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Security Concepts Taking Root in India
a&s International 2008/1/17

Despite prevalent views of India as poverty-riddled, the business world has woken to its potential. A&S went to India to find out whether the hype is justified, and how it affects purveyors of electronic security products. Despite prevalent views of India as poverty-riddled, the business world has woken to its potential. A&S went to India to find out whether the hype is justified, and how it affects purveyors of electronic security products.

¨India has been enjoying good economic growth, which in turn, has stimulated many industries, including electronic security,〃 said Ian Meadows , Business Development Manager, Cardax Systems. ¨There is also a heightened sense of security, stemming from the Sept. 11 terrorist attacks in the U.S. and, closer to home, the attack on the Indian Parliament and bombs in Mumbai. Security is no longer a luxury.〃

P. Srinivas of the U.S. Commercial Service in Mumbai, however, regretted that, ¨Security is not yet being taken as seriously as it should be. Big oil and gas companies as well as corporations in other industries still see security as an investment of little importance; which is a pity, because security is one of the most important areas in which one can invest. This realization has not yet sunk in India. Things are happening slowly in this industry.〃

Indiaˇs market power lies partly in its young population. IT-and IT-enabled industries are hungry for young, educated staff. According to the Asian Studies Network Information Center (ASNIC) at the University of Texas at Austin, India's middle class is predicted to grow at a rate of 7 percent annually. It has the largest child and youth market in the world. The largest adult market in India is the young householder, estimated at 23 percent. The young householder is considered to be the best educated of the adult groups in India. This segment has benefited from the liberalized economy and has shown a great interest in foreign products. In purchasing practice, it tends to be more experimental. This market is projected to remain stable for decades to come.

Education in India has also improved over the past decade, which will have a positive impact on markets and investment in India. Educational improvements will expand markets as educated individuals are more willing to try new lifestyles, products and services. Moreover, the service sector reports a higher-than-average yearly salary and is projected to expand by 3.45 percent per year. It will account for 15 percent of the labor force by 2010. These new workers represent a particularly attractive consumer market with their higher education, income and spending power.

India is also actively working on reducing poverty. The Indian government has pledged US$2.2 billion for the National Rural Employment Guarantee Scheme, aimed at helping 60 million families living in poverty and covering 330 of the poorest districts in the country. Women comprise 40 percent of beneficiaries, according to the BBC, while caste and tribes comprise 62 percent. Under the scheme, employment has to be provided to a worker within 15 days of demand; this helped generate 900 million days of employment between 2006 and 2007.

The Next China?

¨Currently, the Indian market is two years behind that of China,〃 said Pradeep Chouhan, CEO of Tyche Peripheral System, ¨but I predict that we will overtake China, especially in terms of technology and software development, and maybe even in manufacturing.〃 Ashok Singh, Managing Director & COO, Facility Security Division, AutoCop, agreed: ¨Since liberalization of the market, restrictions such as the government dictating the maximum number of units manufactured by a single vendor, have been removed.〃

Shaji N.M., CEO of Prisma Bytes, added that: ¨India has advantages over China. There are no language issues; and large numbers of Western-educated Indians are coming home and enhancing the workforce, especially in software development  not to mention India's own strong education system.〃

Recent media and market reports back up Chouhanˇs and Singh's predictions. So far, no definitive measures have been taken to give the security industry the required benefits in terms of tax cuts, establishment of legislation and building codes with respect to deployment of systems or stringent enforcement of minimum fire safety requirements. However, when regulations are in place and safety norms beefed up and made mandatory, market penetration is bound to increase, said the latest Frost & Sullivan India report.

There could be a manufacturing boom akin to Chinaˇs in the 1990s, Newsweek reported. Indiaˇs huge domestic market, low average wages and potential as an export platform are attracting interest like never before, as manufacturers seek to limit vulnerability to future political or economics changes in China. In a new survey, consultancy Capgemini found ¨very keen interest〃 in India as a manufacturing base; it predicts that ¨India could challenge China as the manufacturing center of the world in the next three to five years.〃

Related Report
India Electronic Security Sector Posting Growth of 30 Percent

India: Product Sector Overview

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