India’s sports sector attracts foreign investors

From making sports development more transparent and accountable to framing robust policies, enforcing regulations and encouraging corporate funding, India’s sports sector has undergone major transformation; This has opened up investment opportunities for a variety of industries

May 2, 2018

Winning 26 gold medals, India came in third amongst the 71 participating nations at the Commonwealth Games 2018; This success has put a spotlight on the excellence achieved in augmenting India’s sports capacity

With average age of 29 years, India is all set to become the world’s youngest country by 2020 and the world’s most populous country by 2024, providing India with human resources to build a sports powerhouse

Rising popularity of sporting events such as the Indian Premier League, Indian Super League (ISL) and Pro Kabaddi League (PKL), the Government is keen to promote foreign investment in the country’s sports sector

Buoyed by increased interactions with the global sporting community, the Indian Olympic Association is all set to bid for three big events – 2026 Youth Olympics, 2030 Asian Games and 2032 Summer Olympics

India’s stellar performance at the recently-concluded 21st Commonwealth Games (CWG) in Australia has put a spotlight on the excellence achieved in augmenting India’s sports sector. With 26 gold medals from a cross-section of disciplines, India came in third amongst the 71 participating nations. The 216-strong Indian delegation had won a total of 66 medals, including 20 silver and 20 bronze. Congratulating the winners, Prime Minister Narendra Modi said that India’s success at 2018 CWG 2018 would motivate more youngsters to pursue sports, creating larger awareness about health and fitness. PM Modi added that the Government was doing everything possible to strengthen the “Fit India” movement. From making sports development more transparent and accountable to framing robust policies, enforcing regulations and encouraging corporate funding, India’s sports sector has undergone major transformation. Indian Government’s focus on a broad range of sports disciplines has also opened up lucrative investment opportunities for a variety of industries.

Concerted efforts by Government

Over the last couple of years, the Government has made concerted efforts to augment the sports sector. For instance, for the first time in the history of Indian sports development, a sum of US$15 million was spent for the training of Indian athletes for the CWG 2018. With more private bodies contributing to the National Sports Development Fund (NSDF), 200 athletes could receive funding as well as access to world-class training this year. At the policy level, “Khelo India”, the national programme for development of sports, has also been yielding commendable results. The initiative aim to provide quality infrastructure in rural as well as urban areas and encourage a sporting culture across the country through the Rajiv Gandhi Khel Abhiyan and the Urban Sports Infrastructure Scheme, respectively. The National Sports Talent Search System Programme, on the other hand, has focused on identifying and promoting talent across different age groups. Given that Indian Railways and Defence sectors are the biggest contributors to sports development in the country – particularly in disciplines such as hockey, weightlifting and shooting – the Government is making conscious efforts to encourage employment, retention and promotion of sportspersons at work. This eases the financial responsibilities of sports enthusiasts while exposing them to advanced training facilities.

India’s untapped youth resource

With an average age of 29 years, India is all set to become the world’s youngest country by 2020. In another four years, by 2024, India will be the world’s most populous country. Of the 1.3 billion population, a promising 67 per cent is below 35 years of age. In other words, India has the human resources to build a sports powerhouse. However, for India to be able to tap into its biggest resource, the broader Indian society needs to change its attitude towards sports and encourage more youngsters to take up sports at a professional level. Herein, the landscape has gradually been improving, especially with the emergence of several privately-funded sports leagues across India that cover cricket, football, hockey, tennis, kabaddi, among others. These ventures have also offered lucrative investment opportunities to foreign entities. Meanwhile, the Government has been making attempts to develop a progressive sports culture, whereby sports and physical training are regarded as integral parts of the education system. From developing team spirit and strategic thinking to inculcating leadership skills and risk-taking abilities, the benefits of playing sports are being highlighted at the school level.

