ICICI: Rising Income and Demand to Drive India's Market Growth

According to a report by ICICI Mutual Fund, India holds significant promise as a market with vast potential, as it falls below the global average in product markets across several crucial sectors. The report indicated that the increasing preference for premium products, combined with low market penetration, is expected to boost domestic demand dynamics in the near future.

It mentioned that factors such as a youthful population, increasing income levels, evolving consumption habits, and recruitment trends are expected to maintain the demand momentum. For instance, the car market in India accounts for only 4 percent, whereas it stands at 15 percent in China and 81 percent in the United States.

Likewise, just 6 percent of Indians travel internationally, in contrast to 9 percent in China and 42 percent in the United States. The ownership of air conditioners in India is a mere 8 percent, significantly lower than China's 60 percent and the U.S.'s 90 percent.

Refrigerators and other household appliances also show a significant disparity, with just 18 percent penetration in India, compared to 94 percent in China and 100 percent in the US.

India has potential for growth in digital consumption. Currently, 37% of Indians use smartphones, compared to 54% in China and 83% in the US. Internet penetration in India stands at 58%, which is slightly below China's 60% and significantly lower than the US' 95%.

The report highlighted that the country's distinctive demographic benefits bolster its growth narrative. With over half of the population being of working age, this ratio is anticipated to stay consistent until 2047. This is sharply different from global trends, where the working-age population reached its highest point in 2010 and has decreased ever since.

Moreover, increasing income levels, evolving consumption habits, and growing hiring trends are anticipated to uphold consistent demand. India's economic foundations are robust, marked by clean balance sheets across the government, corporate, and household sectors, along with strong fiscal discipline and rising capital expenditures.

India's long-term growth trajectory remains strong due to steady domestic demand and structural stability, cementing its position as a key player in the global economy. The country's growing market potential is anticipated to attract significant investment and innovation, ensuring continued growth in the future.