Fastest Growing Industries in India in 2024

In recent years, the world has witnessed the rise of India. The Indian economy has grown tremendously due to technological advancements, increasing Foreign Direct Investments (FDI), and a young population. However, many might think that the investment opportunities after a bull run in the stock market may be few, but they may be wrong.

There are still some sectors that are growing at a tremendous pace. If you want to put your funds into the stock market but aren’t sure where to start or are confused about which industry has the most significant potential for long-term growth? Then, this blog is for you. In this blog, we will provide an overview and future potential of the 7 fastest-growing industries in India.

List of 7 Fastest Growing Industries in India

The list of 7 fastest growing industries in India is given below:

1. Electric Vehicle Industry
2. Drone Industry
3. Renewable Energy Sector
4. Semiconductor Industry
5. Metal Sector
6. Infrastructure Sector
7. Artificial Intelligence Sector

Overview of the 7 Fastest Growing Industries in India 

An overview of the seven fastest-growing industries in India is given below:

1. Electric Vehicle Industry

Of all the countries, India ranks third in the global vehicle market. However, due to growing environmental concerns, the Indian government is advocating for the use of electric vehicles (EVs) to reduce pollution and improve air quality. Electric cars have certain requirements, such as an electric motor powered by an externally charged battery. Due to the rising demand for electric vehicles, investors are keeping a careful eye on the manufacturers of these vehicles and the companies that supply their spare parts. Electric cars are employed in various sectors and are not just for personal transportation. EVs feature two-wheelers, commercial vehicles, and public transportation. Several companies now sell electric tractors as well.  

Future in India: The government of India is supporting the electric car industry through subsidiaries and other efforts, which bodes well for the sector. India’s need for electric cars (EVs) will grow due to the country’s increasing disposable income and steadily rising petrol prices. The government aims for thirty percent of total vehicles to be electric vehicles by 2030.

Top 5 EV Stocks as per Market Capitalisation

2. Drone Industry

Unmanned Aerial Vehicles, or UAVs, is another name for drones. They are either operated remotely or function as autonomous aircraft. Numerous firms in India are involved in manufacturing drones and their components. Given the advancement in artificial intelligence and machine learning, the drone market is predicted to expand in the near future. Drones are employed for various tasks, including logistics, hobbies, precision farming, and military surveillance. 

Future in India: The drone business has a bright future with the potential to revolutionize several sectors, including infrastructure, agriculture, logistics, etc. Additionally, since the government is providing production-linked incentives to the drone industry, the demand for drones for the defense industry is expected to rise. The global drone market is currently valued at $30 billion in 2023 and is predicted to be worth $58 billion in 2030. 

Top 5 Drone Stocks as per Market Capitalisation

3. Renewable Energy Sector

Businesses that generate power using renewable energy sources, such as biomass, hydropower, solar energy, and wind energy, are included in the renewable energy sector. Nations around the world are making changes to combat climate change and reduce carbon emissions by using renewable energy sources because these sources offer clean, sustainable energy.

Renewable energy is used in both residential and commercial settings. The renewable energy sector manufactures products such as biofuel stoves, water heaters, solar panels, solar cookers, etc. Numerous renewable energy products—such as hydrogen fuel cells, geothermal power plants, and wind and solar farms—are employed for commercial purposes. 

Future in India: India’s renewable energy sector has a promising future because of technological advancements and the government’s emphasis on renewable energy sources. India can be seen as a pioneer in the shift to renewable energy due to its abundant energy resources. In addition, the government is concentrating on offering a range of incentives to support this industry. Despite several obstacles, this industry is helping India reduce its carbon footprint.

Top 5 Renewable Energy Stocks as per 1Y Return

4. Semiconductor Industry

Semiconductors are the brains behind everything, from the sophisticated artificial intelligence reshaping several sectors to the cell phones in our pockets. Semiconductors are essential for many products, such as computers, cell phones, electric vehicles, etc. There are companies in India that develop, produce, and sell chips or semiconductors. Given India’s growing importance in the world semiconductor market, investors should keep a close watch on this sector. 

The products manufactured by the semiconductor industry are used in different sectors as they are used in the automotive sector for Engine Control Units (ECU) and Automatic Braking Systems (ABS). They are also used in consumer electronics.

