentioned above, foreign firms are enjoying
solutions. Manufacturers are now offering one stop greater penetration in India. Many firms have
shops, which combine fittings, sanitary ware and enjoyed collaborative success by tying up with local
accessories, and have begun creating “Experience companies for ease of market insertion.
Centres” in-store for customers’ convenience.
Rise in premium products – Purchasing power is on
Water conservation technology – As India’s the rise, and with it a greater desire to enjoy quality
population becomes more eco-minded, the demand sanitary ware and bathroom finishings. Hi-tech
for greener bathroom options – especially in products and upscale brands are gaining prominence
the conservation of water – has increased. High in India, with the premium sector contributing 10% to
efficiency flushing systems, infrared controls and the whole sector’s value.47
sensor taps and showers are gaining popularity.
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47
http://www.gima.de/media/1/1/4798/overview_of_india_s_bathroom_kitchen_industry.pdf ITEOil&Gas
Section 2.2 – Modular Kitchens

Modular kitchens is one of the fastest growing Since 2012, when the market was valued at
sections of India’s interiors industry. Retail India pproximately $343 million, modular kitchens have
suggested that the desire for modular kitchens been enjoying exceptionally fast growth rates of 30%
covers all buying groups in India, presenting an annually. What’s more, imports account for 30% of the
excellent opportunity for foreign firms. market, with Italy and Germany heavily involved:
Indian Modular Country Import Share Cement Sales (tons)

Kitchen Import Source
Italy 55%
by Country (2014)48
Germany 25%
Other 20%
The retail sector is the main source of sales in terms The demand for a better quality of kitchen is being
of modular units in India. Some 73% of all finishings driven by one key trend – growth in purchasing
sold in the country come from retail, whereas project power. The upper-middle class and above previously
sales constitute the remaining 27%. dominated the market, but many more Indians now
want to enjoy modular kitchens in their homes.49
European design – European-style modular fittings of features such as handle-less doors, soft closing
are of keen interest to Indian consumers. Kitchens drawers, and openable glass doors, alongside rust
designed in this style are seen to be clutter-free, proof and grease resistant counters and in-built
trendy and modern with colour palettes more subtle appliances.
than traditional Indian kitchens.
New players – Foreign companies are finding it
Convenience – Convenience is king for Indian easier to enter the market, particularly those from
kitchen owners and designers. Incorporated lighting, Austria, Germany, Italy and the Middle East. Many of
soft closing doors and high end accessories, those engaged in modular kitchens are partnering
promoting ease of use, are of large interest to the with domestic companies due to the mutual benefits.
Indian market. Domestic companies get to enjoy the technological
expertise, design and quality of their international
Trendy features – Pastel and wooden shades are partners whereas foreign firms will have greater
desirable, in terms of décor, alongside a number access for Indian distribution.50
48
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http://retail.franchiseindia.com/magazine/2015/february/Modular-Kitchen-Cooking-up-a-growth-story.m93-1-3/
49
http://retail.franchiseindia.com/magazine/2015/february/Modular-Kitchen-Cooking-up-a-growth-story.m93-1-3/
50
Section 2.3 – Furniture

India is home to the world’s 14th biggest furniture Demand for furniture is coming from the residential
market. According to a report by the Indo-Italian sector, which is to be expected, alongside further
Chamber of Commerce and Industry, this sector was interest rising from the commercial and contract and
worth $30 billion in 2015 with a projected growth rate government/institutional sectors.
of 26% between 2015 and 2019. This will outperform
While there is demand for essentially every form of
the global furniture market growth rate which,
furniture amongst Indian consumers, the following
according to the World Bank, is expected to hit the
product categories are in particular demand:
20% mark.
50% of the market is present in India’s top six cities, Wooden furniture
whereas more than 80% is present in 46 other cities Lamps & lighting
across the country.51 Metal furniture accessories
Chairs
Having recovered from a slowdown in imports
between 2012 and 2014, the Indian furniture Consumers are also finding other ways to purchase
market is expected to remain fruitful for foreign these products in India. As one of the world’s
firms. Imports are set to grow by 23% a year as the fastest growing ecommerce markets, Indians are
market recovers its taste for high quality, overseas likely to increase online furniture purchases in the
goods. coming years.52
Desire for foreign imports – As mentioned earlier, and image. Selecting a collection of imported brands
Indian furniture imports are expected to grow by 23% and utilising them to decorate houses is seen as a
annually. This demonstrates the burgeoning interest bold statement in India, so foreign manufacturers are
in top quality furniture sourced from overseas. Italian enjoying an increased market presence in India.
and German brands are enjoying particular success
in the market, and China and Malaysia are also strong Increased disposable income – Alongside societal
performers. changes in India, the country has enjoyedan increase
in disposable income levels. More cash often means a
India’s changing lifestyle choices – As middle class greater desire for foreign goods and designer brands.
consumerism becomes ever more prevalent in India, The furniture industry is reacting to this demand with
interior and decor tastes are changing. Furniture is an increase in import levels.
playing a big role in shaping Indian lifestyle choices
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http://www.nextbigwhat.com/analysis-indias-online-furniture-market-what-lies-ahead-297/
52
http://www.nextbigwhat.com/analysis-indias-online-furniture-market-what-lies-ahead-297/ ITEOil&Gas
Section 2.4 - Ceramic Tiles

