New analysis from Frost & Sullivan finds that the Indian civil security market earned revenues of US$10.7 billion in 2012 and is estimated to more than double to $26.5 billion by 2020, at a CAGR of 12%. The research covers border and maritime security, critical infrastructure protection for airports, oil and gas, power
New analysis from Frost & Sullivan finds that the Indian civil security market earned revenues of US$10.7 billion in 2012 and is estimated to more than double to $26.5 billion by 2020, at a CAGR of 12%. The research covers border and maritime security, critical infrastructure protection for airports, oil and gas, power utilities and mass transportation, emergency response, safe cities and cyber security. Airport security, followed by safe cities, will be the fastest expanding segments, with growth rates of 31.2% and 21.4%, respectively.
The Indian civil security market is burgeoning as left-wing extremism and terrorist threats compel state governments and police forces in the country to upgrade their civil security capabilities. Market participants also spot considerable opportunities in the country's need to modernize critical infrastructure, such as airports, mass transportation, and oil and gas facilities. The government emphasis on natural disaster management and securing the borders and coastlines is seen as a growth prospect as well.
"The demand for equipment and technologies to address the existing capability gaps in India's civil security is attracting global suppliers to the country," said Anshul Sharma, Aerospace and Defense Industry Analyst. "Investment plans have been proposed by the central and state police agencies to improve the capabilities of various state police forces in areas such as communications, surveillance, weapon systems, combat uniforms, ammunition, ground vehicles and airlifting."
In addition, changes have been made to the defense offset policy that requires foreign vendors, who receive contracts of more than $60 million, to invest 30% of the deal value in the Indian market through offset partners. They can now discharge their offset liabilities in some areas of internal security, thereby aiding market development. However, with numerous companies offering various products and solutions, the Indian civil security market has become highly fragmented. Price sensitivity among end users in such a fragmented market adds to the challenge.
"To sustain profits, suppliers are looking to offer end-to-end security solutions," Sharma noted. "As they do not have an integrated portfolio at present, market participants are quite likely to turn to mergers and acquisitions. Market consolidation will allow market players to expand their offer."