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India retains many of the qualities that made it one of the most dynamic economically developing countries in the early 2000s. However, a lack of investment and continuing social division stunted its development in recent years, especially when compared with Brazil and China — other BRIC nations. Whilst other nations have invested heavily in infrastructure to drive economic growth, India has failed to match the internal level of investment needed to drive its economy, although it still enjoys healthy gross domestic product (GDP) growth. Its GDP has declined dramatically in recent years — from x % in 2010 to x % in 2012. This decline continued in 2013, when a x % GDP marked a new low for its economic growth.

The decline in India’s economic outlook is a result of high borrowing costs for corporations and a construction slowdown, which has affected not only the housing market but also infrastructure improvements. The lack of infrastructure has had the biggest impact; if India cannot redress this, economic growth will be further affected. This lack of infrastructure development was highlighted in the World Economic Forum’s Global Competitiveness Report 2013–2014, which benchmarks the economic strength of x countries based on a series of criteria. In this study, India’s mass transport infrastructure (roads, 84th; railways, 19th; ports, 70th) and provision of basic utilities (electricity supply, 111th) resulted in a ranking of 85th out of x nations for critical national infrastructure (CNI).

Whilst India still had a GDP of $ x trillion in 2013, if growth rates continue to fall the country’s ability to compete internationally will decline. Construction of basic utilities is directly linked to India’s economic evolution; without continued construction, opportunities available to international security producers will decrease. The government is trying to better address its infrastructure needs, however. It is planning to invest $ x billion yearly in energy production sites until 2017, and large-scale investment has been made in improving public amenities, transport, and urban areas. Continuing internal violence and a terrorist element in the north of the country will drive security investment in these new infrastructure projects, with the promise of further spending. This mixture of new construction and upgrades of existing facilities will create a wealth of opportunities for international suppliers willing to engage in this complex and competitive market.

The purpose of this study is to assess infrastructure development across a range of key sectors and analyse the impact it may have on international security suppliers looking to enter the market. Whilst the current economic downturn may cause some investors to look at other countries in Asia, India’s strength and importance on the world stage combined with its infrastructure push mean that opportunities will be available for security providers willing to invest in the market now.

National Security Strategy

Although India has a number of prominent domestic and foreign security issues, the country still lacks an official national security strategy. Although the advisory role has been given solely to the Indian National Security Council, several factors have hampered the creation of a unified security strategy. Perhaps the most important is the lack of political consensus about the most pressing security issue. As a result, government policies tend to be driven by response to a specific event.

Another key issue is a fundamental lack of security coordination within the government. Although the installation of the National Security Council (NSC) in 1998 has helped to guide national security policy, the organisation lacks any real power to pursue or enforce its recommendations. The NSC’s recommendations are primarily formulated for the country’s political elite rather than the Indian military, which bears the responsibility for enforcing national security measures. As long as these two institutions remain separated, there will be a lack of uniformity between national security recommendations and practical military strategies.

However, core security concerns can be broken down into the following areas:

- Continuing to protect civilians from domestic terrorist elements (including threats from the Kashmiri insurgency and Maoist terrorists)
- Investing in the Indian military to better protect the nation from developing domestic and international threats
- Defending the nation from Pakistani and Chinese interference, attack, or encroachment
- Ensuring the integrity of India’s borders and territory

As India continues to develop both socially and economically, it will become increasingly important for the government to come to grips with the issue of domestic terrorism. Although much of the violence is restricted to the north of the country and the Kashmir region, violence continues to affect large areas of the nation. Between 2010 and 2014, x people were killed as a result of terrorism in India (including in the disputed Kashmir region) with x of these fatalities being civilians. Although this is much lower than the toll in the late 1990s and early 2000s, domestic terrorism still will be a key consideration in formulating national security policy.
The issue for Indian decision makers is resource allocation, with both international and domestic security concerns commanding the attention of politicians and military chiefs. The national defence budget increased to $ x billion in 2014 (almost x % more than 2013). Also important is the $ x billion allocated for the procurement of weapons and equipment in 2014, which represents India’s commitment to enhance and upgrade its military capability to better match other nations — China in particular.