Ceramic tiles are big business in India, with the largest in the world and Indian ceramic tile output
top eight manufacturers contributing over 75% of contributed 6% to global totals.54
the total organised market. The total estimated
The market is broken down into four major
size of the market in 2014 was $4.73 billion, and
segments: wall tiles, floor tiles, vitrified tiles and
this is projected to almost double to $8.63 billion
industrial tiles. Their specific market shares are
by 2016.53 In 2012, the market was the third
outlined in the table below:
Ceramic Tiles by Tile Market Segment Total Market Share

Market Share
Wall tiles 20%
(2014) 55
Floor tiles 23%
Vitrified Tiles 50%
Industrial Tiles 7%
Tiles, much like sanitary ware, are not just suitable This opens up the market for foreign firms as they
for residential construction in India. While the will be able to pitch their products to each market
housing market is a huge part of the ceramic tiles sector, rather than simply focusing on residential
industry, retail, business process outsourcing, IT construction for example. Designer tiles are
and industrial construction sectors also require top currently in high demand for use in bedrooms and
quality tiling.56 bathrooms. Premium tile manufacturers could
thusly enjoy hugely lucrative opportunities in India,
based on this trend.
Designer tiles and 3D tiles – Designer branding and Shift towards vitrified tiles – Over the past five
tiles are becoming ever more desirable in India as the years, vitrified tiles has been the fastest growing
consumer class grows. Designer tile use in homes sector in the Indian ceramic tiles market. Their high
is seen as a major statement, therefore they are durability and ease of maintenance has made them
increasing in demand. 3D tiles are also seeing their ideal for use for a number of different construction
popularity rise for use in wall cladding, elevations, sectors.
exterior cladding and so on.
Nanotechnology – Nanotechnology is being used
Eco-friendly tiles – Eco-friendly tiles, made from to make tiles more hygienic and resistant to dirt and
recycled or repurposed materials are also enjoying bacteria. A longer shelf life, due to improved durability,
status as an emerging trend. Usage of these tiles is is ensuring these particular ceramic tiles are seeing
expected to increase as customers grow increasingly increased usage in hospitals, clinics, laboratories,
eco-minded. food processing plans and other hygiene-important
locations. 57
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Section 2.5 – Doors & Windows

PVC doors and windows are growing in popularity being hampered by two issues: a lack of knowledge
in India, again down to ease of maintenance and regarding the material’s benefits and a price
durability. The overall market size for doors and conscious consumer. As a result, smaller players
windows in India is large, with a 2014 valuation of from Turkey and China are making inroads into the
$2.1 billion. Of this, uPVC contributed roughly 6% with market, but larger global firms are beginning export
a total value of $123 million. However, growth rates operations, including the following major German
have been accelerating quickly. A CAGR of 25% is producers:
likely, pushing the value of the uPVC products market
to over $400 million.58 Veka
Aluplast
There is a growing demand for these particular Kommerling59
doors and windows products in India, but it is
New players – Due to the relative lack of particularly from European manufacturers, whereas
knowledge in the Indian populace, regarding uPVC their overseas partners gain access to domestic
doors and windows, there is a growing opportunity for distribution networks.
major players to begin expanding into the country.
Use in large scale buildings – Buildings of 10-storeys
Tie ups with local firms – A number of international or more are beginning to see usage of incorporating
brands have struck deals with local businesses to uPVC doors and windows during the construction
enjoy greater distribution networks for expansion stage. Many players are realising the benefits of uPVC
into the Indian market. Indian firms get to enjoy products in their buildings, due to the attractive design,
the craftsmanship and quality of foreign products, user-friendliness and guarantees of quality. 60
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Section 2.6 – LED Lighting

As the Indian government is promoting the greater As such, growth in the LED sector far outstrips
use of greener technologies, and a number of other traditional lighting. For example, regular bulbs and
interior finishings and materials sectors are seeing light fixtures grow at an annual rate of 7.5%. However,
interest in eco-friendly products grow, it is worth the LED sector growth is almost five times higher at
mentioning LED lights.61 46% per year.63
The market for LED lighting in India is expected to grow The government itself is planning to buy 50% of its
to $183 million by 2020. Original market share for LED LED lights made from local manufacturers, as per an
lights in the country stood at 5% in 2012, but this is estimation from Frost & Sullivan, as outlined in the
expected to reach 35% in 2016 and continue until LEDs table below:
hold a majority stake. By 2020, it is predicted that LEDs
will cover 59% of the total market.62
Demand for LED Sector Demand for LED Lighting Total Market Share
Lighting by the
Government buildings/departments 40%
Government of India
by 201864 Railways 62%
Streetlights 42%
Industrial 48%
Commercial 39%
Automotive 38%
Residential 82%
Key international players in this sector include General Electric

companies from the Netherlands, Japan and the Phillips
United States, such as:
Endo lighting
Increased demand despite larger price points – Increased desire for eco-friendly products – This is
Despite costing 3-4 times more than traditional lighting being seen across the interior finishings and materials
methods, LEDs are substantially growing in demand. industry as a whole, but being backed up by government
Indian consumers are noting the greater energy initiatives towards lowering emissions. LED lights are
efficiency, light quality and lifetime of LED lights thus famed for being energy efficient and are growing in
want them in their homes or businesses. popularity with India’s more eco-minded consumers. 65
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Section 3 – India’s
Building Industry Sector
by Sector
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SECTION 3. BUILDING MATERIALS – STATISTICS AND OPPORTUNITIES
Section 3.1 - Building Industry Overview