Future in India: It is anticipated that the need for semiconductors in AI and ML applications will rise significantly. In the upcoming years, chips designed specifically for AI processing—such as GPUs and specialized AI accelerators—will gain popularity. India aims to become a global leader in the semiconductor industry, and by 2026, it expects its domestic semiconductor market to grow to over $80 billion. With the “Make in India” campaign, the Indian government hopes to stimulate the semiconductor industry. Plans to build semiconductor fabrication facilities in the nation have also been revealed. In addition, the India Semiconductor Mission (ISM) was launched in 2021 by the government of Prime Minister Narendra Modi. Amounts totalling INR 76,000 crore have been set aside to support semiconductor design, packaging, and manufacturing. 

Top 5 Semiconductor Stocks as per Market Capitalisation

5. Metal Industry

India is a mineral-rich country because of the presence of minerals, including iron ore, manganese, and other elements in abundance. Metal and mining corporations are the firms that engage in mineral extraction. They extract minerals from the earth, process them, and supply them to various industries, such as the building and automotive sectors. The metal industry contributes to GDP, creates jobs, and increases the country’s foreign exchange reserves through exporting its goods. Metals are widely used in many sectors, including electronics, aerospace, medical, defense, automobile and infrastructure sectors. 

Future in India: Since the metal industry provides raw materials to other industries, India’s economy heavily depends on it. The government is also employing several strategies to raise the output of the manufacturing sector, including launching the Make in India project. The Indian metal industry is expected to increase from its $20.89 billion valuation in 2023 to $25 billion by 2029.  

Top 5 Metal Stocks as per Market Capitalisation

6. Infrastructure Industry

Every country needs a robust infrastructure to grow. A robust network of buildings, flyovers, railroads, roadways, etc., helps manufacturing firms deliver products on time and also helps other businesses as well. The Indian infrastructure sector is considered one of the most dynamic economic sectors of the country due to its role in creating significant job opportunities and supporting economic development. Infrastructure development is the foundation of many sectors, including transportation, energy, telecommunication, etc.  

Future in India: India’s progress depends on the infrastructure sector because it is the cornerstone of its economic growth. Furthermore, to encourage urbanization, the government is offering incentives to this industry. Growing private sector participation in this industry and support from government entities create new investment opportunities in this sector. The Indian infrastructure market is expected to be worth more than $1.4 trillion by 2025.    

Top 5 Infrastructure Stocks as per Market Capitalisation

7. Artificial Intelligence (AI) Industry

Artificial intelligence (AI) is a rapidly evolving field that is transforming a wide range of industries. AI is the development of computer systems that mimic human intellect through features like speech recognition, visual perception, decision-making, etc. These machines can also comprehend human languages and react appropriately, and their real-world applications include chatbots and virtual assistants. With their growing use in fintech, e-commerce, tech, and healthcare and a sharp increase in organizational investment in cloud computing and information technology, the AI industry is expected to grow rapidly. Artificial Intelligence has various applications, such as self-driven cars, robots, the healthcare industry, the financial industry etc.

Future in India: Over the next five years, the AI market is predicted to grow at the second-fastest rate among large economies, at 20%. India’s economy could benefit substantially from AI, and estimates suggest it may be worth $1 trillion by 2035. When it comes to implementing AI, data security and privacy are crucial, and India needs strict laws to guarantee the ethical development of AI. 

Top 5 Artificial Intelligence (AI) Stocks as per Market Capitalisation

Which Sector Has the Most Growth Potential?

The sectors above have enormous growth potential, but over time, the infrastructure and electric vehicle sectors offer the most significant potential for expansion. People are turning to alternate options, i.e., electric automobiles, due to the increase in fuel prices. Furthermore, the infrastructure industry will inevitably expand over time due to the government’s emphasis on building the nation’s infrastructure through various initiatives. 

Conclusion

The Indian economy is a mix of established industries and new-age industries. Many sectors of the Indian economy have rallied in the past few years. However, a few sectors, such as AI, EV, and infrastructure, still offer excellent investment opportunities. India’s economy is expanding, and the industries mentioned above will keep fostering that growth. You can diversify your portfolio and lower sector-specific risks by distributing your investments across several industries. However, make sure you conduct in-depth research and speak with your investment advisor before making any investments. 

Frequently Asked Questions (FAQs)