The relevance for international security providers cannot be understated as the military is one of the country’s biggest customers for security-related systems and equipment. As the country begins to better address its domestic security needs, international security producers will be in a strong position to supply effective technologies and systems to protect civilians and industry from attack.

Infrastructure Development Overview

As India’s economy continues to grow, its underinvestment in infrastructure has become more apparent. The targeting and effectiveness of infrastructure spending has been lower than required to drive economic growth and meet citizen demand. This, combined with more challenging market dynamics as a result of the global financial crisis, has resulted in lower year-on-year GDP growth over the last x years and has left India with the need for $ x trillion in infrastructure improvements in order to continue its rapid economic growth (as laid out in its 12th Five Year Plan).

In the face of mounting investment needs, the government has relaxed foreign investment rules over the last 10 years and has more recently looked at privatising infrastructure elements. Foreign governments and private companies have shown interest in accessing the infrastructure market. Most recently, China has offered to finance $ x billion2 worth of infrastructure projects in the country, and the Asian Development Bank approved $ x million3 in project loans. The effects of infrastructure growth on international security providers are prolific, as a growing construction market will lead to an increase in security technology procurement. This will be most felt in critical infrastructure segments as the government and private industry look for long-term safeguards against environmental damage and terrorist attack. The lack of infrastructure and the delay of major projects have become highly politicised. India’s ruling Bharatiya Janata Party (BJP) has pledged construction of new highways and better transportation to enhance business mobility, and proposed the creation of 100 new cities to meet the country’s growing urbanised population (as laid out in its 2014 manifesto).

Work has already begun to clear a substantial backlog of infrastructure projects. In total, x projects at a value of x trillion rupees ($ x billion) were allowed to start in 2013 after government bureaucracy forced them to stall. Bureaucracy remains one of the biggest factors hampering development, and must be considered in any security company’s decision to enter the Indian market.

The country is in the midst of its 12th Five Year Plan to drive infrastructure development between 2012 and 2017. Since 1951, India has developed a succession of infrastructure creation plans, each covering a 5-year period. Beyond helping to drive infrastructure growth, these plans also set economic growth and social development goals. For example, the 12th plan calls for an average x % to x % growth rate in major industries, with the goal of an x % growth in construction (specifically centred on transport, storage, and communications).
Infrastructure creation and improvement of national services continue to be a major focus for the Indian government. Construction will allow the country to retain its strong position in a volatile global economy. This combined with India’s complex security concerns means that opportunities will be widely available for international security suppliers that are already active in the country, though the opportunities may come with operational difficulties.

Airport Security

Airport upgrades command significant investment and public interest as the country modernises and its economy grows. Because of the country’s size, air travel is important not only for tourism but also domestic commerce. India’s airports are expected to accommodate x million domestic passengers and 85 million international travellers by 2020, resulting in a $ x billion market for security technologies through 2016.
This focus is epitomised by the upgrade of airport management systems at x sites, with a total project cost of $ x billion. This 7-year program is instrumental in increasing airport capacity; as a result, increased security investment is likely. These investments may come in the form of closed-circuit television (CCTV) and security integration or an increase in perimeter control systems. For example, as part of the $ x billion project for construction of a second terminal at Mumbai International Airport, Unisys integrated a range of security and perimeter control systems, including the installation of x cameras throughout the terminal and surrounding road system, and x sensors as part of a fire detection system.

Table Of Contents

Indian Security Market Assessment : Infrastructure and Security Evolve to Meet Citizens’ Needs
Synopsis 3
National Security Strategy 4
Infrastructure Development Overview 5
Domains 6
Airport Security 6
Oil and Gas 9
Border and Maritime 11
Mass Transit 15
Border Control 18
First Responders and Safe Cities 20
Utilities and Water 24
Major Events 26
Competitors and Partners 28
Country Attractiveness 34
Route to Market Strategy 36
Conclusion 38
Legal Disclaimer 39
Appendix 40
The Frost and Sullivan Story 40

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