INDIA TO BECOME LARGEST SECURITY MARKET BY 2020

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and KPMG have jointly predicted that India, along with Britain, Germany and France will emerge as largest players in global Homeland Security Market as opposed to present situation wherein US continues to be dominant player with about 34 per cent of global procurement in this field, according to KPMG and ASSOCHAM.

India, which currently shares 3.6 per cent of global homeland expenditure will require to take it upwardly to an extent of 6 per cent over the next decade to effectively take on emerging security risks, hold both the ASSOCHAM & KPMG.

In a paper on ‘Homeland Security in India’ jointly prepared by the two institutions, it has been predicted that China, India, Turkey, Saudi Arabia and UAE are expected to exhibit the fastest market growth in this sector, driven by a combination of economic growth along with increasing threats of terrorism faced by these countries.

By 2020 about 6 per cent of global procurement in the field of homeland security is expected to be emanated from India, said ASSOCHAM President, Dr. Swati Piramal while releasing findings of the paper here today.

As per current estimates homeland security expenditure projection as a per centage of global spending in case of India is 3.6 per cent, France – 3.4 per cent, Germany – 3.7 per cent, Saudi Arabia – 4.5  per cent, UK – 3.9 per cent, China – 5.2 per cent, USA – 33.3 per cent as against 43 per cent of other countries, reveals the ASSOCHAM-KPMG paper.

It further points out that India offers a large potential for firms looking to leverage the opportunity manifested in this sector in the country on account of high GDP growth, challenging relationship with neighbours that are unlikely to resolve in the years ahead, ageing and obsolete equipment and high spending on modernizing military capabilities and industrial infrastructure.

A broad analysis of homeland security sector in India further highlights the key areas of private industry participation in this sector since, India’s economic growth is leading to greater focus on homeland security initiatives.

The government has also shown its commitment to enhance its security budget by 35 per cent which includes creation of dedicated homeland security department, developing co-ordinated intelligence gathering, protecting critical infrastructure and upgrading maritime security.

Homeland security sector in its current form is fragmented with no single Nodal decision making authority and current procurement processes are complex and need to be simplified to suite modern requirements.

The paper further points out that a significant market opportunity exists in several domains consisting of larger homeland security sector, such as police reforms, critical infrastructure protection and counter-terrorism activities.

Homeland security will have to enhanced further since India has opened up its nuclear sector post signing Civil Nuclear Co-operation Treaty with USA which is likely to create a large demand for nuclear/radiological mitigations approaches.

Nuclear market requirements will be extremely critical and India will have to spend a great deal to keep its nuclear installations completely fool-proof against all possible security threats.

An inadequate focus on homeland security of India can have multi-dimensional impact. It can have a considerable economic impact manifested in lower credit ratings for the country, negative branding through travel advisories impacting tourism and hospitality sector, portrayal of the country as an unsafe business destination and the consequent deduction in foreign investments.