With the rising popularity of multi-sporting events, such as the Indian Premier League (IPL), Indian Super League (ISL), Pro Kabaddi League (PKL), Premier Badminton League (PBL) and Hockey India League (HIL), International Premier Tennis League (IPTL), the government is keen to promote sports entrepreneurship in the country

 

Promising business potential

With the rising popularity of multi-sporting events, such as the Indian Premier League (IPL), Indian Super League (ISL), Pro Kabaddi League (PKL), Premier Badminton League (PBL) and Hockey India League (HIL), International Premier Tennis League (IPTL), the government is keen to promote sports entrepreneurship in the country. Other up-and-coming sports leagues include the Ultimate Table Tennis (UTT), Super Boxing League, Super Fight League, Indian Cue Masters League and P1 Power Boating. These ventures, besides generating public interests in non-cricketing sports, have opened up vast opportunities for a cross-section of investors. The Arena, Asia’s biggest and India’s first integrated convertible multi-sports facility in Ahmedabad, is a fine example of the massive potential of Public-Private Partnership (PPP) in sports. Traditionally, sports has not been counted among the most sought-after business opportunities in India. However, the scenario is fast changing today. Whether it is encouraging foreign investment in sports sponsorship, retail or exploring the PPP model for setting up sports academies and building sports infrastructure, the potential of this sunrise sector is hard to overlook.

The Ministry of Youth Affairs and Sports has signed preliminary agreements with Australia, France, Hungary, Kazakhstan, Kuwait, Maldives, Mauritius, the Netherlands, New Zealand, Seychelles, Turkey and Turkmenistan to organise sports events, conferences, training and coaching as well as to facilitate business collaborations in sports, among other things. India’s sports promotion industry expanded by 14 per cent in 2017 to cross US$1 billion. While cricket remains a multi-billion industry backed by numerous foreign investors, the many recent global achievements of sportspeople from non-cricketing fields have led to a spike in popularity of those disciplines. India has also been hosting global sporting events such as the 2017 FIFA U-17 World Cup that has helped in attracting international interest to India. The 17th edition FIFA U-17 World Cup held in India was the most attended in the sporting event’s history. This indicates towards the vast growth opportunity that awaits foreign investors in India’s sporting scene. Many leading media, consumer and sports management and promotion brands are already betting big on India’s sports sector.

With improvement in overall economy, Indian sports industry is achieved to clock in stronger growth in the coming years. The development of the sector comes in the backdrop of the country’s renowned sports strong goods manufacturing industry that has been catering to the international market for close to a century. Export of more than 60 per cent of the industry’s production, including inflatable balls, cricket bats, rugby balls, sports nets, gymnasium and athletics equipment, has helped seal India’s relations with strategic global partners such as the UK, the USA, the UAE, Australia, South Africa, Germany, Canada, France, the Netherlands, among others. In financial year 2016-17, sports good exports were pegged at around US$228 million. Indian sports products have been exported for global events. The nation has emerged as the leading international sourcing destination for inflatable balls and other sports goods for international brands such as Mitre, Lotto, Umbro and Wilson, thus offering new and expanded business opportunities.

The road ahead for Indian sports

India’s National Sports Policy emphasises on the twin objectives of “broad-basing” sports disciplines and “achieving excellence in sports at the national and international levels”. With the urban-rural gap in terms of finding sporting talents and providing them with world-class facilities having been significantly bridged over the last couple of years, Indian athletes are gearing up for the Asian Games later this year and the 2020 Tokyo Summer Olympics. In fact, buoyed by India’s increased interactions with the global sporting community, the Indian Olympic Association (IOA) is all set to bid for three big-tickets events – 2026 Youth Olympics, 2030 Asian Games and 2032 Summer Olympics. The success at CWG 2018 has reignited dialogue regarding how to maximise opportunities in India’s vast sporting scene. Increasing foreign funding and interactions have already helped hone sporting talents while developing sports promotion and management startups in India. Additionally, India continues to grow as a lucrative market for promotion and sale of foreign sporting events such as the Premier League, Formula One, Tennis Grand Slams, FIFA World Cup, which has further helped in building India’s image as a sporting destination. Improving economy and market dynamics in the coming years will further improve opportunities in India’s sports industry.