Key Stats 8% of GDP (2014-2015)66
35 million employees in the sector67
Second largest employer and contributor
to economic activity after agriculture68
According to a wealth of industry commentators and In monetary terms, this growth rate would push the
researchers, India is set to become one of the world’s total valuation of India’s building market from its
preeminent construction markets over the coming 2015 value of $428.1 billion to $563.4 billion by 2020.70
years. India will replace Japan as the third largest
As well as massive-scale infrastructure upgrades, it
construction market globally by 2030, behind China
is in the sector of residential housing and that India
and the US, as forecast by the Global Construction
is projected to see the largest growth. 2016’s budget
2030 report from www.globalconstruction.com.
came with a pledge by the Modi government to combat
Accordingly, the report suggests that India will
the nation’s housing deficit by incentivising the
become a “new engine of global construction”.
building of affordable housing.71 With commercial and
India’s real growth rate, in terms of construction, industrial construction in a good place – and floods
has been predicted by Timetric’s Construction of FDI ensuring projects are backed financially – the
Intelligence Centre (CIC) to increase during the building sector will continue as the engine powering
period 2016-2020. Compared with 2011-2015’s rate India’s impressive construction industry growth.
of 2.95%, CIC expects the construction industry to
grow by 5.65% in the near future.69
Section 3.2 - Residential Construction

Residential construction was the largest contributor Affordable housing is very much the main
to the Indian construction industry between 2011 and component of future residential construction in
2015, according to Timetric. The research predicts that India. Like many nations with growing economies
this is likely to remain the case by 2020, with residential and populations to match, India is facing a
construction accounting for 30.6% of total market value.72 substantial housing shortage. According to research
firm RNCOS, India’s urban housing deficit will reach
According to IBEF, the housing sector contributes
34.1 million units by 2022.74 A separate study by
between 5% and 6% of India’s total GDP. The IBEF also
KPMG has suggested that a total of 110 million new
predicts that, during the period 2008-20, housing will
homes by 2022 in both urban and rural sectors.75
have enjoyed a CAGR of 11.2%.73
66
http://statisticstimes.com/economy/sectorwise-gdp-contribution-of-india.php
67
68
69
http://www.worldcement.com/indian-subcontinent/26022016/Bright-prospects-construction-industry-India-582/
70
71
http://www.theguardian.com/world/2016/feb/29/india-budget-targets-farmers-and-promises-infrastructure-upgrades
72
73
http://www.ibef.org/industry/real-estate-india.aspx
74
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http://articles.economictimes.indiatimes.com/2015-02-16/news/59196793_1_housing-shortage-affordable-housing-lig
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https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/Decoding-Housing-for-all-2022.pdf
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The defic it of urban homes stood at 18.8 million in 2012, but a CAGR of 6.6% will push the deficit towards the
34.1 million estimated by RNCOS.76 KPMG gave a snapshot of India’s urban housing demands in 2012 by offering
the following information:
India Urban Housing Shortage by Housing Type (KPMG)77

Tenure
Number of families Families living in Number of families Families Total urban
living in old houses katcha* houses living in congested houses without homes housing shortage
Self-owned 1,395,735 770,817 9,188,746 326,430 11,681,728
Rented 870,417 219,183 5,700,019 203.570 6,993,189
*katcha refers to Indian homes made using local products such as a mud and bamboo
The key driver behind this push for affordable Appropriately, the cabinet launched the Housing for
housing, as with infrastructure, is the Modi All by 2022 initiative in June 2015. This is exactly what
government. That is not to say that, prior to Modi’s it sounds like: a commitment by the government to
election in 2014, India wasn’t focused on alleviating provide housing to all sectors of society by 2022. The
the housing deficit. In 2013, for example, the World programme, which will lead to enormous demand for
Bank signed a $100 million credit agreement with building and finishing materials, is covered in more
the Indian government to aid low income families detail elsewhere in this report.
financing towards owning a home of their own. More
In order for the initiative to be a success, a
than 90% of those families affected by the housing
substantial increase in annual housing construction
shortage are of lower income status.78
will be required. The government will have to build
Appropriately, the cabinet launched the Housing for 2.5 million homes per year, which constitutes a 30%
All by 2022 initiative in June 2015. This is exactly what increase compared with pre-2015 levels.79
it sounds like: a commitment by the government to
The aim of the scheme will be to provide an additional
provide housing to all sectors of society by 2022. The
20 million homes across the country for low income
programme, which will lead to enormous demand for
families. A number of sites have been selected as
building and finishing materials, is covered in more
areas where houses for this project will be built.
detail section 4.1 of this report.
A breakdown of the states, and the number of
towns and cities involved, in which new homes will
constructed is outlined below:
74
Number of towns and cities benefitting from new housing projects under the
Housing for All by 2022 Initiative80
42
40
36
34
30
19
15 15
Madhya Odisha Rajasthan Chhattisgarh Telangana Gujarat Jammu & Kerala Jharkhand
Pradesh Kashmir
76
http://articles.economictimes.indiatimes.com/2015-02-16/news/59196793_1_housing-shortage-affordable-housing-lig
77
78
http://www.naredco.in/notification/pdfs/Urban-housing-shortage-in-India.pdf
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http://www.worldbank.org/en/news/press-release/2013/08/14/india-government-of-india-world-bank-sign-agreement-to-help-low-income-families-secure-housing-loans
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http://www.sankalpforum.com/affordable-housing-for-all-what-will-it-take/
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http://articles.economictimes.indiatimes.com/2015-08-31/news/66071106_1_housing-mission-affordable-housing-low-cost-housing

