Leaderspeak on the business outlook for 2025 

Business leaders from a variety of sectors speak to businessline on the prospects for their sectors in the next year. Everybody is sanguine about the future 

Fast moving consumer goods

We recognise that consumer behaviour is evolving rapidly, driven by a combination of aspirations, economic shifts, and technological disruptions. Sustainability, premiumisation and personalisation are emerging as key trends in the industry. The channels are undergoing tremendous transformation with the consumer shifts that the industry is witnessing. We believe the urban consumption slowdown is a temporary phenomenon, and we expect it to stabilise in a quarter or two. Within urban areas, it’s largely the middle class and bottom of the pyramid segments that have been impacted by high food inflation; the upper end of the market is not impacted. Rural demand is positioned for sustained gradual growth as rising real incomes drive increased consumption.

We have strategically diversified our portfolio to align with evolving trends, with a sharp focus on premiumisation, sustainability and digital transformation. Foods, premium personal care, and digital-first brands now contribute 21 per cent to our top line, a significant leap from 6 per cent in 2020. This growth underscores the robustness of our direct-to-consumer ecosystem and our ability to capture value through digital channels. Brands like Saffola, Plix, and Beardo exemplify this transformation, with Saffola achieving ₹1,000 crore in revenue and Plix poised to hit ₹500 crore within three years. Our ability to integrate disruptions into our business model, coupled with a commitment to premiumising aspirational brands, continues to set us apart.

Looking ahead, we remain optimistic with the medium-term growth outlook for the industry being very much intact. We expect rural consumption to steadily grow and urban consumption to revive in a couple of quarters. We expect 2025 to be a better year for the sector and for us as we stay focused on accelerating the momentum of our diversification and capitalise on it. By combining portfolio innovation with a sharp focus on consumer needs, we are positioning ourselves to thrive in a dynamic environment and emerge as a strong consumer digital company.

Passenger cars and EVs

As we head towards 2025, we are optimistic about the growth of the Indian passenger vehicle market. Our goal is to build on our momentum, grow our market share, and bring exciting new SUVs to our expanding portfolio. In the electric vehicle space, we are focused on strengthening our leadership while tapping into the rising opportunities.

In 2024, the business scaled new heights with our highest-ever volumes. Our growth was driven by the success of our products with the Tata Punch emerging as the top model in the industry. On the operations front, we increased our product capacity in line with our growth aspirations, by operationalizing the newly acquired Sanand plant in record time.

With our multi-powertrain strategy, we launched the Nexon CNG which has yielded strong results this year, resulting in significant growth in CNGs, and consolidation of our market leadership position in EVs despite increasing competition.

The start-up eco-system

India’s start-up ecosystem has continued to deliver resilient and consistent progress despite a global correction in tech and private equity over 2023 and 2024. Rather than relying on growth at any cost, most start-ups doubled down on demonstrating stable unit economics, installing heightened governance frameworks, and planning for a common-sense path towards future financing and IPO readiness. This disciplined approach has helped many young companies weather persistent global uncertainties while demonstrating their growth potential.

If the early indications from the 32 VC-backed IPOs hold consistently, this shift in their behaviour is clearly being rewarded by India’s public markets. With a continuity of stable government, a pro-growth budget, and ongoing economic reforms, the broader environment has remained conducive to supporting India’s start-ups. The economy’s steady march past the $5 trillion GDP mark over the next few years has reassured investors that the long-term opportunity remains viable. This is a window of economic expansion that the best founders across the country will focus on to deliver value, and Indian entrepreneurs will see more domestic and global capital supporting their innovation life cycle.

Looking ahead, 2025 promises to be a year of regained momentum in global private markets. With US tech IPOs expected to resume and successful Indian IPOs providing consistency, Indian mid and late-stage funding should see renewed confidence from global investors. Founders demonstrating operational resilience through the past two years’ corrections, proving sustainable growth metrics and clear paths to value creation will be especially sought after. Given the general success of VC and PE-backed companies completing their listings in India, a clear signal has already been sent to private companies here on how the public markets will value their businesses.

We anticipate heightened sectoral momentum within India’s early and mid-stage ecosystem over 2025, driven by several key trends. As global trade patterns shift, Indian export-oriented producers will find more efficient pathways to enter new international markets. Increased attention to frontier technologies such as industrial automation, AI, medtech, semi-conductors, climate tech, and energy transition will fuel demand for solutions originating from India’s innovation corridors. Finally, evolving consumer aspirations and premiumisation will create new opportunities in established consumption categories.

We remain excited to invest in Indian entrepreneurship and are confident that the coming year will continue to challenge, inspire, and deliver meaningful opportunities for founders and investors alike.

Cement

The link between the state of the economy and industries like cement is well established. What is not discussed, at least openly, is its correlation with the overall state of the nation, which is a function of the political climate in the country. The slackness in demand for cement has been a casualty of the latter – though people may be shy of calling it out.

Elections in major states at the end of 2023 followed by an extended general election had a strong impact on infrastructure investments both by the Centre and states. The model code of conduct imposed before elections put a pause on government spending. These take time to resume after a new government assumes charge. Changing priorities of state government – with diversion of funds to welfare schemes also delays payments to contractors for rural infrastructure schemes and projects like PMAY, which has a cascading effect not only on demand for cement and construction materials but also on rural income arising out of such labour-intensive activities.

