- The Indian security industry is expected to double by 2020: FICCI - Grant Thornton Report
The private security industry in India valued at Rs. 40,000 crore in 2014 and is expected to become a Rs. 80,000 crore industry by the year 2020, says the Grant Thornton FICCI report - Private security services in India which was launched today at the FICCI Private Security Industry Conclave 2015. The report further says that the private security industry in India provides employment to more than 70 lakh people and is expected to further generate 50 lakh jobs by 2020.
While manned guarding is the largest segment in the security space in India with approximately 75-80 percent market share, the cash services market, which is the next big segment is expected to cover 25 percent of the market share in the next five years.
“Growing urbanisation, coupled with retail boom and increasing concerns regarding security has led to a rise of organisations catering to the private security segment in the country. Development of infrastructure and industries, residential complexes offers a sea of opportunities to the growing security industry. Government initiatives such as the development of 100 smart cities and ‘Make in India‘ campaign will add to the overall growth of the industry,” said Rahul Kapur, Partner, Grant Thornton India LLP.
Globally, the demand for private contract security services is likely to increase by 7.4 percent annually and reach US$ 244 billion (Rs. 15.86 lakh crore) by 2016. It is expected that security industry segment will rapidly grow in the developing parts of Asia, Eastern Europe, Africa and the Middle East, where security markets are relatively underdeveloped. In fact, several markets including China, India, Mexico, Russia and South Africa are expected to achieve double digit annual growth through the year 2016.
“In the context of current policy and regulatory developments in the country, the private security industry will continue to play an important role. The Hon’ble Prime Minister’s emphasis on ‘Make in India’ will encourage foreign capital into manufacturing and other such industries. This will not only trigger demand for private security personnel, but will compel industries to adopt processes and practices in sync with international standards. Added to this, the government’s emphasis on ‘Digital India’ will introduce new security technology into the industry. This will not only enable entry of technocrats into the sector, but will also provide an opportunity for dispersal of technical knowledge and professional expertise to otherwise not so technical job roles,” said A. Didar Singh, Secretary General, FICCI.
The report highlights some of the challenges that the industry currently faces. The PSAR (Private Security Agencies (Regulations) Act, 2005 enacted for the private security sector (PSS) needs to be implemented uniformly across the Indian states. Also, private security companies do not have the authority to procure licensed firearms and they have to rely on guards, who have the license to carry them for personal use. Another key challenge for the industry is the increased rate of service tax for private security sector which has further increased the cost of services for the security agencies.
The report adds that with increase in the development of tier III cities, the demand from these cities is likely to grow in addition to the existing demand from the tier II and III cities.