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| An IMS study predicts that the Indian security market in video surveillance is set to grow in the coming years |
Without fear of hyperbole, the Chinese video surveillance market is phenomenal. It's the largest consumer of video surveillance equipment and one of the fastest growing markets. City-wide deployments of 100,000+ cameras are not uncommon, dwarfing even the largest European or US ‘enterprise' projects. Can India, with its fast economic growth, huge population, and burgeoning middle-class; mirror its neighbor?
The Indian video surveillance market is currently one-tenth the size of the Chinese market (an estimated $165m in 2010). It is growing quickly, particularly the IP segment, and is receiving government funding. However, much of the growth in recent years in China has been fueled by its government's desire to keep a close watch over its population. It's highly unlikely that India has the political or financial motivation to deploy large scale public surveillance projects to the same degree as China, thereby reducing the potential growth of the video surveillance market.
Will this lack of politically motivated use of surveillance technology curb India's growth, or can it match China in other verticals? Retail is one market where video surveillance typically gains traction with its use having a demonstrable ROI. But there is a problem. The Indian retail market is largely closed to foreign firms, with foreign direct investment (FDI) restricted to 51% in single-brand retail and FDI for multi-brand retail limited to cash-and-carry and wholesale operations. Without foreign investment, development of the retail sector from farm to store will be bottle-necked in India.
Video surveillance is an important part of infrastructure projects which aims at enhancing security in commercial and residential buildings |
Over the summer in 2010, the Indian Consumer Affairs Ministry recommended that 49% FDI be allowed in multi-brand retail, with an emphasis on back-end operations such as logistics. US President Obama echoed this message in a recent meeting in Mumbai, stressing the need for foreign investment and the mutual benefits to both Indian and American firms. However, a decision has yet to be taken by the Indian Government and independent observers do not expect the situation to change until 2011. Should FDI be realised in 2011, the trickledown effect could see spending on video surveillance equipment in retail soar in the mid to long-term.
Video surveillance spending typically follows capital investment in infrastructure projects, and India is no exception. Currently, India is a little over halfway through its eleventh five year plan (2007-12). The five year plan is a government roadmap designed to improve the economy, social conditions, the environment and infrastructure. With regard infrastructure, a little over 5% of GDP was targeted for infrastructure spending during the tenth plan, with this rising to 7.5% in the eleventh plan. In order to sustain the targeted growth in manufacturing, agriculture and services, nearly 10% of GDP is thought to be needed during the twelfth plan. Based on these figures, it is clear there will be sustained investment in video surveillance related to roads, airports and railways.
A sad reality of the terrorist attacks in India has been the heightened need for security and protection. In a move not dissimilar to other countries that have suffered terrorist attacks, India's government has approved homeland security spending to improve the country's effectiveness when dealing with crises. Whilst it is difficult to assess how much budget will be made available for video surveillance, it can be assumed that, as with other nations, some funds will be earmarked for the protection of transportation hubs and critical infrastructure. This will undoubtedly prove a boon for the expanding video surveillance market.
Optimistically, India has huge potential for video surveillance. Positive economic indicators and an increasing need for security are necessary conditions for an explosion in use of video surveillance. However, it seems clear that the Indian tiger won't slay the Chinese dragon for some time to come.