There was general expectation of improvement in the scenario post the general elections in June 2024. But the apparent political flux had the economy in limbo – not only in BJP-ruled states – but also in some opposition ruled states – such as Karnataka, Telangana – as is apparent in the latest GDP numbers.

The election results in Haryana and Maharashtra have lifted the political clouds, coupled with good monsoons and a bountiful harvest, confidence is on the rise again. The Union Budget – a little over a month down the line – is expected to give a boost to infrastructure expenses and push consumption. All this augurs well for the sector. The necessary base corrections having taken place in 2023-24 and a new equilibrium reached after frenetic consolidation – FY 25-26 is poised to start on a strong footing.

Consumer Electronics

India’s consumer electronics sector is poised for remarkable growth, with market demand projected to reach $21.18 billion by 2025. This growth will be driven due to adoption of products with higher energy efficiency and will be fueled by policies like PLI on the supply side. Other factors for expansion include increasing digital adoption, a growing middle class with higher disposable incomes, and increasing urbanisation, which is driving demand for advanced and connected devices.

Government initiatives such as the National Policy on Electronics (NPE) and the Production-Linked Incentive (PLI) scheme have been instrumental in fostering local manufacturing. The PLI scheme, through its targeted incentives, has catalysed large-scale production, positioning India as a global hub for consumer electronics.

The sector is further strengthened by increasing investments in local manufacturing and supply chains. India’s advancements in areas like 5G, smart home devices, and wearables are unlocking new opportunities for innovation and catering to the evolving needs of a digitally empowered population. Infrastructure projects such as smart cities and public Wi-Fi networks are also boosting the sector’s growth.

By 2025, India’s consumer electronics industry is expected to make significant contributions to the country’s GDP and job creation. With a supportive policy environment, a focus on cutting-edge technology, and an expanding domestic market, the sector is on track to solidify India’s position as a leader in global electronics manufacturing.

Two-wheelers

The year 2025 will be very exciting and interesting for the two-wheeler industry, building on its steady performance in 2024. The industry has grown ahead of the nominal GDP, and this is a good sign. Two wheelers are a necessity for the Indian household and the industry plays a critical role in economic growth.

The rural market is growing better than the urban in the 2W industry and this is a phenomenon happening after a long time. This is promising and indicates the future growth potential the country is set to witness. The monsoons have been as expected, resulting in water reservoirs reaching good levels. This is expected to bring in a good harvest season.

India is a diverse economy with interesting demographics. The young population of the country is a great strength, and the future stands bright for all of us. Road construction and infrastructure development are well supported by the government that would help the economy and consumption to grow. All this augurs very well for the mobility industry in India, especially the premium category.

Indian companies will continue playing a big role in the global mobility space. India will continue to be a major export hub for two-wheelers. We have a significant competitive advantage in manufacturing reliable, trustworthy, quality products. These are significant levers for sustained progress.

The transition into the usage of clean, green and energy efficient mobility solutions will continue, and EV adoption will steadily grow. The penetration of EVs is already going up and we have begun to see months where electric two-wheeler sales are crossing the 100,000 monthly sales mark. We must take this opportunity to thank the government for enabling the transition to electric vehicles. As TVSM, we will continue to invest for the future: investments in products, technology, software and employee capability. We remain very optimistic for the industry and expect TVSM to grow ahead of the industry.

Commercial vehicles

The automotive industry is currently undergoing a profound transformation, primarily driven by the concurrent evolution of 3 global megatrends: ACES (Autonomous, Connected, Electric and Software), Sustainability and Digital.

With sustainability becoming the central agenda for businesses across the globe, the shift towards greener mobility with alternate fuels as well as zero emission battery and hydrogen vehicles is gaining traction across multiple markets including India. Circularity is yet another important sustainability pillar for us, which can help the business become future-ready in the context of emerging regulatory requirements.

Rapid advancement in connectivity, software and artificial intelligence is leading to improved decision-making and increased efficiency. This will further accelerate innovation across multiple new opportunities such as connected and autonomous features, software-defined vehicle, customised bundled services offering improved vehicle usage through predictive maintenance as well as seamless ecosystem integration. Additionally, we are leveraging data analytics using AI/ML tools in our telematics-based platform, Fleet Edge. It is helping customers to improve their business, through real time insights on vehicle uptime and real world TCO (total cost of ownership). A pertinent example being Mileage Sarathi, our customised digital service that provides actionable insights to the driver on fuel economy improvement.

Airlines

The Indian aviation industry’s growth is extremely exciting, driven by the progression in India’s economic landscape. We are entering the golden decade of aviation and will witness increased growth and stability every year in the next decade. As air travel becomes incrementally accessible for a greater number of Indians every year, we are confident that the next year will bring sustained growth patterns, especially in the business and leisure travel segment. Supportive government policies and the continued push towards infrastructure including new airports will further support the capacity requirements. This expansion will benefit the industry players as well as customers providing them enhanced choice and connectivity.

In November 2024, domestic air passenger traffic reached a new milestone, exceeding 500,000 passengers in a single day for the first time ever. Domestic air passenger traffic in India in H1 FY2025 (As per ICRA), reached 79.3 million, and international traffic grew by a significant 16.2 per cent. At Akasa Air, we have registered healthy demand across our network, as attested by the fact that we have already flown over 14 million passengers since our inception. The consistent surge in demand across the industry and our unparalleled growth are a testament to India’s growth story and potential.