In order to further attract investors to help achieve ease of access for construction firms and companies
their end housing goals, the government announced involved in producing interior finishing materials.
in the 2016 budget that affordable homes up to 60
India is a land of huge contrasts, in terms of economic
sqm in size will be exempt from service tax. This
disparities, and the housing market is no different.
includes central or state government schemes
While the government focus is on affordable housing,
incorporating PPP schemes as well.81
and thus consequently the housing market is also
“100 per cent deduction for profits to an undertaking focused on this area, luxury housing still represents
in housing project for flats up to 30 sqm in four metro a key component of India’s housing market. This
cities and 60 sqm in other cities, approved during goes hand in hand with the rise of middle and upper
June 2016 to March 2019 and completed in three income families in India.
years. MAT to apply,“ finance minister Arun Jaitley
Business Today India suggests that demand is likely
announced in the February 2016 Indian budget.
to remain high. Quoting a report by KPMG, the news
The sheer number of homes needed means there outlet stated “Luxury is the fastest growing segment
are ample opportunities for foreign businesses to in residential housing. Between 2008 and 2012, about
make their mark on India. And, as outlined earlier in 182 luxury projects housing 25,570 units with a value
this report, an ever-improving FDI framework offers of $30 billion were launched in top seven cities.”82
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81
http://economictimes.indiatimes.com/wealth/real-estate/budget-2016-gives-massive-push-to-affordable-housing-supply-and-construction-
activity-seeks-to-spur-demand/articleshow/51191895.cms
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http://www.businesstoday.in/moneytoday/real-estate/why-demand-for-premium-housing-is-likely-to-remain-strong/story/216487.html

Section 3.3 – Office & Commercial Construction

While office construction was previously booming Another major Indian realty player, DLF, stated in 2015
in India, 2010 showing an increase of over 5 million that it was planning on investing $134 million in an
sqm of new office space being constructed in the 186,000 sqm office complex in the city of Gurgaon.
country’s key cities, the sector has seen a reduction According to DLF, there is likely to be an increase in
in growth over the past few years. For example, in the leasing market in the years to come, providing the
the first 9 months of 2013, only 2.1 million sqm was impetus for this particular development.85
added.83
Amazon has also announced its intentions to
That is not to say demand has dried up completely. expand operations in India via the construction of
With the country’s economic expansion, the demand new facilities. The internet-retail giant is building
for office space is likely to remain – for both domestic an enormous global delivery centre, the company’s
and overseas businesses. 2016 will see a number of second largest and largest outside of the US, in
large-scale office and commercial projects hit the Hyderabad. Construction of a 269,000 sqm delivery
country. centre was set to begin in March 2016.86
Indian Fund Management Pvt. Ltd, one of India’s As urbanisation is one of the major drivers of
largest lenders and investors in residential real construction in India, it is likely that a greater
estate, announced its decision to enter to the office demand for office space will be seen in the future.
market in 2016. The company is to deploy over $740 India’s cities are expected to continue growing, thus
million in investment in commercial property off the the amount of jobs situated in urban areas requiring
back of increased office space absorption in 2015, office space should logically increase too. Foreign
during which some 3.3 million sqm was put into construction and interior materials firms should most
action.84 certainly keep an eye on the Indian office market.
Section 3.4 – Retail Construction

An increase in a country’s urban and middle to Developments during this period included
high income populations often results in a larger 500,000 sqm of mall space in New Delhi alongside
retail market. With this comes increases in retail a 483,000 sqm supply pipeline in Hyderabad.87
construction. Delhi alone ranked 21st in the
2016 promises more retail construction in
world for shopping centre development in 2014,
Ahmedabad, according to the Times of India. Aithiki
for example. Hyderabad and Bangalore ranked
Gokul Club & Hotel Pvt Ltd announced construction
23rd and 31st respectively in the list, curated by
of a shopping mall and hotel complex in the city.
property consultant CBRE. According to CBRE,
The project is expected to cost around $134 million
around 39 million sqm of shopping space was built
including land and construction costs, and will cover
worldwide in 2014, with India accounting for 1.5
74,000 sqm.88
million sqm of the total.
83
http://www.bloomberg.com/news/articles/2013-11-25/india-office-boom-turns-glut-with-vacancies-real-estate
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http://www.livemint.com/Companies/D5bESegwX8KSzHd6BLLQiJ/Piramal-to-fund-office-projects-deploy-5000-crore-in-2016.html
85
http://www.business-standard.com/article/pti-stories/dlf-to-invest-rs-900-cr-on-construction-of-new-office-complex-115081600089_1.html
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http://www.ibtimes.com/amazon-picks-indian-city-hyderabad-set-largest-delivery-center-outside-us-2330101
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http://profit.ndtv.com/news/industries/article-delhi-ranked-21st-in-shopping-centre-development-386224
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http://timesofindia.indiatimes.com/city/ahmedabad/Mega-malls-set-to-dot-Ahmedabads-skyline/articleshow/51018857.cms

