India’s economic brilliance: fuelling explosive growth in the coatings industry and beyond

The Indian economy is seen as one of the leading lights the world over. Why do you think this is the case?

The Indian economy has now consistently been the world’s fastest-growing large economy for the last three to four years. This has been largely due to the continued growth of the services sector, and a resurgence of the manufacturing sector. The business-friendly policy regime of the government of the day, the growing influence and statesmanship of India in the global socio-political scenario, and the de-risking of global supply chains all make India a much stronger and reliable partner for the entire world. India has had traditional strengths like a large, productive and skilled work-force in the median age-bracket of 21-60 years of age, a strong judicial system and IPR regime, and a democratic structure of governance. India is now the fifth-largest economy in the world, and poised to become the third-largest global economy in the next decade. It is also the most attractive destination for foreign investments. The existing base of domestic consumption and the local economy is now being augmented by Exports, which are slated to reach nearly EUR 1 trillion very soon. India has also committed itself to ensuring that this growth comes with responsible environmental care. All of these factors mean that in a world of instability and challenges, India shines as a beacon of stability and progress, with good long-term prospects.

Does this positively impact the Indian coatings Industry – if so, how?

The Indian coatings industry has had a largely linear relation with the overall Indian economy, and has grown between 1.6-2.0 times that of the country’s GDP. Some of the parent industries driving forward the paint industry’s fortunes are also those boosting the economy like construction and automotive. The higher disposable income and purchasing power of the large Indian middle-class, numbering over 400 million people also boosts consumerism which is again linked to the growth of the coatings industry. The heavy spend of infrastructure by the government is another factor that boosts this impressive growth of the Indian Coatings Industry. The Indian coatings Industry is today worth over EUR 9 billion, growing at about 14 % CAGR, and promises to sustain this growth, doubling in value within the next five to six years, and hence reaching nearly 10 % of the global market size very soon.

We are seeing a burst of growth in manufacturing in the Indian coatings industry. Can you describe this and explain the reasons for the same?

As described above, the Indian coatings industry is already sitting on a very solid base of size and future growth. As a result, we are seeing all the existing players expand capacities significantly. This is to cater to the burgeoning demand foreseen, and also have a better geographical footprint across the country (remember India is a large country). This is true of the home-grown Indian players, as also multi-nationals, and not only of large players, but also the medium and small sector, which is also a beneficiary and participant in this growth story. Additionally, we also have many new players entering the paint industry. Many of them are large and listed companies, who are looking at paints (architectural coatings, in particular, which constitutes about 77 % of the total Indian paint industry) as an extension of their current businesses in the construction space (steel, cement, pipes, etc). We are talking of capex commitments to the tune of over EUR 3.7 billion in the next three years or so by all these players. Given the fact that these are companies who would invariably do deep due diligence, it augurs well for the Industry to see the immense potential and belief over the next decade and more. The growth in manufacturing, mobility and infrastructure in the country is also spurring investments in the Industrial coatings segment. Powder coatings is seeing the fastest growth across coatings segments in the country. All in all, it points to an explosive and equitable growth in the coatings industry in India, with a large pool of participants (India has over 3,500 paint manufacturers).

Do you also see an up-tick in the fortunes of the Indian raw material and equipment manufacturers?

The above base, and potential for both organic and inorganic growth in the paint and coatings Industry evidently means a huge demand for raw materials as well, given that the contribution of raw materials in our industry is almost 65 % of the total value. Imports of raw materials are still a significant component with over 35 % of the raw material requirements being imported. At the same time, the attractiveness of the market allows for local manufacturers to invest into capitalizing on this demand and look at import substitution. On the other hand, the ground is also ripe for overseas players to also set up their manufacturing base in India, especially with the various incentives and schemes in place for the same. One should also understand that India is now preferred sourcing hub not only for domestic consumption, but also exports to other countries. India’s port infrastructure and geographical advantage promises to see many new investments in the near future. Another important factor and trend would be inorganic growth in this segment, with merger and acquisition opportunities. Likewise, the increased focus on manufacturing and new capital investment cycles also augur well for the equipment sector.

Could you please elaborate what one could expect from the upcoming PAINTINDIA Exhibition in the light of the above narratives?

The PAINTINDIA Exhibition is one of the leading trade shows for the paint and ink manufacturing industry in the world and a leader in the South Asia region. For this upcoming edition – PAINTINDIA 2024 – to be held at Bombay Exhibition Centre in Mumbai, India on 22-24 February 2024, we are looking at nearly 600 exhibiting companies and anticipate over 20,000 serious business visitors in attendance. All of the above factors that describe the positive business atmosphere, both in general and also specific to the coatings industry, means that the excitement and expectations from the event are as high as ever. We believe that not only will all stakeholders from across the value chain in the whole of India congregate at the Show, but also see a significant amount of overseas visitors, who now see India as an important business and sourcing destination. The obvious business element at the trade fair will be augmented by conferences and technical sessions. We look upon PAINTINDIA as the world’s window to the Indian coatings industry, and invite the entire global coatings community to come and witness the magic and benefits on offer.

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