Indian security sector predicts strong growth
Tim Compston, features editor at SecurityMiddleEast, looks east as demand for security in India reaches new heights.
With the Times of India reporting in December 2014 that, according to the Central Association of the Private Security Industry (CAPSI), the market size for private security services in India is set to double by 2020, we investigate what is driving the unprecedented growth across the country’s security sector. We also speak to security experts on the ground, overseas vendors, and researchers – like IHS – to see how this positive prediction tallies with their own views and experiences of India.
For those vendors who have not yet considered India perhaps now is an opportune moment to put the country, whose economic output already exceeds that of the UK, back on their business radar. In fact, over the past 16 months, the country’s growth has outpaced all other BRICS countries. According to the ‘Trade and Development Report – 2015’ by the United Nations Conference on Trade and Development (UNCTAD) India’s economy was expected to expand by 7.5 percent in 2015.
Moving forward, the outlook for India also appears much brighter than the Chinese economy which is experiencing some hiccups, Brazil which is literally going into freefall, and Russia that has its own oil-price related struggles to contend with. Alongside this it is encouraging to see some of the barriers which, historically, held back overseas concerns from selling their security solutions to India slowly falling away under the more ‘open’ approach to business instigated by Prime Minister Narendra Modi.
For his part, Manish Gandhi – chief editor of the respected security magazine a&s India – is well placed to offer a perspective here. He agrees that the Indian security market is racing ahead with even conservative estimates showing a rate of 40 percent growth year-on-year. Touching on what is fuelling this surge he singles out three key pillars: “Proactive government policies, public awareness, and a booming economy. The new government at the centre has launched various ambitious programmes like ‘Smart Cities’ and ‘Safe Cities’,” he says. Added to this, Gandhi reports that the domestic Indian security market has developed even further on the back of India’s IT boom: “Once the IT industry consolidated there were many business leaders and entrepreneurs who planned a foray into the security sector.”
Drawing a picture of the way the Indian security market is structured, Gandhi explains that it is basically divided into a number of distinct segments: “The top segment belongs to homeland security, critical infrastructure, city surveillance, transport, safe city solutions. The middle segment belongs to education, hospitality, real estate, retail, healthcare, leisure, entertainment and the sports verticals. The lower segment is the mass market which is driven by low price analogue CCTV solutions.” On the question of whether there is more interest being shown in integrating a number of security elements together over IP, Gandhi replies that all large and strategically sensitive projects are now following this IP trend.
Speaking to John Davies, chairman of the British Security Industry Association’s Export Council – and managing director at TDSi – for a UK viewpoint, he says that although TDSi isn’t active in the market he is weighing up the potential of taking a second look: “It must have been five or six years ago that we decided with all of the customs duties and tariff barriers on imported goods that our kit wouldn’t be competitive – the tariffs were just too high. Over the last couple of years the whole psyche of the Indian market has started to change, they seem to want to be more open, and it has been strongly suggested that we actually re-look at things.”
From his earlier experience, and that of BSIA Export Council member companies working there, Davies is quick to warn that you can’t just dip your toe in the water and expect an instant return: “It takes time to get established and you also need the right partner. So India is not for the fainthearted.” Manish Gandhi from a&s India magazine agrees with Davies that you really need to ‘understand the market dynamics’ and, when a security solution is found to be viable, the best way to proceed is to ‘tap market opportunities through an experienced and professional local partner.’
Although we have witnessed a plethora of city centre terrorist attacks over the past 16 months these pale in comparison with what happened in Mumbai, India, back in November 2008 when coordinated shootings and bombings resulted in over 160 deaths and hundreds of injuries: “The 26/11 Mumbai terrorist attack had a huge impact on government policy and public perceptions about safety and security,” recalls Manish Gandhi from a&s India magazine.
“The Mumbai City Surveillance Project was part of the recommendations of the Pradhan Inquiry Commission which was appointed by the Maharashtra Government to probe the response to the 26/11 terror strike,” he says. Gandhi goes on to explain that the Mumbai City Surveillance Project is now being implemented: “It is one of the biggest city surveillance projects in India so far.” Asked about reports drones are also being deployed for surveillance in Mumbai, Gandhi confirms that this is limited to specific events like the Ganesha festival.
Homing in the video surveillance element of the market, Jon Cropley – principal analyst, video surveillance at IHS, who authored a report on ‘CCTV and Video Surveillance Equipment’ confirms that this aspect of the Indian market topped the $300 million for the first time in 2013 after a decade of rapid growth, albeit from a relatively small base. To put the size of the Indian video surveillance market into a wider context, Cropley reveals that the value is about a tenth that of the EMEA market. Interestingly, Cropley confirms that Indian is reliant on imports as very little of the equipment that is installed in India is actually made in India: “There are only one or two local vendors.”
Turning to British video surveillance specialist IndigoVision, according to Vishal Kapoor – IndigoVision’s country head for India, it has had a presence in the region for about eight years. “Originally the majority of products were actually encoders converting analogue cameras into IP,” says Kapoor. For IndigoVision it was the oil and gas sector which predominated in the early days.
Fast forward three years, from IndigoVision’s market entry, and the company was flying high after landing a video surveillance solution deal for the new Terminal 3 at Delhi International Airport (DIAL): “This is still very much our flagship project or ‘crown jewel’ in India. Delhi airport was an end-to-end IP solution of 3500 plus cameras, our management software [Control Center], real-time analytics, and storage. India was hosting the Commonwealth Games and with international visitors a much bigger airport [the largest in private hands] was required and it was wanted to future proof the infrastructure,” reports Kapoor. He stresses that what helped IndigoVision win out over stiff competition was the ability to offer an end-to-end solution and, because of the technology involved, give the airport a 40 percent reduction in storage costs and bandwidth requirements.
Working on such a high profile deployment, says Kapoor – alongside experience in oil and gas and the railways – has certainly helped IndigoVision win other major projects, with a 70 – 30 split between the government and private sectors.
Banking on success
Taiwan-based VIVOTEK is another company with its sights firmly set on India, a case in point being the announcement this month of the successful installation of 132 VIVOTEK network cameras at the headquarters of Cosmos Bank, the second oldest and second largest bank in India. “Banking is an important segment as our [the Indian] economy has started growing and huge expansion is expected,” says Sanjeev Gulati, country manager for India and SAARC (South Asian Association for Regional Cooperation) at VIVOTEK.
In the end, with an economy firmly in the fast lane, there seems to be no holding back the Indian security sector, a dynamic which a&s India magazine’s Manish Gandhi expects to draw in record numbers of visitors and exhibitors to Secutech India whose 5th edition is being staged in Mumbai April 2016: “The ‘Smart Cities’ and ‘Building Management’ solutions segments will be a key focus,” confirms Ghandi.