SECTION 3. BUILDING MATERIALS – STATISTICS AND OPPORTUNITIES Construction Metals
Section 3.5 – Industrial Construction

Indian manufacturing output accounts for 1.6% of example, Taiwanese electronics maker Foxconn is
the world’s total.89 Sites around the country, such committed to building a manufacturing plant in the
as in the numerous Special Economic Zones (SEZs), state of Maharashtra, with $5 billion being pumped
provide big incentives to foreign companies to make into the Indian economy over the next 5 years. This is
investment in constructing new factories in India. said to be the first of 12 factories that the company
plans on opening in India.90
Tata Steel SEZ, a subsidiary of Tata Steel, is
committed to providing a space for foreign firms to Alstom also stated in March 2016 that it will open a
get involved in industrial construction. At the Make new locomotive factory at Madhepura in the North-
in India Week exhibition held in Mumbai in February Western state of Bihar. As well as showing the
2016, Arun Misra, the SEZ division’s MD, said: “What opportunities for foreign firms to participate in large-
we tell every investor is you can come and start scale projects in India, the Alstom project shows
building your factory within 15 days,“ regarding his how these developments can transform local areas
company’s initiative. too. Madhepura is traditionally an agrarian region –
Alstom’s factory, which will produce high-speed
A number of large foreign companies are planning to
electric trains, could start the growth of industry in
build, or are already building, factories in India. For
the region.91
89
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http://www.businessinsider.in/All-you-need-to-know-about-Indias-burgeoningmanufacturing-sector/articleshow/51153680.cms
90
http://www.pcworld.com/article/2968372/foxconn-to-invest-5b-to-set-up-first-of-up-to-12-factories-in-india.html
91
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http://www.livemint.com/Companies/bUhoYVGDD3uJwYJgThwMBI/Madhepura-locomotive-factory-would-be-a-gamechanger-for-Bih.html

Section 3.6 – FDI in Construction and Infrastructure

Due to the huge levels of investment desired by and sewage, as well as for completed projects for
the government, India is extremely open to foreign operations and management of townships, malls/
investors in construction and infrastructure. As such, shopping complexes and business constructions.94
a number of government initiatives are in place to
Industrial parks can also benefit from improved FDI
ensure that foreign investment is encouraged and
outlines. 100% of FDI levels under the automatic
easy to accomplish.
route are permitted. These developments are also
Chief among them is the removal of entry and exit exempt from the conditions applicable to other
barriers for FDI into construction. Previously, there construction development projects – provided they
was an area restriction of 20,000 sqm alongside a meet the below criteria:
minimal capitalisation requirement of $5 million to be
brought in within six months of operations starting. No less than 66% of the site is to be allocated for
industrial activity.
Now there are no blockages stopping foreign
investment in construction at all scales. In addition, A minimum of 10 units are required. No single unit
foreign investors can exit and repatriate investments can occupy more than 50% of the total allocable
before the completion of a project, with a lock-in of area.95
three years.92
A number of nations, including Japan and China,
The Cabinet Committee on Economic Affairs (CCEA) have invested in Indian construction, either as part
raised the threshold for FDI inflows requiring its of PPPs or governmental partnerships. The Japanese
approval in a bid to expedite approval processes and government, for example, pledged to invest a total
boost FDI levels even higher. Previously, the investment of $10 billion in the monumental Delhi-Mumbai
figure stood at $187 million, but now the CCEA only has Industrial Corridor in 2011.96
to approve levels upwards of $469 million.93
China’s Dalian Wanda group, one of the country’s
There are a number of other measures and policies largest real estate firms, announced in January, 2016 it
dedicated towards creating a strong FDI framework in is planning the development of a $10 billion industrial
India – especially in the construction industry. Make park. The development will be the first of its kind for
in India’s official website details these: the group, and the first phase of its construction Is due
to start in 2016 in Haryana State.97
No minimum land area requirement for
development of serviced plots. It was announced in August 2015, that India
and the United Arab Emirates plan on creating a
A minimum floor space requirement of 20,000 sqm $75 billion investment fund for the development of
in construction development projects. infrastructure projects. According to a report from
Bloomberg Business, the fund will be used to develop
100% FDI financing is permitted for urban expansion of railway networks, ports, roads, airports
infrastructure such as transport, water supply and industrial corridors.98
92
http://indianexpress.com/article/india/india-news-india/govt-eases-fdi-norms-fipb-limit-raised-from-rs-3000-crore-to-rs-5000-crore/
93
http://indiainbusiness.nic.in/newdesign/index.php?param=investment_landing/247/1
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http://www.livemint.com/Politics/9Ni519JiITmpgoezdToGbN/Japan-will-invest--10-bn-in-Delhi-Mumbai-Industrial-Corrido.html
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http://www.reuters.com/article/dalian-wanda-india-idUSKCN0V0110

Section 4:
Major Projects
This report has touched on some of the huge projects India is currently undertaking or is planning on beginning
the initial stages of in the near future. Here, we look into them in more detail, to show India’s ambition when it
comes to construction.
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SECTION 4: MAJOR PROJECTS
Section 4.1 – Housing for All by 2022

