If trends are anything to go by, India is slowly drifting away from its love for cricket towards a wide variety of sports such as Kabaddi, Football, and Badminton among others. This has resulted in an unprecedented boom in viewership, participation, and sports-related industries.
This has translated into new business opportunities for investors that are looking at the Indian market, right from brand building to infrastructure to emerging technologies, to niche entrepreneurial ventures, and services.
However, one of the big drivers of this “Sports Revolution” in the country is the sports manufacturing industry. India’s amicable economic climate, a rise in disposable incomes, and changing outlook towards fitness are powering the rise in demand for sports-related goods and services. Add to that the favourable business climate generated by various efforts by the government such as Make in India, and the manufacturing sector is suddenly very optimistic in the country. (India has jumped from sub-100 ranking to 77 in the World Bank Ease of Doing Business rankings)
Investment opportunities in the sports industry are spread across the entire supply chain that includes the manufacturing, retailing, and advertising, of the equipment and apparel.
Indian Sports Industry’s Growth Drivers
The Indian government has specifically focussed on developing the country’s sports sector with a view of creating jobs, generating revenue, and consequently attracting investment into the country, aside from nurturing sports talent.
The federal government has set aside a budget of Rs 1,756 crore for its ‘Khelo India’ (Play India) program for the span of 2018-20. It is expected that up to 1,000 young athletes will be benefited by the program. It also envisions to rigorously promote participation in sports at various school and college level.
This is the single most important factor why sports equipment consumption in India is expected to increase manifold in the coming years.
Current Scenario of India’s Sports Equipment Manufacturing
At the moment, as much as 60 percent of all of India’s sports equipment manufactured here is exported. This is especially true with international retail brands like Mitre, Umbro, Lotto, and Wilson.
India is a labour-intensive economy and this is exactly what provides innumerable opportunities for sports equipment manufacturing firms looking to set up in the country.
Speaking numerically, over 500, 000 people are currently employed by the sports retail and manufacturing sector alone, with further potential to rise.
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Sports manufacturing is primarily concentrated near the north Indian states of Punjab and Uttar Pradesh whereas others like West Bengal, Gujarat, and Tamil Nadu are catching up fast. The federal government, under the ‘Make in India’ scheme, is also providing various tax and location-based incentives for manufacturers.
Case Study: Meerut
Meerut can be safely considered as the flag bearer for the sports equipment manufacturing. It is already famous as the world’s manufacturing hub for top quality cricket gear. However, the North Indian city is trying to diversify from this tag to accommodate other fields such as athletics, fitness, gym and other high-end equipment.
has supplied shot puts javelins in various prestigious competitions such as 2108 Jakarta Asian Games.
Today, Meerut plays host to 15 top brands in the sports equipment market, including weightlifting, sportswear, table tennis, gymnastics, fitness, and weight training.
According to the commerce ministry, the gross value of the sports goods exported in 2017-18 stood at ₹1,079 crores.
The Uttar Pradesh-city alone contributes to around 45% of India’s sports equipment export market. The Meerut industry collectively employs just over 25,000 workers, according to industry estimates, thus proving to be a major employer there.
The Emergence of Private Leagues
Over the years, sports has proved to be a solid and pure entertainer when it comes to fan engagement. As a result, in the last decade or so, India has witnessed a boom in the development of major private sporting leagues.
The trend that was started by Indian Premier League in cricket soon spread to other sports as well with Indian Super League (football), Premier Badminton League, Pro Kabaddi League etc., following the suit soon.
These leagues not only grew in size over the years, but their fan following expanded as well. A swollen fan base is a marker of two things- first a promising future for sports and secondly, an increase in revenue through allied sources. And indeed, one of those sources is merchandise sales.
Thus, the mainstream sub-sectors such as manufacturing and promotion are bound to snowball due to an ever-increasing demand for quality sporting goods.
The increasing presence of the private sector is aptly shaping investment as well as the collaborative practices in the Indian sports sector. Established Foreign organizations like Vivo, Nike, Nivia, and Adidas are investing heavily in niche sports like Kabaddi, Football, and Hockey through funding and sponsorships. This goes a long way in leveraging the brand recognition and advertising opportunities.
It goes without saying that this is the best time for the future investors looking to enter the Indian sports market, especially the sports equipment manufacturing industry, with favourable federal policies, audience and economic climate making for a low-risk proposition.
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