Budget 2022 - Business Opportunities
Build where the government is investing their (our?) money!
Each week we share business ideas and opportunities that you can use to build your next big business. You’ll also find tweets, articles and a lot more to keep you updated on the latest business trends.
This week you will find:
Budget 2022 - Business Opportunities
TID’s 3-2-1 (3 Tweets, 2 Podcasts, 1 Article)
Budget 2022 - Business Opportunities
At The Indian Dream, we’ve made it an annual tradition to break down the Budget Speech by the Finance Minister and find the hidden gems of business opportunities within the speech. Not every opportunity in the Budget may come to pass but it shows us some unique growth areas that may have been hideen from us before. For example, the 2021 Budget Speech was the reason we first researched about Seaweed Farming which became one of our most popular episodes in 2021.
What opportunities did you spot in the budget speech?
Business Opportunities we Spotted
👉🏻 Ethanol & Fuel Blending
Blending of fuel is a priority of this Government. To encourage the efforts for blending of fuel, unblended fuel shall attract an additional differential excise duty of ₹2 per litre from the 1st day of October 2022.
Fuel blending is quite simply the process of mixing two or more different kinds of fuel. India is heavily dependant on imports of fuel - hence Fuel Blending will help reduce the foreign dependance especially as our demand for fuel continues to increase. The most common form of Fuel Blending is a mixture of 10% Ethanol and 90% Petrol - called E10, 98% of U.S. gasoline contains this blend.
We’re already seeing some of the biggest sugar manufacturers in India setting up Ethanol production plants. Check out the table below for the segment analysis of Balrampur Chini Mills Ltd..
Ethanol is listed under the heading ‘Distillery’. It contributed to only 14.4% of the revenues in FY21 but contributed to 50.5% of the profits in the business.
As a result, Balrampur Chini is investing 205cr to expand its Ethanol production by another 20%.
👉🏻 Electric Vehicles & Battery Swapping
Considering the constraint of space in urban areas for setting up charging stations at scale, a battery swapping policy will be brought out and inter-operability standards will be formulated. The private sector will be encouraged to develop sustainable and innovative business models for ‘Battery or Energy as a Service’. This will improve efficiency in the EV eco-system.
We’ve been talking about Battery Swapping since Nov. 2020 and are happy to see movement in this direction.
The reason Battery Swapping even exists as an idea is because batteries account for 40-50% of the cost of a new Electric Vehicle. Without having to make the initial capital investment for a battery, the cost of Electric Vehicles can drop significantly, thus making it much easier for people to buy their first ever Electric Vehicle. Post-purchase, consumers can pay a monthly rental for access to the batteries.
The most important piece in this puzzle will be the ‘inter-operability standards’ - without this, consumers, manufacturers and battery operators will suffer as everyone will be confused about which standards to use.
Opportunities that open up with Battery Swapping
Build the tech stack for Battery Operators - new-age petrol pumps.
Build batteries in India. Most of India’s batteries are still imported from China. This article provides an in-depth review of the current state of Lithium-ion battery manufacturing in India and the government incentives to build capacity.
Build components for EV manufactuers - EV adoption should accelerate with battery swapping, it’s still early days.
👉🏻 Animation, Visual Effects, Gaming and Comics
The animation, visual effects, gaming, and comic (AVGC) sector offers immense potential to employ youth. An AVGC promotion task force with all stakeholders will be set-up to recommend ways to realize this and build domestic capacity for serving our markets and the global demand.
India can be a Global Media Production Powerhouse -
we speak English.
the Indian film industry has cultivated hundreds of media businesses.
huge labour cost arbitrage.
Opportunities in AVGC
Production for Foreign Movies. Films like Bladerunner 2049, Shape of Water (Bengaluru), Interstellar (Mumbai DNeg) already had significant portions of their Visual Effects produced in India.
Skill development in AVGC. Business’s like MAAC and Whistling Woods are already doing 100+ crores of revenue. MIT Institute of Design also has a Game Design Course.
Comics focused on the Global South. There’s a reason Bollywood is so popular in Africa, the Middle East and even Central Asia. Indians have faced similar struggles as the people in these areas and therefore our stories resonate with them in a way that Marvel may not.
What other business opportunities do you see in this industry?
👉🏻 Drones
Drones were mentioned 3 times in the 2022 Budget and they’ve become a hot topic on The Indian Dream podcast.
In August 2021, the govt launched the new drone rules which completely changed the legal framework around Drones in India. In December, they released the Standard Operating Procedures (SOP) on aerial spraying using drones - this relates directly to the Kisan Drones that were mentioned in the budget.