India is facing a huge housing shortage, particularly “We are seeing a shift in the type of developers who
for lower income families. In order to counter this, the are now entering the space. These are serious players
Indian government announced its Housing for All by who want to focus on delivering the projects in
2020 initiative in June 2015. Billions of dollars’ worth a clean and transparent manner. These are the ones
of investment has been allocated for this scheme. who will adopt new technology for executing projects
in a more professional way and on time,” Mr Krishnan
The brief of the initiative is simple yet challenging:
said.101
to build 20 million new homes across the country by
2022. Included in the project’s proposals is a range Under the banner of Housing for All by 2022, a
of financial measures designed to make the vast number of projects are beginning to reach the
majority of homes constructed under this scheme as development stage with construction planned to
affordable as possible. begin in 2016. Much of these are located in the state
of Maharashtra. For example, Indian reality
As such, a number of serious players have begun to
developers MCHI-CREDAI entered into a
position themselves as top suppliers of affordable
memorandum of understanding with the state’s
housing, according to Indian equity firm Brick Eagle’s
government to build approximately 596,000
CEO Rajesh Krishnan.
affordable housing units in the region.102
In November, 2015, India’s Ministry of Housing & Urban Andhra Pradesh

Poverty Alleviation approved construction of house that Telangana
would form the initial stage of the government’s mega Tamil Nadu
housing project. Some 228,000 homes were given approval for Gujarat
construction across five states: Rajasthan103
It was announced in March 2016 that a further Haryana region with a particular focus on affordable
425,000 houses had been approved under the housing.106 Another realty developer, Agrassin Spaces
Housing for All scheme. This is expected to cost LLP, is investing in a housing scheme in the Faridabad
around $3.7 billion dollars, showing the huge sums region of the state. The development will cover
being thrown into this construction programme.104 5.35 acres and comprises of 720 housing units.107
March 2016, also saw a number of key developments The next six years is likely to usher in huge numbers
entering their preliminary. Indian developers of construction projects. Whether these are houses,
Supertech, for example, announced significant apartment buildings or other forms of housing, they
investment in projects across the country. One will all require the same interior needs: quality, long
development is the “Basera” apartment scheme in lasting products. The Housing for All 2022 initiative,
the state of Haryana.105 This comes off the back of a therefore, is the perfect platform for interiors and
commitment by Supertech to invest $848 billion in the finishings materials companies to expand into India.
101
http://articles.economictimes.indiatimes.com/2015-12-06/news/68809194_1_affordable-housing-sector-brick-eagle-developers
102
http://articles.economictimes.indiatimes.com/2016-02-17/news/70698462_1_maharashtra-government-affordable-housing-mchicredai
103
http://pib.nic.in/newsite/PrintRelease.aspx?relid=131639
http://economictimes.indiatimes.com/news/politics-and-nation/over-4-25-lakh-houses-sanctioned-under-housing-for-all-scheme-
104
president-pranab-mukherjee/articleshow/51108606.cms
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http://www.masterplansindia.com/housing/supertech-basera-affordable-housing-sector-79-gurgaon
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http://www.masterplansindia.com/housing/housing-for-all-supertech-invest-rs-5706-cr-haryana-affordable-housing
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http://www.masterplansindia.com/housing/aagman-new-housing-project-sector-70-faridabad-agrasain-spaces

Section 4.2 - Smart Cities Mission

The Smart Cities Mission is a government initiative Adequate water supply
to update and renew the urban infrastructure
Assured electricity supply
in 98 key cities in India. The first 20 sites for
redevelopment were outlined in January 2016,
Sanitation and solid waste management
and the remaining inclusion will be released over Efficient urban mobility and public transport
the next two years.108 Affordable housing especially for the poor
Robust IT connectivity and organisation
While there is no hard and fast rule for what
Sustainable environment
constitutes a smart city, the government outlined
the following core infrastructure requirements –
Storm water drains
much of which will need extensive construction Pedestrian, non-motorised and public transport facilities
work. Parking spaces109
So far, the government has allocated City State

