India’s Sunrise Sector

January 15, 2025

General Studies Paper -3

Context: India’s G20 Sherpa, Amitabh Kant emphasized that India needs to excel in “sunrise sectors” to achieve the goal of becoming a developed nation and a USD 32 trillion economy by 2047.

About Sunrise sectors

It refers to a rapidly growing sector in its early stages with high potential for expansion.
These industries experience significant growth, a rise in startups, and attract substantial venture capital funding, making them appealing to investors for long-term growth prospects.

Sunrise sectors in India : Potential

Electronics and Semiconductors: India’s electronics industry is driven by initiatives like the PLI Scheme and SEMICON India Program.
- The semiconductor market is expected to triple by 2026, with a production value of $300 billion by FY26.
- Government schemes like the Modified Scheme for Semiconductor Fabs provide significant financial incentives.
- India is emerging as a global hub for electronics and semiconductor manufacturing.
Electric Vehicles (EV): India is promoting electric mobility with initiatives like FAME II and 100% FDI allowance.
- The EV sector has over 12,000 operational charging stations and is expected to see massive growth.
- The PLI Scheme for Advanced Chemistry Cells supports local battery manufacturing, driving down costs.
- India’s EV sector offers opportunities in manufacturing and infrastructure development while contributing to sustainability.
Renewable Energy: India aims to achieve 500 GW of non-fossil fuel-based energy by 2030.
- Initiatives like the National Green Hydrogen Mission and Offshore Wind Energy targets attract investment in green technologies.
- The sector benefits from favorable regulatory frameworks, R&D promotion, and international collaboration.
- India offers substantial opportunities for investors in the clean energy transition.
- India’s solar panel manufacturing industry is 5-7 years behind global standards.
Agro and Food Processing (A&FP): Programs like Pradhan Mantri Kisan Sampada Yojana and liberalized FDI norms create investment opportunities in agriculture and food processing.
- Schemes like the PLI Scheme for Food Processing Industry incentivize investment in food infrastructure.
- India’s agricultural sector offers potential for value addition, exports, and food security.
Healthcare : India’s healthcare and pharmaceutical sectors are poised for growth, with the medtech industry expected to reach $50 billion by 2025.
- Initiatives like Ayushman Bharat focus on improving healthcare accessibility and affordability.
Pharmaceuticals: India’s pharmaceutical industry, known for vaccine production and generic medicines, offers robust investment opportunities.
- The sector benefits from favorable conditions like 100% FDI allowance and supportive infrastructure.
Artificial intelligence : AI and ML are transforming industries globally, with India well-positioned to capitalize on these technologies.
- They are being applied across industries such as healthcare, finance, education, and manufacturing, fostering innovation and efficiency.

Challenges Facing Sunrise Sectors in India:

Inconsistent policy implementation and frequent changes create uncertainty.
Delays in approvals and fragmented regulations hinder investment and growth.
Insufficient infrastructure, especially EV charging stations and renewable energy grid integration.
Lack of substantial investments in research and development (R&D).
Shortage of specialized talent in fields like AI, renewable energy, and EVs.

Conclusion and Way Forward

India’s sunrise sectors offer compelling investment opportunities due to strong human resources and supportive government policies, including 100% FDI under automatic routes.
These sectors provide robust growth potential, economic prosperity, and avenues for sustainable development, making them attractive destinations for investment.

Therefore, overcoming regulatory, infrastructure, technological, and financial challenges is crucial for unlocking the potential of India’s sunrise sectors.