Use of ‘Kisan Drones’ will be promoted for crop assessment, digitization of land records, spraying of insecticides, and nutrients.
Drones are also going to require significant training. The new Drone Rules specifically mentioned Drone licenses for different sizes of drones which can can only be awarded by DGCA awarded institutes. As a result, drone licensing and drone pilots will become an important service industry.
Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS). In select ITIs, in all states, the required courses for skilling, will be started.
Aarav Unmanned Systems (AUS) got a 15 crore order from the Haryana government to map the entire state of roughly 32,000 sq. km.. This will help Haryana to create a digital landbank like Jharkhand.
Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernize the country. They provide employment opportunities for youth, and make Indian industry more efficient and competitive.
The number of opportunities for Drones is endless - we’ve done an entire episode about the Drone Market in India. You can also read our previous newsletter about Drones.
👉🏻 Electronics Manufacturing
Electronic manufacturing has been growing rapidly. Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters. Duty concessions are also being given to parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items. This will enable domestic manufacturing of high growth electronic items.
This was the 2nd year in a row that Electronics Manufacturing was mentioned in the Budget Speech by the Finance Minister.
Here’s what the CEO of StuffCool (a Laptop & Mobile Accessories brand) had to say about the Production Linked Incentives for Electronics Manufacturing:
Wearables in particular have been mentioned in the budget for 2 years in a row. BoAt has also been focusing on shifting more of its manufacturing from China to India. One of our first ever episodes was with the electronics brand Pebble where we spoke about the difficulties of sourcing consumer electronics from India.
Electronics manufacturing continues to be an industry with big potential for growth with domestic and export potential.
Other Opportunities from Budget 2022
We discuss all these topics (& more!) in detail on the latest episode of the Indian Dream Podcast.
3 Tweets
A more holistic approach to entrepreneurship and productivity.
Facebook had its worst week ever having shed $200 billion in a single day. 3 Tweets on why Facebook has been suffering. Imagine TikTok’s absolute dominance if it wasn’t banned in India.
After having a better product for years, TikTok passed Instagram in total aggregate time spent globally a week or so ago (per App Annie). The average public market investor just realized the magnitude of this shift on Wednesday. Efficient markets.
Apple’s privacy changes cost Facebook $10 billion in advertising revenue.
A thread by a founder who was bought by and worked with Facebook on why Meta might have serious issues going forward.
We’ve spoken about Vertical SaaS several times on the Podcast. Zenoti is an Indian-built platform that helps Spas with their backend and has raised $331 million in funding. Lots more opportunities such as this.
2 Podcasts
Twitter: Towing the Clown Car Out of the Goldmine
Since we shared so many Tweets about the end of Facebook, it seems like a good time to share a Podcast about the future of Twitter. The level of detail provided by the guest is incredible. Compound248 speaks about the sins of Twitter’s past business model and how they’ve completely reformed themselves to take advantage of the future. Great to listen if you’re an avid Twitter user or if you’re just curious on how this business has been failing shareholders for the past 8 years but is now poised for success.
Budget 2022 Business Opportunities Analysis ft. Sarthak Ahuja
Our longest ever Business Munchies episode at a total length of 77 minutes (after cutting out 15 minutes in editing). We had the Instagram influencer (and CA) Sarthak Ahuja on the Podcast to discuss all the topics above in detail - he’s the one that gave us the research on Balrampur Chini Mills! You can find (most) of our research here if you want to learn more on the topics.
1 Article
Rash decisions, insecurity and burnout: The dark side of India’s startup funding boom
Our position at The Indian Dream has always been that not every business is made for venture scale returns. The current media climate makes it seem like that’s the only way to build your business but we’ve tried to show alternatives from the beginning.
One realisation we’ve had is that startups should raise funds after they’ve found Product-Market fit and that money should be used to find scale. Our favourite example is the episode with Kama Ayurveda founder Vivek Sahni - he ran Kama as a side hustle for 10 years before focusing on it full-time. During those 10 years, he was able to figure out what worked and what didn’t work. Within a year of going full-time, he raised capital from a Private Equity firm and then raised 100cr from luxury brand Puig in 2020. He did not waste investor money on experimenting - instead he spent purely on building new stores and finding scale.
That’s it from us this week! Share this with your friends, family and colleagues who want to stay on top of Market Trends and Business Ideas & Opportunities!
Until next week!
Sahil & Sid
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