$1.5 billion dollars in order to begin
Ahmedabad Gujarat
the rollout of this extensive update
and renewal programme. The first Belagavi Karnataka
20 cities to receive their share Bhopal Madhya Pradesh
of funding, and enjoy the initial Bhubaneswar Odisha
construction stages of this Chennai Tamil Nadu
huge project are outlined Coimbatore Tamil Nadu
in the adjacent table.
Davangere Karnataka
Initial 20 Cities Allocated Guwahati Assam
Funding Under the Smart Cities Indore Madhya Pradesh
Mission (2016)110 Jabalpur Madhya Pradesh
Jaipur Rajasthan
Kakinada Andhra Pradesh
Kochi Kerala
Ludhiana Punjab
New Delhi Municipal Corporation Delhi
Pune Maharashtra
Solapur Maharashtra
Surat Gujarat
Udaipur Rajasthan
Visakhapatnam Andhra Pradesh
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http://www.thehindu.com/news/national/list-of-first-20-smart-cities-under-smart-cities-mission/article8162775.ece
109
http://www.smartcitiesindia.com/
110
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As noted above, affordable housing is one of the key An period of 8 to 10 years is expected to construct
components of smart cities across India. As such, a smart city from scratch. A number of cities have
housing construction in the above cities, as well as reportedly got a head start on other locations, even
the remaining 78 sites, will likely increase. India’s before the complete details were finalised.
government is already committed heavily to creating
One such location is the Gujarat International
a large affordable housing stock, as outlined in the
Financial Tec (GIFT). GIFT is expected to be a leading
Residential Construction section of this report.
example of the Smart Cities Mission. Located over a
International attention and cooperation is expected 886 acre site, 18km from Ahmedabad airport, GIFT
to be of a high level with regards to this project. has been conceptualised as a global finances and IT
Germany, for example, has set up a six member services hub. Construction began as early as 2011.
joint committee on how the two countries could
The city is expected to generate 500,000 direct jobs
collaborate in designing smart cities. The results of
and an equal number of indirect jobs. GIFT City will
this council, which included representatives from
have a command centre with ICT infrastructure to
India’s Urban Development Ministry and the Ministry
manage everyday tasks.
of Housing and Urban Poverty Alleviation, ended with
Germany agreeing to develop the cities of Kochi, A number of modernisations have been planned, such
Bhubaneswar and Coimbatore. as multi-level parking facility with space for 5,400 car
spaces, a 1,000 MW electrical supply and a smart
German Ambassador to India Martin Ney, said, while
solid waste management system. This is in addition to
addressing a press conference regarding his country’s
the housing, commercial and industrial construction
input into the Smart Cities Mission, that Germany is
projects planned. The first of the three construction
an ideal partner in India’s mission to create smarter
phases is due for completion in 2016 with a final date
cities as the country is “very strong at smart planning
of 2026.112
for urban centres”.
GIFT is just one examples of Smart City innovation.
“We have developed the technologies to make life
And, with Germany as a prime example of
in cities easier. We have developed the processes
international interest, the space for foreign
to bring on board the stakeholders to make cities
companies looking to get involved in these multiple
thrive and German companies have developed smart
large scale projects is definitely available.
solutions to make smart cities,” he added.111
ITEBeauty
111
http://www.dnaindia.com/money/report-germany-to-help-india-develop-kochi-bhubaneswar-and-coimbatore-as-smart-cities-2186734
112 ITEOil&Gas
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/460151/UKTI_-_The_UK_offer_to_build_together__1_.pdf

Section 5 –
Doing business in India
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SECTION 5 – DOING BUSINESS IN INDIA
Section 5.1 – Ease of Doing Business

India ranks 123rd on the Heritage 2016 Index of India’s position in the World Bank and IMF’s
Economic Freedom with a total score of 56.2. 2016 Doing Business ranking has increased 4 places
This means India sits below the world average from 134 to 130.114
score of 60.7 and below the regional average of
Three of the world’s major financial ratings
59.0. However, India’s total score has increased by
institutions recently updated their scores for India.
1.6 points from 2015, showing that progress is being
Moody’s Financial Services115, Standards & Poor’s116
made towards making the country an easier place
and Fitch117 have all rated India as a stable country
to do business.113
for investment.
India Investment Ratings Institution Rating Outlook

Ratings, 2016
Moody’s Baa3 Positive
Fitch BBB- Stable
S&P BBB- Stable
Although India’s current ease of business rating is low, it is steadily increasing. This will be a vital step towards
attracting further foreign investment and ensuring India remains a competitive economic power globally.
Section 5.2 – Key Business Stats

All data taken from the World Bank and International Financial Corporation (IFC) Doing Business guide118:
Topic DB Rank 2016 DB Rank 2015 Change

Starting a Business 155 164 +9
Dealing with Construction Permits 183 184 +1
Getting Electricity 70 99 +29
Registering Property 138 138 No Change
Getting Credit 42 36 -6
Protecting Minority Investors 8 8 No Change
Paying Taxes 157 156 -1
Trading Across Borders 133 133 No Change
Enforcing Contracts 178 178 No Change
Resolving Insolvency 136 136 No Change
113
http://www.heritage.org/index/country/india
114
http://www.doingbusiness.org/data/exploreeconomies/india/
115
116
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https://www.moodys.com/research/Moodys-affirms-Indias-Baa3-rating-changes-outlook-to-positive--PR_320605
http://economictimes.indiatimes.com/news/economy/indicators/sp-retains-india-rating-at-bbb-with-stable-outlook/articleshow/49455626.cms
117
http://www.hindustantimes.com/business/india-s-investment-rating-still-bbb-with-stable-outlook-fitch/story-18hZBtKADmpHdilgkAB8kI.html
118
http://www.doingbusiness.org/data/exploreeconomies/india/ ITEOil&Gas
SECTION 5 – DOING BUSINESS IN INDIA title
Time and Cost of Indicator Value

Exports/Imports119
Time to export: Border Compliance (hours) 88 hours
Cost to export: Border Compliance (USD) $368
Time to export: Documentary Compliance (hours) 61 hours
Cost to export: Documentary Compliance (USD) $104
Time to Import: Border Compliance (hours) 311 hours
Cost to Import: Border Compliance (USD) $556
Time to Import: Documentary Compliance (hours) 67 hours
Cost to Import: Documentary Compliance (USD) $139
Cost/time of border compliance includes time/cost for obtaining, preparing, submitting documents during port
or border handling, customs clearance and inspection procedures – World Bank/IFC definition.
Cost/time of documentary compliance includes the time/cost for obtaining documents, preparing documents,
processing documents, presenting documents and submitting documents – World Bank/IFC definition.
Enforcing contracts is a lengthy process in India, according to the Doing Business guide. It takes an average of
1,420 days to resolve contract disputes, which is below the South Asia standard of 1,076.9 days. However, cost of
claims stands at 39.6%. This refers to costs in court fees and use of attorneys in contract dispute resolution.120
Resolving insolvency Indicator Value

is explained in the
Recovery rate (cents on USD) $0.27
table below121:
Time (years) 4.3 years
Cost (% of estate) 9.0%
The recovery rate calculates how many cents on the in calendar years and includes all appeals and
dollar secured creditors recover from an insolvent delays - World Bank/IFC definition.
firm at the end of insolvency proceedings - World
Cost refers to the average cost of insolvency
Bank/IFC definition.
proceedings. The cost of the proceedings is recorded
Time refers to the average duration of insolvency as a percentage of the estate’s value - World Bank/
proceedings. The time of the proceedings is recorded IFC definition.
119
http://www.doingbusiness.org/data/exploreeconomies/india/#trading-across-borders
ITEBeauty
120
http://www.doingbusiness.org/data/exploreeconomies/india/#enforcing-contracts
121
http://www.doingbusiness.org/data/exploreeconomies/india/#resolving-insolvency ITEOil&Gas
Section 6:
Challenges &
Opportunities
6.1 Opportunities 6.2 Challenges

Rapidly growing population Poor existing infrastructure
Fast expanding consumer class Complex bureaucracy
Huge investment in infrastructure, housing and other Lack of transparency

construction projects
Risk of corruption
Growing demand for high quality foreign products
from leading brands
FDI processes being streamlined
Strong economic growth
Construction industry forecast to remain strong
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About this report
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ITEBuild&Interiors This Market Insights report was created by ITE Build & Interiors.
Connecting your business to the world
ITEFood&Drink At ITE Build&Interiors, we specialise in producing high quality trade

exhibitions around the world, where our exhibitors & visitors have the
opportunity to do business, share information, and learn about the latest
ITESecurity&Protection developments in the market.
ITETravel&Tourism
ITEMining
ITETransport&Logistics
ITEHealthcare
ITEConstruction Machinery
We organise the Acetech series of building and interiors

exhibitions.
Acetech – your gateway to the Indian building and interiors

market
Acetech is a series of Asia’s largest architecture, construction

and engineering exhibitions, recognised as India’s premier
portfolio of events for bringing major players from the country’s
building and interiors industry.
Originating in Mumbai in 2006, the show now also runs in New

Delhi, Bengaluru and Ahmedabad. ITEBeauty
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TITLE title
Contacts
Valentina Moschetti
Sales Manager
Valentina.moschetti@ite-exhibitions.com
+44 207 596 5040
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Building and Interiors

A MARKET INSIGHTS REPORT

Section 2 – India’s Interior Finishing and Materials Market.... 12

Section 3 – India’s Building Industry Sector by Sector............ 21

Section 4 – Major Projects..................................................... 30

Section 5 – Doing business in India........................................ 35

Section 1.1 – Population

Total population of 1,322,246,6681

Country 2015 Population 2030 Population 2050 Population

India is a young country – 0-14 28.09%

Section 1.2 – GDP & Economy

GDP growth in India 2014-2016 (IMF)16

GDP Descriptor 2014 2015 2016 (IMF estimate)

PWC Predications for Top Country Rankings by GDP-PPP19

PPP PPP PPP GDP PPP GDP PPP GDP PPP

6 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 1.3 – Sources of Growth

Section 1.4 – Foreign Direct Investment

10 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 1.5 – Imports

Country Imports Value Product/Commodity Total Value

11 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 2.1 – Sanitary Ware and Bathroom Fittings

India Sanitary Ware and Bathroom Fittings Market by Value (2014) 44

Market Segment Contribution of Market Value CAGR Prediction (2012-2018)

Previously, domestic manufacturers controlled the Kohler

13 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Emerging trends in this market segment include:

Complete bathroom solutions – Indian Increasing presence of foreign players –

Section 2.2 – Modular Kitchens

Indian Modular Country Import Share Cement Sales (tons)

Emerging trends in this market segment include:

Section 2.3 – Furniture

Emerging trends in this market segment include:

Section 2.4 - Ceramic Tiles

Ceramic Tiles by Tile Market Segment Total Market Share

Emerging trends in this market segment include:

Section 2.5 – Doors & Windows

Emerging trends in this market segment include:

18 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 2.6 – LED Lighting

Key international players in this sector include General Electric

Emerging trends in this market segment include:

19 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 3.1 - Building Industry Overview

Section 3.2 - Residential Construction

India Urban Housing Shortage by Housing Type (KPMG)77

22 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

23 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 3.3 – Office & Commercial Construction

Section 3.4 – Retail Construction

24 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 3.5 – Industrial Construction

25 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 3.6 – FDI in Construction and Infrastructure

26 Building and Interiors in India: Creating a Global Powerhouse ITEBuild&Interiors

Section 4.1 – Housing for All by 2022

In November, 2015, India’s Ministry of Housing & Urban Andhra Pradesh